EXHIBIT 10.3
EXECUTION COPY
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PRESTON CORPORATION
and
MANUFACTURERS HANOVER TRUST COMPANY,
Trustee
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INDENTURE
Dated as of May 1, 1986
---------
7% Convertible Subordinated Debentures Due 2011
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TIE-SHEET(1)
Reconciliation of provisions of The Trust Indenture Act of 1939 with Indenture
dated as of May 1, 1986 between Preston Corporation and Manufacturers Hanover
Trust Company:
Section of Act Section of Indenture
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310(a)(1) and (2)................................... 8.09
310(a)(3) and (4)................................... Not applicable
310(b).............................................. 8.08 and 8.10(b)
310(c).............................................. Not applicable
311(a) and (b)...................................... 8.13
311(c).............................................. Not applicable
312(a).............................................. 6.01 and 6.02(a)
312(b) and (c)...................................... 6.02(b) and (c)
313(a).............................................. 6.04(a)
313(b)(1)........................................... Not applicable
313(b)(2)........................................... 6.04(b)
313(c).............................................. 6.04(c)
313(d).............................................. 6.04(d)
314(a).............................................. 6.03
314(b).............................................. Not applicable
314(c)(1) and (2)................................... 16.05
314(c)(3)........................................... Not applicable
314(d).............................................. Not applicable
314(e).............................................. 16.05
314(f).............................................. 5.05
315(a), (c) and (d)................................. 8.01 and 8.02
315(b).............................................. 7.08
315(e).............................................. 7.09
316(a)(1)........................................... 7.01 and 7.07
316(a) last sentence................................ 9.04
316(b).............................................. 7.04
317(a).............................................. 7.02
317(b).............................................. 5.04(a)
318(a).............................................. 16.07
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(1) This tie-sheet is not part of the Indenture as executed.
TABLE OF CONTENTS(2)
Page
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PARTIES........................................................................1
RECITALS.......................................................................1
Purpose of Indenture..................................................1
Form of Face of Debenture.............................................1
Form of Trustee's Certificate of Authentication.......................3
Form of Reverse of Debenture..........................................4
Form of Conversion Notice.............................................9
Form of Assignment...................................................10
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions....................................................11
Board of Directors.............................................11
Common Stock...................................................11
Company........................................................11
Conversion Price...............................................11
Debenture or Debentures; Outstanding...........................12
Debentureholder................................................12
Event of Default...............................................12
Indenture......................................................12
Officers' Certificate..........................................12
Opinion of Counsel.............................................13
Person.........................................................13
Predecessor Debenture..........................................13
Principal Office of the Trustee................................13
Responsible Officer............................................13
Senior Indebtedness............................................13
Subsidiary.....................................................14
Trading Days...................................................14
Trust Indenture Act of 1939....................................14
Trustee........................................................14
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(2) This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF DEBENTURES
SECTION 2.01. Designation, Amount and Issue of Debentures....................15
SECTION 2.02. Form of Debentures.............................................15
SECTION 2.03. Date and Denomination of Debentures...........................15
SECTION 2.04. Execution of Debentures........................................17
SECTION 2.05. Exchange and Registration of Transfer of Debentures............18
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debentures................19
SECTION 2.07. Temporary Debentures...........................................20
SECTION 2.08. Cancellation of Debentures Paid, etc...........................20
ARTICLE THREE
REDEMPTION OF DEBENTURES - SINKING FUND
SECTION 3.01. Redemption Prices - Voluntary and for Sinking Fund.............20
SECTION 3.02. Notice of Redemption; Selection of Debentures..................21
SECTION 3.03. Payment of Debentures Called for Redemption....................23
SECTION 3.04. Sinking Fund...................................................23
SECTION 3.05. Conversion Arrangement on Call for Redemption..................25
ARTICLE FOUR
SUBORDINATION OF DEBENTURES
SECTION 4.01. Agreement of Subordination.....................................26
SECTION 4.02. Payments to Debentureholders...................................27
SECTION 4.03. Subrogation of Debentures......................................28
SECTION 4.04. Authorization by Debentureholders..............................29
SECTION 4.05. Notice to Trustee..............................................29
SECTION 4.06. Trustee's Relation to Senior Debt..............................30
SECTION 4.07. No Impairment of Subordination.................................31
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01. Payment of Principal, Premium and Interest.....................31
SECTION 5.02. Offices for Notice and Payments, etc...........................31
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SECTION 5.03. Appointments to Fill Vacancies in Trustee's Office.............32
SECTION 5.04. Provision as to Paying Agent...................................32
SECTION 5.05. Notification of Events of Default..............................33
SECTION 5.06. Statement as to Compliance.....................................33
ARTICLE SIX
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 6.01. Debentureholders' Lists........................................33
SECTION 6.02. Preservation and Disclosure of Lists...........................34
SECTION 6.03. Reports by the Company.........................................35
SECTION 6.04. Reports by the Trustee.........................................36
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON THE EVENT OF DEFAULT
SECTION 7.01. Events of Default..............................................37
SECTION 7.02. Payment of Debentures on Default; Suit Therefor................39
SECTION 7.03. Application of Monies Collected by Trustee.....................41
SECTION 7.04. Proceedings by Debentureholder.................................42
SECTION 7.05. Proceedings by Trustee.........................................42
SECTION 7.06. Remedies Cumulative and Continuing.............................43
SECTION 7.07. Direction of Proceedings and Waiver of Defaults by
Majority Debentureholders....................................43
SECTION 7.08. Notice of Defaults.............................................44
SECTION 7.09. Undertaking to Pay Costs.......................................44
ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01. Duties and Responsibilities of Trustee.........................45
SECTION 8.02. Reliance on Documents, Opinions, etc...........................46
SECTION 8.03. No Responsibility for Recitals, etc............................47
SECTION 8.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures...........................................47
SECTION 8.05. Monies To Be Held in Trust.....................................47
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SECTION 8.06. Compensation and Expenses of Trustee...........................48
SECTION 8.07. Officers' Certificate as Evidence..............................48
SECTION 8.08. Conflicting Interest of Trustee................................48
SECTION 8.09. Eligibility of Trustee.........................................53
SECTION 8.10. Resignation or Removal of Trustee..............................54
SECTION 8.11. Acceptance by Successor Trustee................................55
SECTION 8.12. Succession by Merger, etc......................................56
SECTION 8.13. Limitation on Rights of Trustee as a Creditor..................56
ARTICLE NINE
CONCERNING THE DEBENTUREHOLDERS
SECTION 9.01. Action by Debentureholders.....................................60
SECTION 9.02. Proof of Execution by Debentureholders.........................60
SECTION 9.03. Who Are Deemed Absolute Owners.................................61
SECTION 9.04. Company-Owned Debentures Disregarded...........................61
SECTION 9.05. Revocation of Consents; Future Holders Bound...................61
ARTICLE TEN
DEBENTUREHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings...........................................62
SECTION 10.02. Call of Meetings by Trustee....................................62
SECTION 10.03. Call of Meetings by Company or Debentureholders................63
SECTION 10.04. Qualifications for Voting......................................63
SECTION 10.05. Regulations....................................................63
SECTION 10.06. Voting.........................................................64
SECTION 10.07. No Delay of Rights by Meeting..................................64
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01. Supplemental Indentures without Consent of
Debentureholders.............................................65
SECTION 11.02. Supplemental Indentures with Consent of
Debentureholders.............................................66
SECTION 11.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures......................................67
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SECTION 11.04. Notation on Debentures.........................................67
SECTION 11.05. Evidence of Compliance of Supplemental Indenture To
Be Furnished Trustee.........................................67
ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. Company May Consolidate, etc., on Certain Terms................67
SECTION 12.02. Successor Corporation to Be Substituted........................68
SECTION 12.03. Opinion of Counsel To Be Given Trustee.........................69
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture.........................................69
SECTION 13.02. Deposited Monies To Be Held in Trust by Trustee................70
SECTION 13.03. Paying Agent To Repay Monies Held..............................70
SECTION 13.04. Return of Unclaimed Monies.....................................70
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Debentures Solely Corporate Obligations..........71
ARTICLE FIFTEEN
CONVERSION OF DEBENTURES
SECTION 15.01. Right to Convert...............................................71
SECTION 15.02. Exercise of Conversion Privilege: Issuance of Common
Stock on Conversion; No Adjustment for Interest or
Dividends....................................................71
SECTION 15.03. Cash Payments in Lieu of Fractional Shares.....................73
SECTION 15.04. Conversion Price...............................................73
SECTION 15.05. Adjustment of Conversion Price.................................73
SECTION 15.06. Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale.............................................76
SECTION 15.07. Taxes on Shares Issued.........................................77
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SECTION 15.08. Reservation of Shares; Shares To Be Fully Paid;
Compliance with Governmental Requirements; Listing
of Common Stock..............................................77
SECTION 15.09. Responsibility of Trustee......................................78
SECTION 15.10. Notice to Holders Prior to Certain Actions.....................78
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 16.01. Provisions Binding on Company's Successors.....................79
SECTION 16.02. Official Acts by Successor Corporation.........................79
SECTION 16.03. Addresses for Notices, etc.....................................79
SECTION 16.04. Governing Law..................................................80
SECTION 16.05. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee......................................80
SECTION 16.06. Legal Holidays.................................................81
SECTION 16.07. Trust Indenture Act to Control.................................81
SECTION 16.08. No Security Interest Created...................................81
SECTION 16.09. Benefits of Indenture..........................................81
SECTION 16.10. Table of Contents, Headings, etc...............................81
SECTION 16.11. Execution in Counterparts......................................82
SECTION 16.12. Separability Clause............................................82
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THIS INDENTURE dated as of May 1, 1986 between PRESTON
CORPORATION, a Maryland corporation (hereinafter sometimes called the
"Company"), and MANUFACTURERS HANOVER TRUST COMPANY, a corporation duly
incorporated and existing under the laws of the State of New York (hereinafter
sometimes called the "Trustee"),
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue of its 7% Convertible Subordinated Debentures Due 2011
(hereinafter the "Debentures"), in an aggregate principal amount not to exceed
$25,000,000 (except that such aggregate principal amount may be up to
$28,750,000, as specified in Section 2.01 herein) and to provide the terms and
conditions upon which the Debentures are to be authenticated, issued and
delivered, the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, the Debentures, the certificate of authentication to
be borne by the Debentures and a form of conversion notice are to be
substantially in the following forms, respectively:
[FORM OF FACE OF DEBENTURE]
No. $
PRESTON CORPORATION
7% Convertible Subordinated Debenture Due 2011
PRESTON CORPORATION, a corporation duly organized and existing
under the laws of the State of Maryland (herein called the "Company"), for value
received, hereby promises to pay to ______________, or registered assigns, the
principal sum of ___________ Dollars on May 1, 2011 at the office or agency of
the Company maintained for that purpose in Baltimore, Maryland or New York, New
York, in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts, and
to pay interest, semi-annually on May 1 and November 1 of each year, commencing
November 1, 1986, on said principal sum at said office or agency, in like coin
or currency, at the rate per annum specified in the title of this Debenture,
from the May 1 or the November 1, as the case may be, next preceding the date of
this Debenture to which interest has been paid or duly provided for, unless the
date hereof is a date to which interest has been paid or duly provided for, in
which case from the date of this Debenture, or unless no interest has been paid
or duly provided for on the Debentures, in which case from May 5, 1986, until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after any April 15 or
October 15, as the case may be, and before the
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following May 1 or November 1, this Debenture shall bear interest from May 1 or
November 1; provided, however, that if the Company shall default in the payment
of interest due on such May 1 or November 1, then this Debenture shall bear
interest from the next preceding May 1 or November 1 to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided for
on the Debentures, from May 5, 1986. The interest so payable on any May 1 or
November 1 will be paid to the person in whose name this Debenture (or one or
more Predecessor Debentures as defined in the Indenture) is registered at the
close of business on the record date, which shall be the April 15 or October 15
(whether or not a business day) next preceding such May 1 or November 1 provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. Interest may, at the option of the Company, be
paid by check mailed to the registered address of such person.
Reference is made to the further provisions of this Debenture
set forth on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, and interest on
the Debentures to the prior payment in full of all Senior Indebtedness as
defined in the Indenture and provisions giving the holder of this Debenture the
right to convert this Debenture into Common Stock of the Company on the terms
and subject to the limitations referred to on the reverse hereof and as more
fully specified in the Indenture. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debenture shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be construed in
accordance with and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee under the Indenture.
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IN WITNESS WHEREOF, PRESTON CORPORATION has caused this
instrument to be duly executed.
PRESTON CORPORATION
Dated:
By
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Title:
Attest:
----------------------
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the
within-mentioned Indenture.
MANUFACTURERS HANOVER TRUST
COMPANY, As Trustee
By
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Authorized Officer
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[FORM OF REVERSE OF DEBENTURE]
PRESTON CORPORATION
7% Convertible Subordinated Debenture Due 2011
This Debenture is one of a duly authorized issue of Debentures
of the Company, designated as its 7% Convertible Subordinated Debentures Due
2011 (herein called the "Debentures"), limited to the aggregate principal amount
of $25,000,000 (except that, under certain circumstances such aggregate
principal amount may be up to $28,750,000, as specified in Section 2.01 of the
Indenture are hereinafter referred to), all issued or to be issued under and
pursuant to an Indenture dated as of May 1, 1986 (herein called the
"Indenture"), between the Company and Manufacturers Hanover Trust Company,
Trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of and all unpaid and
accrued interest on all Debentures may be declared, and upon such declaration
shall become due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time outstanding, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or any premium thereon, or make the principal thereof
or any premium or interest thereon payable in any coin or currency other than
that hereinbefore provided or impair the rights of any Debentureholder to
institute suit for the payment or conversion thereof or impair the right to
convert the Debenture into Common Stock subject to the terms set forth in the
Indenture, including Section 15.06, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Debentures then outstanding. It is
also provided in the Indenture that, prior to any declaration accelerating the
maturity of the Debenture, the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding may on behalf of the holders of
all of the Debentures waive any past default or Event of Default under the
Indenture and its consequences except a default in the payment
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of interest or any premium on or the principal of any of the Debentures into
Common Stock of the Company. Any such consent or waiver by the holder of this
Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Debenture and any Debentures which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent
and in the manner provided in the Indenture, expressly subordinate and subject
in right of payment to the prior payment in full of all Senior Indebtedness of
the Company as defined in the Indenture, whether outstanding at the date of the
Indenture or thereafter incurred, and this Debenture is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Debenture, by accepting the same, agrees, expressly for the benefit of the
present and future holders of Senior Indebtedness, to and shall be bound by such
provisions and authorizes the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney in fact for such purpose.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Debenture at the place, at the respective times, at
the rate and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a
year of twelve 30-day months.
The Debentures are issuable in registered form without coupons
in denominations of $1,000 and any integral multiple of $1,000, at the office or
agency of the Company in Baltimore, Maryland or New York, New York, and in the
manner and subject to the limitations provided in the Indenture, but without
payment of any service charge, Debentures may be exchanged for a like aggregate
principal amount of Debentures of other authorized denominations.
The Debentures may be redeemed at the option of the Company as
a whole, or from time to time in part, upon mailing a notice of such redemption
not fewer than thirty nor more than sixty days prior to the date fixed for
redemption to the holders of Debentures at their last registered addresses, all
as provided in the Indenture, at the following optional redemption prices
(expressed as percentages of the principal amount), together in each case with
accrued interest to the date fixed for redemption:
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If redeemed during the twelve-month period beginning April 1,
YEAR PERCENTAGE YEAR PERCENTAGE
---- ---------- ---- ----------
1986 107.00% 1991 103.50%
1987 106.30 1992 102.80
1988 105.60 1993 102.10
1989 104.90 1994 101.40
1990 104.20 1995 100.70
and 100% if redeemed on or after May 1, 1996; provided, however, that if the
date fixed for redemption is a May 1 or November 1, then the interest payable on
such date shall be paid to the holder of record on the next preceding April 15
or October 15; and provided, further, that no such redemption shall be effected
prior to May 1, 1989 unless the last reported sales price (determined as
provided in the Indenture) of the Company's Common Stock, as defined in the
Indenture, equals or exceeds 150% of the then effective conversion price
(determined as provided in the Indenture) for at least twenty days within a
period of thirty consecutive days (which are, in each case, Trading Days, as
defined in the Indenture) ending within five days of the date on which the
redemption notice is first mailed to the holders of the Debenture.
The Debentures are also subject to redemption in part, through
the operation of the sinking fund provided for in the Indenture, on May 1, 1997
and on each May 1 thereafter to and including May 1, 2010, on notice as set
forth above, at 100% of the principal amount thereof, together with accrued
interest to the date fixed for redemption.
Subject to the provisions of the Indenture, the holder hereof
has the right, at his option, at any time prior to the close of business on May
1, 2011, or, as to all or any portion hereof called for redemption, the date
fixed for redemption (unless the Company shall default in payment due upon
redemption thereof), to convert the principal hereof or any portion of such
principal which is $1,000 or an integral multiple thereof, into that number of
fully paid and nonassessable shares of the Company's Common Stock, as said
shares shall be constituted at the date of conversion, obtained by dividing the
principal amount of this Debenture or portion thereof to be converted by the
conversion price of $26.00, or such conversion price as adjusted from time to
time as provided in the Indenture, upon surrender of this Debenture, together
with a conversion notice as provided in the Indenture, to the Company at the
office or agency of the Company maintained for that purpose in Baltimore,
Maryland or New York, New York, and, unless the shares issuable on conversion
are to be issued in the same name as the registered holder of this Debenture,
duly executed by, the holder or by his duly authorized attorney. No adjustments
in respect of interest or dividends will be made upon any conversion; provided,
however, that if this Debenture shall be surrendered for conversion during the
period from the close of business on any record date for the payment of interest
to the opening of business on the following interest payment date, this
Debenture (unless it or the portion being converted shall have been called for
redemption on a date in such period) must be accompanied by an amount, in funds
acceptable to the Company, equal to the interest payable on
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such interest payment date on the principal amount being converted. No
fractional shares will be issued upon any conversion, but an adjustment in cash
will be made, as provided in the Indenture, in respect of any fraction of a
share which would otherwise be issuable upon the surrender of any Debenture or
Debentures for conversion.
Any Debentures called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed for redemption,
may be deemed to be purchased from the holder of such Debentures at an amount
not less than the applicable redemption price, together with accrued interest to
the date fixed for redemption, by one or more investment bankers or other
purchasers who may agree with the Company to purchase such Debentures from the
holders thereof and convert them into Common Stock of the Company and to make
payment for such Debenture as aforesaid to the Trustee in trust for such
holders.
Upon due presentment for registration of transfer of this
Debenture at the office or agency of the Company in Baltimore, Maryland or New
York, New York, a new Debenture or Debentures of authorized denominations for an
equal aggregate principal amount will be issued to the transferee in exchange
herefor, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Company shall not be required to exchange or register a transfer of (a) any
Debentures for a period of 15 days next preceding any selection of Debentures to
be redeemed, (b) any Debentures or portions thereof selected or called for
redemption or (c) any Debentures or portions thereof surrendered for conversion.
The Company, the Trustee, any paying agent, any conversion
agent and any Debenture registration may deem and treat the registered holder
hereof as the absolute owner of this Debenture (whether or not this Debenture
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Company or any Debenture registrar), for
the purpose of receiving payment hereof, or on account hereof, for the
conversion hereof and for all other purposes, and neither the Company nor the
Trustee nor any paying agent nor any conversion agent nor any Debenture
registrar shall be affected by any notice to the registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Debenture.
No recourse for the payment of the principal of or any premium
or interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligations, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness, represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present, or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any
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constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issued hereof, expressly waived and released.
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[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To Preston Corporation
The undersigned registered owner of this Debenture hereby
irrevocably exercised the option to convert this Debenture, or portion hereof
(which is $1,000 or an integral multiple thereof) below designated, into shares
of Common Stock of Preston Corporation in accordance with the terms of the
Indenture referred to in this Debenture, and directs that the shares issuable
and deliverable upon the conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto. Any amount required to be paid by the
undersigned on account of interest accompanies this Debenture.
Dated:
------------------------
Signature(s)
Fill in for registration of
shares:
----------------------------
----------------------------
----------------------------
Please print name and address
(including zip code number)
Principal amount to be
converted (if less than all):
$______,000.00
1
------------------------
Social Security or Other
Taxpayer Identification Number
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[FORM OF ASSIGNMENT]
For value received ______________ hereby sell(s), assign(s) and transfer(s) unto
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(Please insert social security or other identifying number of assignee.)
the within Debenture and hereby irrevocably constituting and appointing
_______________ attorney to transfer the said Debenture on the books of the
Company, with full power of substitution in the premises.
Dated
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Signature(s)
Signature(s) must be guaranteed by
a commercial bank or trust company
or a member firm of a major stock
exchange.
----------------------------------
Signature Guarantee
AND WHEREAS, all acts and things necessary to make the
Debentures, when executed by the Company and authenticated and delivered by the
Trustee, as in this Indenture provided, the valid, binding and legal obligations
of the Company, and to constitute these presents a valid agreement according to
its terms, have been done and performed, and the execution of this Indenture and
the issue hereunder of the Debentures have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar duly paid to it by the
Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective holders from time to time of the
Debentures, as follows:
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ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions. The terms defined in this Section
1.01 (except as herein otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this Section
1.01. All other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939 or which are by reference therein defined in the
Securities Act of 1933 (except as herein otherwise expressly provided or unless
the context otherwise requires) shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of the execution of this Indenture. The words "herein", "hereof" and "hereunder"
and words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms defined in this
Article include the plural as well as the singular.
Board of Directors: The term "Board of Directors" shall mean
the Board of Directors of the Company or a duly authorized committee of such
Board.
Common Stock: The term "Common Stock" shall mean any shares of
any class of the Company which have no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. Subject to the provisions of Section 15.06, however, shares
issuable on conversation of Debentures shall include only shares of the class
designated as Common Stock, $1.00 par value, of the Company at the date of this
Indenture or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the company and which are not subject
to redemption by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting form all such reclassifications.
Company: The term "Company" shall mean Preston Corporation, a
Maryland corporation, and subject to the provisions of Article Twelve, shall
include its successors and assigns.
Conversion Price: The term "conversion price" shall have the
meaning specified in Section 15.04.
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Debenture or Debentures; Outstanding: The terms "Debenture" or
"Debentures" shall mean any Debenture or Debentures, as the case may be,
authenticated and delivered under this Indenture.
The term "outstanding" (except as otherwise provided in
Section 8.08), when used with reference to Debentures, shall, subject to the
provisions of Section 9.04, mean, as of any particular time, all Debentures
authenticated and delivered by the Trustee under this Indenture, except
(a) Debentures theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, for the payment or
redemption of which monies in the necessary amount shall have been deposited in
trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company
shall act as its own paying agent), provided that if such Debentures are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as in Article Three provided, or provision satisfactory to the
Trustee shall have been made for giving such notice;
(c) Debentures in lieu of or in substitution for which other
Debentures shall have been authenticated and delivered pursuant to the terms of
Section 2.06 unless proof satisfactory to the Trustee is presented that any such
Debentures are held by bona fide holders in due course; and
(d) Debentures converted into Common Stock pursuant to Article
Fifteen hereof and Debentures not deemed outstanding pursuant to Section 3.02.
Debentureholder: The terms "Debentureholder" or "holder of
Debentures", or other similar terms, shall mean any person in whose name at the
time a particular Debenture is registered on the books of the Company kept for
that purpose in accordance with the terms hereof.
Event of Default: The term "Event of Default" shall mean any
event specified in Section 7.01, continued for the period of time, if any, and
after the giving of the notice, if any, therein designated.
Indenture: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
Officers' Certificate: The term "Officers' Certificate", when
used with respect to the Company, shall mean a certificate signed by the
Chairman, the President, any Senior
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Vice President or any Vice President and by the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company. Each such
certificate shall include the statements provided for in Section 16.05 if and to
the extent required by the provisions of such Section.
Opinion of Counsel: The term "Opinion of Counsel" shall mean
an opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company, and who shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in Section 16.05 if and to the
extent required by the provisions of such Section.
Person: The term "Person" shall mean a corporation, an
association, a partnership, an organization, an individual, a government or a
political subdivision thereof or a governmental agency.
Predecessor Debenture: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this Section 2.06 in lieu of a lost destroyed or stolen
Debenture shall be deemed to evidence the same debt as the lost, destroyed or
stolen Debenture.
Principal Office of the Trustee: The term "principal office of
the Trustee", or other similar term, shall mean the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office is, at the date as of which this Indenture is dated,
located at Manufacturers Hanover Trust Company, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000.
Responsible Officer: The term "Responsible Officer", when used
with respect to the Trustee, shall mean the chairman or vice chairman of the
board of directors, the chairman or vice chairman of the executive committee of
the board of directors, the president, any executive vice president, any senior
vice president, any vice president, any assistant vice president, any trust
officer, any assistant trust officer, or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of this knowledge of and familiarity
with the particular subject.
Senior Indebtedness: The term "Senior Indebtedness" shall mean
the following, whether outstanding at the date hereof or hereafter created,
incurred, assumed or guaranteed:
(a) Principal of and premium, if any, and interest on
indebtedness of the Company for money borrowed (including any
indebtedness secured by a mortgage, conditional sales contract or other
lien which is (i) given to secure all or part of the
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purchase price of property subject thereto, whether given to the vendor
of such property or to another or (ii) existing on property at the time
of acquisition thereof);
(b) Principal of and premium, if any, and interest on
indebtedness of the Company evidenced by notes, debentures, bonds or
other securities sold by the Company for money (other than the
Debentures);
(c) Lease obligations of the Company which are capitalized on
the books of the Company in accordance with generally accepted
accounting principles;
(d) Principal of and premium, if any, and interest on
indebtedness of others of the kinds described in either of the
preceding clauses (a) or (b) and all lease obligations of others of the
kind described in the preceding clause (c) assumed by or guaranteed in
any manner by the Company or in effect guaranteed by the Company
through an agreement to purchase, contingent or otherwise; and
(e) Principal of and premium, if any, and interest on
renewals, extensions or refundings of indebtedness of the kinds
described in any of the preceding clauses (a), (b) and (d) and all
renewals or extensions of leases of the kinds described in either of
the preceding clauses (c) and (d);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is not superior in right of payment to
the Debentures.
Subsidiary: The term "Subsidiary" shall mean any corporation
of which at least a majority of the outstanding stock having voting power under
ordinary circumstances to elect a majority of the board of directors of said
corporation shall at the time be owned by the company or by the Company and one
or more Subsidiaries or by one or more Subsidiaries.
Trading Days: The term "Trading Days" shall have the meaning
specified in Section 15.05(d).
Trust Indenture Act of 1939: The term "Trust Indenture Act of
1939" shall mean the Trust Indenture Act of 1939 as it was in force at the date
of execution of this Indenture, except as provided in Sections 11.03 and 15.06.
Trustee: The term "Trustee" shall mean Manufacturers Hanover
Trust Company and, subject to the provisions of Article Eight hereof, shall also
include its successors and assigns as Trustee hereunder.
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ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF DEBENTURES
SECTION 2.01. Designation, Amount and Issue of Debentures. (a)
the Debentures shall be designated as "7% Convertible Subordinated Debentures
Due 2011". Debentures not to exceed the aggregate principal amount of
$25,000,000 (except as provided in subsection (b) and in Section 2.06) upon the
execution of this Indenture, or from time to time thereafter, may be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Debentures to or upon the written
order of the Company, signed by its Chairman or its President, any Senior Vice
President or any Vice President and by its Treasurer or Assistant Treasurer or
its Secretary or any Assistant Secretary, without any further action by the
Company hereunder.
(b) Upon receipt by the Trustee of an Officers' Certificate
stating that the Underwriters (as defined in the Underwriting Agreement referred
to below) have elected to purchase from the Company a specified aggregate
principal amount of additional Debentures, not to exceed $3,750,000 pursuant to
Article I of the Underwriting Agreement dated April 25, 1986 with the Company,
the Trustee shall authenticate and deliver such specified aggregate principal
amount of additional Debentures to or upon the written order of the Company
signed by any of its officers referred to in subsection (a) above. Such
Officers' Certificate must be received by the Trustee not later than June 2,
1986 and in any event at least two full business days prior to the proposed date
for delivery of such additional Debentures.
SECTION 2.02. Form of Debentures. The Debentures and the
Trustee's certificate of authentication to be borne by the Debentures shall be
substantially in the form as in this Indenture above recited. Any of the
Debentures may have imprinted thereon such legends or endorsements as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule of regulation of any stock
exchange on which the Debentures may be listed, or to conform to usage.
SECTION 2.03. Date and Denomination of Debentures. The
Debentures shall be issuable in registered form without coupons in denominations
of $1,000 and any integral multiple of $1,000. Every Debenture shall be dated
the date of its authentication and, except as provided in this Section, shall
bear interest, payable semiannually on May 1 and November 1, of each year,
commencing November 1, 1986, from the May 1 and November 1, as the case may be,
next preceding the date of such Debenture to which interest has been paid or
duly provided for, unless the date of such Debenture is the date to which
interest has been paid
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or duly provided for, in which case from the date of such Debenture, or unless
no interest has been paid or duly provided for on the Debentures, in which case
from May 5, 1986, until payment of the principal sum has been made or duly
provided for. Notwithstanding the foregoing, when there is no existing default
in the payment of interest on the Debentures, all Debentures authenticated by
the Trustee after the close of business on the record date (as hereinafter
defined) for any interest payment date (May 1 and November 1, as the case may
be) and prior to such interest payment date shall be dated the date of
authentication but shall bear interest from such interest payment date;
provided, however, that if and to the extent that the Company shall default in
interest due on such interest payment date then any such Debenture shall bear
interest from the May 1 and November 1, as the case may be, next preceding the
date of such Debenture to which interest has been paid or duly provided for,
unless no interest has been paid or duly provided for on the Debentures, in
which case from May 5, 1986.
The person in whose name any debenture (or its Predecessor
Debenture) is registered at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date (subject to the provisions of Article
Three in the case of any Debenture or Debentures, or portion thereof, called for
redemption on a date subsequent to the record date and prior to such interest
payment date) notwithstanding the cancellation of such Debenture upon any
conversion, transfer or exchange subsequent to the record date and prior to such
interest payment date. Interest may, at the option of the company, be paid by
check mailed to the address of such person on the registry kept for such
purposes. The term "record date" with respect to any interest payment date shall
mean the April 15 or October 15 preceding said May 1 or November 1.
Interest on the Debentures shall be computed on the basis of a
year of twelve 30-day months.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any said May 1 or November 1 (herein
called "Defaulted Interest') shall forthwith cease to be payable to the
Debentureholder on the relevant record date by virtue of his having been such
Debentureholder; and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture and the date of the proposed
payment, and at the same time
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the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. The Company
shall designate a Special Record Date acceptable to the Trustee for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid to each Debentureholder at his address as it appears in
the Debenture register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered
at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Debentures may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee and the Trustee shall have so notified the Company.
SECTION 2.04. Execution of Debentures. The Debentures shall be
signed in the name and on behalf of the Company by the manual or facsimile
signature of its Chairman, its President or any of its Senior Vice President or
Vice Presidents and attested by the manual or facsimile signature of its
Secretary or any of its Assistant Secretaries (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, manually executed by the Trustee, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Debentures shall cease to be such officer before the Debentures so signed
shall have been
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authenticated and delivered by the Trustee, or disposed of by the Company, such
Debentures nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Debentures had not ceased to be such officer
of the Company; and any Debenture may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Debenture, shall be the
proper officers of the Company, although at the date of the execution of this
indenture any such person was not such an officer.
SECTION 2.05. Exchange and Registration of Transfer of
Debentures. Debentures may be exchanged for a like aggregate principal amount of
Debentures of other authorized denominations. Debentures to be exchanged shall
be surrendered at the office or agency to be maintained by the Company as set
forth in Section 5.02, and the company shall execute and register and the
Trustee shall authenticate and deliver in exchange therefor the Debenture or
Debentures which the Debentureholder making the exchange shall be entitled to
receive, bearing registration numbers not contemporaneously outstanding.
The Company shall cause to be kept at said office of the
Company or agency maintained as set forth in Section 5.02, a register in which,
subject to such reasonable regulations as it may prescribe. Debentures shall be
registered and the transfer of Debentures shall be registered as in this Article
Two provided. Such register shall be in written form or in any other form
capable of being converted into written form within a reasonable time. At all
reasonable times such register shall be open for inspection by the Trustee. Upon
due presentment for registration of transfer of any Debenture at any such office
or agency maintained by the Company, the Company shall execute and register and
the Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Debenture or Debentures for an equal aggregate principal
amount.
All Debentures presented for registration of transfer or for
exchange, redemption, conversion or payment shall (if so required by the Company
or the Trustee) be duly endorsed by, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder of his attorney duly authorized in writing.
No service charge shall be made for any exchange or
registration of transfer of Debentures, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith.
The Company shall not be required to exchange or register a
transfer of (a) any Debentures for a period of 15 days next preceding any
selection of Debentures to be redeemed, (b) any Debentures or portions thereof
selected or called for redemption or (c) any Debentures or portions thereof
surrendered for conversion.
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All Debentures issued upon any transfer or exchange of
Debentures shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture as the Debentures
surrendered upon such exchange or transfer.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debentures.
In case any temporary or definitive Debenture shall become mutilated or be
destroyed, lost or stolen, the Company in its discretion may execute, and upon
its request the Trustee shall authenticate and deliver, a new Debenture of like
tenor and principal amount, bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of such Debenture and of the
ownership thereof.
The Trustee may authenticate any such substituted Debenture
and deliver the same upon the receipt of such security or indemnity as the
Trustee may require. Upon the issuance of any substituted Debenture, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses connected therewith and in addition a further sum not
exceeding $2 for each Debenture so issued in substitution. In case any Debenture
which has matured or is about to mature or has been called for redemption or is
about to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debenture, pay
or authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment or conversion shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in case of destruction, loss or theft, evidence satisfactory
to the Company and the Trustee of the destruction, loss or theft of such
Debenture and of the ownership thereof.
Every substituted Debenture issued pursuant to the provisions
of this Section 2.06 by virtue of the fact that any Debenture is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owed upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding
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any law or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment or conversion of negotiable instruments or other
securities without their surrender.
SECTION 2.07. Temporary Debentures. Pending the preparation of
definitive Debentures, the company may execute and the Trustee shall
authenticate and deliver temporary Debentures (printed or lithographed).
Temporary Debentures shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debentures but with such omissions,
insertions and variations as may be appropriate for temporary Debentures, all as
may be determined by the Company. Every such temporary Debenture, shall be
executed by the Company and authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Debentures. Without unreasonable delay the Company will execute
and deliver to the Trustee definitive Debentures and thereupon any or all
temporary Debentures maybe surrendered in exchange therefor, at the office or
agency of the company to be maintained pursuant to Section 5.02 and the Trustee
shall authenticate and deliver in exchange for such temporary Debentures an
equal aggregate principal amount of definitive Debentures. Such exchange shall
be made by the company at its own expense and without any charge therefor. Until
so exchanged, the temporary Debentures shall in all respect be entitled to the
same benefits under this Indenture as definitive Debentures authenticated and
delivered hereunder.
SECTION 2.08. Cancellation of Debentures Paid, etc. All
Debentures surrendered for the purpose of payment, redemption, conversion,
exchange or registration of transfer, or in discharge or for credit against any
sinking fund payment pursuant to Section 3.04, shall, if surrendered to the
Company or any paying agent or any Debenture registrar or any conversion agent,
be surrendered to the Trustee and promptly cancelled by it, or, if surrendered
to the Trustee, shall be promptly cancelled by it, and no Debentures shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Indenture. The Trustee shall destroy all cancelled securities and delivery
a certificate of such destruction to the Company unless the company directs the
Trustee to deliver cancelled securities to the company. If the company shall
acquire any of the Debentures, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debentures
unless and until the same are delivered to the Trustee for cancellation.
ARTICLE THREE
REDEMPTION OF DEBENTURES - SINKING FUND
SECTION 3.01. Redemption Prices - Voluntary and for Sinking
Fund. (a) The Company may, at its option, redeem all or from time to time any
part of the Debentures
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on any date, upon notice as set forth in Section 3.02, and at the optional
redemption prices set forth in the form of Debenture hereinabove recited,
together with accrued interest to the date fixed for redemption, provided,
however, that no such redemption shall be effected prior to May 1, 1989, unless
the last reported sales price (determined as provided in Section 15.05(d)) of
the Company's Common Stock equals or exceeds 150% of the then effective
conversion price for any twenty days of the last thirty consecutive trading days
(which are, in each case, Trading Days, as defined in Section 15.05(d)) ending
within five days of the date on which the notice or redemption is first mailed
pursuant to Section 3.02. In the case of any redemption pursuant to this Section
3.01 prior to May 1, 1989, the Company will deliver to the Trustee at least 2
days prior to the date on which notice of such redemption is mailed an Officers'
Certificate stating that such redemption will comply with the provisions
contained in the foregoing sentence.
(b) The Debentures shall also be redeemed in part on May 1,
1997 and on each May 1 thereafter to and including May 1, 2010, through the
operation of the sinking fund as set forth in Section 3.04, at the sinking fund
redemption price set forth in the form of Debenture hereinabove recited,
together with accrued interest to the date fixed for redemption.
SECTION 3.02. Notice of Redemption; Selection of Debentures.
In case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debentures pursuant to Section 3.01(a), it shall
fix a date for redemption and, in the case of any redemption pursuant to Section
3.01(a) or (b), it or, at its request, the Trustee in the name of and at the
expense of the Company, shall mail or cause to be mailed a notice of such
redemption at least 30 and not more than 60 days prior to the date fixed for
redemption to the holders of Debentures so to be redeemed as a whole or in part
at their last addresses as the same appear on the registry books of the Company.
Such mailing shall be by first class mail. The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the holder received such notice. In any case, failure to give such notice
by mail or any defect in the notice to the holder of any Debenture designated
for redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the principal
amount of each Debenture to be redeemed, the date fixed for redemption, the
redemption price at which Debentures are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Debentures, that such redemption is pursuant to the sinking fund if to be made
pursuant to Section 3.01(b) or at 3.01(a), that interest accrued to the date
fixed for redemption will be paid as specified in said notice, and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. Such notice shall also state the current conversion price and
the date on which the right to convert such Debenture or portions thereof into
Common Stock will expire. If fewer than all the
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Debentures are to be redeemed, the notice of redemption shall identify the
Debentures to be redeemed. In case any Debenture is to be redeemed in part only,
the notice of redemption shall state the portion of the principal amount thereof
to be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Debenture, a new Debenture or Debentures in principal
amount equal to the unredeemed portion thereof will be issued.
Prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
5.04) an amount of money sufficient to redeem on the redemption date all the
Debentures so called for redemption (other than those theretofore surrendered
for conversion into Common Stock) at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If any Debenture called
for redemption is converted pursuant hereto, any money deposited with the
Trustee or any paying agent or so segregated and held in trust for the
redemption of such Debenture shall be paid to the Company upon its request, or,
if then held by the Company shall be discharged from such trust. If fewer than
all the Debentures are to be redeemed pursuant to Section 3.10(a), the Company
will give the Trustee written notice not fewer than 65 days prior to the
redemption date as to the aggregate principal amount of Debentures to be
redeemed.
If fewer than all the Debentures are to be redeemed, the
Trustee shall select in such manner as it shall deem fair and reasonable the
Debentures or portion thereof (in integral multiples of $1,000) to be redeemed.
If any Debenture selected for partial redemption is converted in part after such
selection, the converted portion of such Debenture shall be deemed (so far as
may be) to be the portion so selected for redemption. The Debentures (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Debenture is converted as a
whole or in part before the mailing of the notice of redemption.
The Trustee shall promptly notify the Company in writing of
the Debentures selected for redemption and, in the case of any Debenture
selected for partial redemption, the principal amount thereof being redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Debentures
shall relate, in the case of any Debentures redeemed or to be redeemed only in
part, to the portion of the principal of such Debenture which has been or is to
be redeemed.
Upon any selection for redemption of less than all Debentures,
the Company and the Trustee may treat as outstanding any Debentures surrendered
for conversion during the period of 15 days prior to such selection and need not
treat as outstanding any Debenture
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authenticated and delivered during such period in exchange for the unconverted
portion of any Debenture converted in part during such period.
SECTION 3.03. Payment of Debentures Called for Redemption. If
notice of redemption has been given as above provided, the Debentures or
portions or Debentures with respect to which such notice has been given shall,
unless theretofore converted into Common Stock pursuant to the terms or places
stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption, and on and after said date (unless the
Company shall default in the payment of such Debentures at the redemption price,
together with interest accrued to said date) interest on the Debentures or
portions of Debentures so called for redemption shall cease to accrue and,
except as provided in Sections 8.05 and 13.04, such Debentures shall cease from
and after the date fixed for redemption to be convertible into Common Stock and
to be entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Debentures except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Debentures at a place of
payment in said notice specified, the said Debentures or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
provided that any semi-annual payment of interest becoming due on the date fixed
for redemption shall be payable to the holders of such Debentures registered as
such on the relevant record date subject to the terms and provisions of Section
2.03 hereof.
Upon presentation of any Debentures redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem
any Debentures or mail any notice of optional redemption during the continuance
of a default in payment of interest or premium on the Debentures or of any Event
of Default of which the Trustee has received written notice. If any Debenture
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Debenture and such Debenture shall remain convertible into Common Stock
until the principal and premium, if any, shall have been paid or duly provided
for.
SECTION 3.04. Sinking Fund. As and for a sinking fund (the
"sinking fund") for the retirement of Debentures and so long as any of the
Debentures remain outstanding and unpaid, the Company will, except as
hereinafter provided, pay to the Trustee in cash not less than one business day
before May 1, 1997 and before May 1 in each year
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thereafter to and including May 1, 2010, an amount sufficient to redeem on such
May 1 5% of the aggregate principal amount of Debentures issued as provided in
Section 2.01, at the sinking fund redemption price, together with accrued
interest to the date fixed for redemption (the "sinking fund payment"). The last
date on which such payment may be made in each year is herein referred to as the
"sinking fund payment date".
At its option the Company may reduce or satisfy its obligation
to make any sinking fund payment by an amount not exceeding the sum of the
following:
(i) the principal amount of Debentures theretofore issued
and acquired by the Company and delivered to the Trustee for
cancellation and not theretofore made the basis for the reduction of a
sinking fund payment; and
(ii) the principal amount of Debentures redeemed and paid
pursuant to the provisions of this Article Three otherwise than through
the operation of the sinking fund, or which shall have been duly called
for redemption otherwise than through the operation of the sinking fund
and the redemption price of which shall have been deposited in trust
for that purpose, and which have not theretofore been made the basis
for the redemption of a sinking fund payment; and
(iii) the principal amount of Debentures surrendered for
conversion pursuant to Article Fifteen (other than the principal amount
of any such Debentures so surrendered which had been called for
redemption by application of a sinking fund payment) and which have not
theretofore been made the basis for the reduction of a sinking fund
payment.
On or before March 1, in each year, beginning March 1, 1997,
the Company shall deliver to the Trustee an Officers' Certificate stating
whether it elects to reduce the amount to be paid to the Trustee in cash before
the following May 1, and if it elects to make such a reduction, setting forth
the amount of the reduction and the basis or bases provided above for such
reduction, together with any Debentures which are to be made the basis of such
reduction and which have not already been delivered to the Trustee and stating
that none of the Debentures so made the basis of such reduction have theretofore
been made the basis of any credit against any sinking fund payment.
The amount of any sinking fund payment payable to the Trustee
before any sinking fund redemption date shall automatically be reduced by the
sinking fund redemption price of all Debentures or portions thereof which shall
have been called for redemption on such sinking fund redemption date through the
sinking fund and shall have been surrendered on or before such date for
conversion pursuant to Article Fifteen; and, as soon as practicable following an
accounting thereof, the Trustee shall refund to the Company any amount of
overpayment made by the Company for the account of such sinking fund redemption.
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If the sinking fund payment or payments made in cash plus any
unused balance of any preceding sinking fund payments made in cash shall exceed
$100,000 (or a lesser sum if the Company shall so request), it shall be applied
by the Trustee on the May 1 following the date of such payment to the redemption
of Debentures at the principal amount thereof with accrued interest to the date
fixed for redemption. The Trustee shall select, in the manner provided in
Section 3.02, for redemption on such May 1, a sufficient principal amount of
Debentures to absorb said cash, as nearly as may be, and shall, at the expense
and in the name of the Company, thereupon cause notice of redemption of the
Debentures to be given in substantially the manner provided in Section 3.02 (and
with the effect provided in Section 3.03) for the redemption of Debentures. Any
sinking fund monies not so applied or allocated by the Trustee to the redemption
of Debentures shall be added to the next cash sinking fund payment received by
the Trustee and, together with such payment, shall be applied in accordance with
the provisions of this Section 3.04. Any and all sinking fund monies held by the
Trustee on May 1, 2010 (or earlier, if the maturity is accelerated) and not held
for the payment or redemption of particular Debentures shall be applied by the
Trustee, together with other monies, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of, and interest on, the
Debentures at maturity.
On or before each sinking fund payment date, the Company shall
pay to the Trustee in cash an amount equal to all interest accrued to the date
fixed for redemption of Debentures to be redeemed on the following May 1
pursuant to this Section.
The Trustee shall not redeem or cause to be redeemed any
Debentures with sinking fund monies or mail any notice of redemption of
Debentures by operation of the sinking fund during the continuance of a default
in payment of interest or premium on the Debentures or of any Event of Default
(other than an Event of Default occurring as a consequence of this paragraph),
except that if the notice of redemption of any Debentures shall theretofore have
been mailed in accordance with the provisions hereof, the Trustee shall redeem
or cause to be redeemed such Debentures if cash sufficient for that purpose
shall be deposited with the Trustee for that purpose in accordance with the
terms of this Article Three. Except as aforesaid, any monies in the sinking fund
at the time when any such default or Event of Default shall occur and any monies
thereafter paid into the sinking fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of all the
Debentures; provided, however, that in case such Event of Default or default
shall have been cured or waived as provided herein, such monies shall thereafter
be applied on the next May 1 on which such monies may be applied pursuant to the
provisions of this Section 3.04.
SECTION 3.05. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment bankers or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the
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Debentureholders, before the close of business not later than the business day
prior to the date fixed for redemption, an amount not less than the applicable
redemption price, together with interest accrued to the date fixed for
redemption, of such Debentures. Notwithstanding anything to the contrary
contained in this Article Three, the obligation of the Company to pay the
redemption price of such Debentures, together with interest accrued to the date
fixed for redemption, shall be deemed to be satisfied and discharged to the
extent such amount is so paid by such purchasers. The Company shall promptly
notify the Trustee by mail of entering into any such arrangement. If such an
agreement is entered into, any Debentures not duly surrendered for conversion by
the holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article Fifteen)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption, subject to payment of
the above amount as aforesaid. The Trustee shall hold and dispose of any such
amount paid to it in the same manner as it would moneys deposited with it by the
company for the redemption of Debentures. Without the Trustee's prior written
consent, no arrangement between the company and such purchasers for the purchase
and conversion of any Debentures shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Debentures between the Company and such purchasers to which the Trustee has not
consented in writing, including the costs and expenses incurred by the Trustee
in the defense of any claim or liability arising out of or in connection with
the exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE FOUR
SUBORDINATION OF DEBENTURES
SECTION 4.01. Agreement of Subordination. The Company
covenants and agrees, and each holder of Debentures issued hereunder by his
acceptance thereof likewise covenants and agrees, that all Debentures shall be
issued subject to the provisions of this Article Four; and each Person holding
any Debenture, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest
on all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness.
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No provision of this Article Four shall prevent the occurrence
of any default or Event of Default hereunder.
SECTION 4.02. Payments to Debentureholders. In the event and
during the continuation of any default in the payment of principal, interest or
rental on any Senior Indebtedness continuing beyond the period of grace, if any,
specified in the instrument or lease evidencing such Senior Indebtedness, then,
unless and until such event shall have been cured or waived, or shall have
ceased to exist, no payment shall be made by the Company with respect to the
principal of, or premium, if any, or interest on the Debentures or as a sinking
fund for the Debentures, except sinking fund payments made by the acquisition of
Debentures under Section 3.04 prior to the happening of such default and
payments made pursuant to Article Thirteen hereof from monies deposited with the
Trustee pursuant thereto prior to the happening of such default.
Upon any payment by the Company, or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full, or payment thereof provided for
in money in accordance with its terms, before any payment is made on account of
the principal (and premium, if any) or interest on the Debentures (except
payments made pursuant to Article Thirteen hereof from monies deposited with the
Trustee pursuant thereto prior to the happening of such dissolution, winding-up,
liquidation or reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the holders of the Debentures of the Trustee would be
entitled, except for the provisions of this Article Four, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the holders of the Debentures or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders) or their representative or representatives, or to the
trustee or trustees under any Indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the holders of the Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee or the holders of the Debentures
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before all Senior Indebtedness is paid in full, or provision is made for such
payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article Four, the words, "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the extent
provided in this Article Four with respect to the Debentures to the payment of
all Senior Indebtedness which may at the time be outstanding; provided that (i)
the Senior Indebtedness is assumed by the new corporation, if any, resulting
from any such reorganization or readjustment, and (ii) the rights of the holders
of the Senior Indebtedness (other than leases) and of leases which are assumed
are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Twelve hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Twelve hereof. Nothing in this Section 4.02 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.06.
SECTION 4.03. Subrogation of Debentures. Subject to the
payment in full of all Senior Indebtedness, the rights of the holders of the
Debentures shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Debentures shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of the Senior Indebtedness of any cash, property or securities to
which the holders of the Debentures or the Trustee would be entitled except for
the provisions of this Article Four, and no payment over pursuant to the
provisions of this Article Four, to or for the benefit of the holders of Senior
Indebtedness by holders of the Debentures or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Debentures, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of this
Article Four are and are intended solely for the purpose of defining the
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relative rights of the holders of the Debentures, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article Four or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Four of
the holders of Senior Indebtedness in respect of cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article Four, the Trustee and the holders of the Debentures
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the holders of the
Debentures, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon and all other
facts pertinent thereto or to this Article Four.
SECTION 4.04. Authorization by Debentureholders. Each holder
of a Debenture by his acceptance thereof authorizes and directs the Trustee in
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in this Article Four and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 4.05. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment of moneys to or by the Trustee in respect of
the Debentures pursuant to the provisions of this Article Four. The Trustee
shall be entitled to assume that no such fact exists unless the Company or any
holder of Senior Indebtedness or any trustee therefor has given such notice to
the Trustee at the principal office of the Trustee. Notwithstanding the
provisions of this Article Four or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of moneys to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article Four,
unless and until the Trustee shall have received written notice
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thereof at the Principal Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and prior to the
receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, that if on a date not
fewer than three business days prior to the date upon which by the terms hereof
any such moneys may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debenture) the Trustee shall not have received, with respect to such moneys,
the notice provided for in this Section 4.05, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such moneys and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set
forth, nothing shall prevent any payment by the Company or the Trustee to the
Debentureholders of moneys in connection with a redemption of Debentures if (i)
notice of such redemption has been given pursuant to Article Three or Section
13.01 hereof prior to the receipt by the Trustee of written notice as aforesaid,
and (ii) such notice of redemption is given not earlier than 60 days before the
redemption date.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Four, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Four, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 4.06. Trustee's Relation to Senior Debt. The Trustee
in its individual capacity shall be entitled to all the rights set forth in this
Article Four in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 8.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in
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this Article Four, and no implied covenants or obligations with respect to the
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, the Trustee shall not be liable to any
holder of Senior Indebtedness if it shall pay over or deliver to holders of
Debentures, the Company or any other Person moneys or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this Article Four or
otherwise.
SECTION 4.07. No Impairment of Subordination. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
ARTICLE FIVE
particular covenants of the company
SECTION 5.01. Payment of Principal, Premium and Interest. The
Company covenants and agrees that it will duly and punctually pay or cause to be
paid the principal of and premium, if any, and interest on each of the
Debentures at the places, at the respective times and in the manner provided
herein and in the Debentures. Each installment of interest on the Debentures may
be paid by mailing checks for the interest payable to or upon the written order
of the holders of Debentures entitled thereto as they shall appear on the
registry books of the Company.
SECTION 5.02. Offices for Notice and Payments, etc. So long as
any of the Debentures remain outstanding, the Company will maintain in
Baltimore, Maryland or in The City of New York, New York, an office or agency
where the Debentures may be presented for payment, and an office or agency where
the Debentures may be presented for registration of transfer and for exchange
and conversion as in this Indenture provided and an office or agency where
notices and demands to or upon the Company in respect of the Debentures or of
this Indenture may be served. The Company will give to the Trustee written
notice of the location of each such office or agency and of any change of
location thereof. If the Company shall fail to maintain any such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices may be
served at the principal office of the Trustee in Xxx Xxxx xx
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Xxx Xxxx, Xxx Xxxx and the Company hereby appoints the Trustee at the principal
office of the Trustee in Xxx Xxxx xx Xxx Xxxx, Xxx Xxxx its agent to receive all
such presentations, demands and notices.
SECTION 5.03. Appointments to Fill Vacancies in Trustee's
Office. The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 5.04. Provision as to Paying Agent. (a) If the Company
shall appoint a paying agent other than the Trustee, it will cause such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 5.04;
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or by
any other obligor on the Debentures) in trust for the benefit of the
holders of the Debentures;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debentures) to make any
payment of the principal of and premium, if any, or interest on the
Debentures when the same shall be due and payable and the Trustee shall
not be deemed to have such notice until such notice shall have been
received by the Trustee; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company will, prior to each due date of the principal of,
premium, if any or interest on the Debentures, deposit with the paying agent a
sum sufficient to pay such principal, premium, if any, or interest, and (unless
such paying agent is the Trustee) the Company will promptly notify the Trustee
of any failure to take such action.
(b) If the Company shall act as its own paying agent, it will,
on or before each due date of the principal of and premium, if any, or interest
on the Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal and premium, if
any, or interest so becoming due and will notify the Trustee of any failure to
take such action and of any failure by the Company (or by any other obligor
under the Debentures) to make any payment of the principal of and premium, if
any, or interest on the Debentures when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this
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Indenture, or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust by the Company or any paying agent hereunder as required by
this Section 5.04, such sums to be held by the Trustee upon the trusts herein
contained and upon such payment by the Company or any paying agent to the
Trustee, the Company or such paying agent shall be released from all further
liability with respect to such money.
(d) Anything in this Section 5.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
5.04 is subject to Sections 13.03 and 13.04.
SECTION 5.05. Notification of Events of Default. Forthwith
upon the occurrence of an Event of Default, the Company covenants and agrees to
deliver to the Trustee written notice of such occurrence, setting forth the
details thereof and the action which the Company is taking or proposes to take
with respect thereto.
SECTION 5.06. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
written statement signed by the President or a Vice President and by the
Treasurer or an Assistant Treasurer stating, as to each signer thereof, that
(1) a review of the activities of the Company during such
year and of performance under this Indenture has been made under his or
her supervision and
(2) to the best of his or her knowledge, based on such
review, the Company has fulfilled all its obligations under this
Indenture throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to him and the nature and status thereof.
ARTICLE SIX
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 6.01. Debentureholders' Lists. The Company covenants
and agrees that it will furnish or cause to be furnished to the Trustee,
semiannually, not more than 15 days after each April 15 and October 15 in each
year beginning with October 15, 1986, and at such other times as the Trustee may
request in writing, within thirty days after receipt by the Company of any such
request, a list in such form as the Trustee may reasonably require of the names
and addresses of the holders of Debentures as of the date not more than fifteen
days
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prior to the time such information is furnished, except that no such list need
be furnished so long as the Trustee is acting as Debenture registrar.
SECTION 6.02. Preservation and Disclosure of Lists. (a) The
Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 6.01 or
maintained by the Trustee in its capacity as Debenture registrar, if so acting.
The Trustee may destroy any list furnished to it as provided in Section 6.01
upon receipt of a new list so furnished.
(b) In case three or more holders of Debentures (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Debenture for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debentures with respect to their rights under this Indenture or under the
Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its
election, either:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 6.02, or
(2) inform such applicants as to the approximate number of
holders of Debentures whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 6.02, and as to the
approximate cost of mailing to such Debentureholders the form of proxy
or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Debentureholder whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 6.02 a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Securities and Exchange Commission, together with a
copy of the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best interests
of the holders of Debentures or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If said Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of
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such objections or if, after due entry of an order sustaining one or more of
such objections, said Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of the Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent nor the Debenture registrar shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the holders of Debentures in accordance with the
provisions of subsection (b) of this Section 6.02, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).
SECTION 6.03. Reports by the Company. (a) The Company
covenants and agrees to file with the Trustee, within fifteen days after the
Company is required to file the same with the Securities and Exchange
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as said
Commission may from time to time by rules and regulations prescribe) which the
Company may be required to file with said Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and said Commission, in accordance with
rules and regulations prescribed from time to time by said Commission, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee
and the Securities and Exchange Commission, in accordance with the rules and
regulations prescribed from time to time by said Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to
all holders of Debentures, as the names and addresses of such holders appear
upon the registry books of the Company, within thirty days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to
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subsections (a) and (b) of this Section 6.03 as may be required by rules and
regulations prescribed from time to time by the Securities and Exchange
Commission.
SECTION 6.04. Reports by the Trustee. (a) On or before July
15, 1986, and on or before July 15 in every year thereafter, so long as any
Debentures are outstanding hereunder, the Trustee shall transmit to the
Debentureholders, as hereinafter in this Section 6.04 provided, a brief report
dated as of the preceding May 15 with respect to:
(1) its eligibility under Section 8.09, and its
qualification under Section 8.08, or in lieu thereof, if to the best of
its knowledge it has continued to be eligible and qualified under such
Sections, a written statement to such effect;
(2) the character and amount of advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may claim a
lien or charge, prior to that of the Debentures, on any property or
funds held or collected by it as Trustee, except that the Trustee shall
not be required (but may elect) to state such advances if such advances
so remaining unpaid aggregate not more than one-half of one percent of
the principal amount of the Debentures outstanding on the date of such
report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Debentures) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a
creditor relationship arising in any manner described in paragraphs
(2), (3), (4) or (6) of subsection (b) of Section 8.13;
(4) the property and funds, if any, physically in the
possession of the Trustee, as such, on the date of such report;
(5) any additional issue of Debentures which the Trustee
has not previously reported; and
(6) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously reported
and which in its opinion materially affects the Debentures, except
action in respect of a default, notice of which has been or is to be
withheld by it in accordance with the provisions of Section 7.08.
(b) The Trustee shall transmit to the Debentureholders, as
hereinafter provided, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the
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Trustee (as such), since the date of the last report transmitted pursuant to the
provisions of subsection (a) of this Section 6.04 (or, if no such report has yet
been so transmitted, since the date of execution of this Indenture), for the
reimbursement of which it claims or may claim a lien or charge prior to that of
the Debentures on property or funds held or collected by it as Trustee, and
which it has not previously reported pursuant to this subsection, except that
the Trustee shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate ten percent or less of the
principal amount of Debentures outstanding at such time, such report to be
transmitted within ninety days after such time.
(c) Reports pursuant to this Section 6.04 shall be transmitted
by mail to all holders of Debentures as the names and addresses of such holders
appear upon the registry books of the Company and to such holders of Debentures
as have within the two years preceding such transmission, filed their names and
addresses with the Trustee for that purpose.
(d) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with each stock
exchange upon which the Debentures are listed and also with the Securities and
Exchange Commission. The Company will notify the Trustee when and as the
Debentures become listed on any stock exchange.
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON THE EVENT OF DEFAULT
SECTION 7.01. Events of Default. In case one or more of the
following Events of Default (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body and whether or not
prohibited by the provisions of Article Four) shall have occurred and be
continuing;
(a) default in the payment of any installment of interest upon
any of the Debentures as and when the same shall become due and
payable, and continuance of such default for a period of thirty days;
or
(b) default in the payment of the principal of and premium, if
any, on any of the Debentures as and when the same shall become due and
payable either at maturity or in connection with any redemption, by
declaration or otherwise; or
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(c) default in the payment of any sinking fund installment as
and when the same shall become due and payable; or
(d) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Debentures or in this Indenture continued for a period
of sixty days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the
Company by the Trustee, or to the Company and the Trustee by the
holders of at least twenty-five percent in aggregate principal amount
of the Debentures at the time outstanding; or
(e) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian, or other similar
official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking
possession by any such official in any involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to or
fail generally to pay its debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a
period of ninety consecutive days;
then and in each and every such case, unless the principal of all of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than twenty-five percent in aggregate principal amount of
the Debentures then outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by Debentureholders), may declare the principal of
all the Debentures and the interest accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Debentures
contained to the contrary notwithstanding. This provision, however, is subject
to the condition that if, at any time after the principal of the Debentures
shall have been so declared due and payable, and before any judgment or decree
for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the
Debentures and the principal of and
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premium, if any, on any and all Debentures which shall have become due otherwise
than by acceleration (with interest on overdue installments (to the extent that
payment of such interest is enforceable under applicable law) and on such
principal and premium, if any, at the rate borne by the Debentures, to the date
of such payment or deposit) and the expenses of the Trustee, and if any and all
defaults under this Indenture, other than the nonpayment of principal of and
premium, if any, and accrued interest on Debentures which shall have become due
by acceleration, shall have been cured or waived pursuant to Section 7.07--then
and in every such case the holders of a majority in aggregate principal amount
of the Debentures then outstanding, by written notice to the Company and to the
Trustee, may rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
SECTION 7.02. Payment of Debentures on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the payment of
any installment of interest upon any of the Debentures as and when the same
shall become due and payable, and such default shall have continued for a period
of thirty days, or (b) in case default shall be made in the payment of the
principal of and premium, if any, on any of the Debentures as and when the same
shall have become due and payable, whether at maturity of the Debentures or in
connection with any redemption, by declaration or otherwise--then, upon demand
of the Trustee, the Company will pay to the Trustee, for the benefit of the
holders of the Debentures, the whole amount that then shall have become due and
payable on all such Debentures for principal and premium, if any, or interest,
or both, as the case may be, with interest upon the overdue principal and
premium, if any, and (to the extent that payment of such interest is enforceable
under applicable law) upon the overdue installments of interest at the rate
borne by the Debentures; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Debentures to the
registered holders, whether or not the Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts
upon such demands, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the
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sums so due and unpaid, and may prosecute any such action or proceeding to
judgment or final decree, and may enforce any such judgment or final decree
against the Company or any other obligor on the Debentures and collect in the
manner provided by law out of the property of the Company or any other obligor
on the Debentures wherever situated the monies adjudged or decreed to be
payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Debentures
under Title 11 of the United States Code, or any other applicable law, or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company, the property of the Company or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Company or other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Debentures, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of its charges and expenses; and
any receiver, assignee or trustee in bankruptcy or reorganization liquidator,
custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for compensation and
expenses, including counsel fees incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation,
expenses and counsel fees out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, monies, securities
and other property which the holders of the Debentures may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or adopt on behalf of any Debentureholder any
plan of reorganization or arrangement, affecting the Debentures or the rights of
any Debentureholder, or to authorize the Trustee to vote in respect of the claim
of any Debentureholder in any such proceeding.
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All rights of action and of asserting claims under this
Indenture, or under any of the Debentures, may be enforced by the Trustee
without the possession of any of the Debentures, or the production thereof on
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Debentures.
In any proceedings brought by the Trustee (and when any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Debentures, and, to the extent permitted by law, it shall not
be necessary to make any holders of the Debentures parties to any such
proceedings.
SECTION 7.03. Application of Monies Collected by Trustee.
Subject to the provisions of Article Four, any monies collected by the Trustee
pursuant to this Article Seven shall be applied in the order following, at the
date or dates fixed by the Trustee for the distribution of such monies, upon
presentation of the several Debentures, and stamping thereon the payment, if
only partially paid, and upon surrender thereof is fully paid:
First: To the payment of all amounts due the Trustee under
Section 8.06;
Second: In case the principal of the outstanding Debentures
shall not have become due and be unpaid, to the payment of interest on
the Debentures in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Debentures, such
payments to be made ratably to the persons entitled thereto;
Third: In case the principal of the outstanding Debentures
shall have become due, by declaration or otherwise, and be unpaid to
the payment of the whole amount then owing and unpaid upon the
Debentures for principal and premium, if any, and interest, with
interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by the Debentures;
and in case such monies shall be insufficient to pay in full the whole
amounts so due and unpaid upon the Debentures, then to the payment of
such principal and premium, if any, and interest without preference or
priority of principal and premium, if any, over interest, or of
interest over principal and premium, if any, or of any installment of
interest over any other installment of interest, or of any Debenture
over any other Debenture, ratably to the aggregate of such principal
and premium, if any, and accrued and unpaid interest;
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Fourth: To the payment of the remainder, if any, to the
Company or any other person lawfully entitled thereto.
SECTION 7.04. Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent in aggregate principal amount of the Debentures then outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for sixty
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.07; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture with every other
taker and holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures (except as otherwise provided
herein). For the protection and enforcement of this Section 7.04, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provisions of this Indenture and any
provision of any Debenture, however, the right of any holder of any Debenture to
receive payment of the principal of and premium, if any, and interest on such
Debenture, on or after the respective due dates expressed in such Debenture, or
to institute suit for the enforcement of any such payment on or after such
respective dates against the Company shall not be impaired without the consent
of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in his own behalf and for his own
benefit may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
SECTION 7.05. Proceedings by Trustee. In case of an Event of
Default hereunder the Trustee may in its discretion proceed to protect and
enforce the rights vested in
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it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 7.06. Remedies Cumulative and Continuing. Except as
provided in Section 2.06 with respect to the holder of the Debenture, all powers
and remedies given by this Article Seven to the Trustee or to the
Debentureholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any thereof or of any other powers and remedies available to
the Trustee or the holders of the Debentures, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Debentures to exercise any right or power
accruing upon any default occurring and continuing as aforesaid shall impair any
such right or power, or shall be construed to be a waiver of any such default or
an acquiescence therein; and, subject to the provisions of Section 7.04, every
power and remedy given by this Article Seven or by law to the Trustee or to the
Debentureholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debentureholders.
SECTION 7.07. Direction of Proceedings and Waiver of Defaults
by Majority Debentureholders. The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, however, that (subject to
the provisions of Section 8.01) the Trustee shall have the right to decline to
follow any such direction if the Trustee shall be advised by counsel that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceedings so directed could involve the Trustee
in personal liability or be unduly prejudicial to holders not joining therein.
The holders of a majority in aggregate principal amount of the Debentures at the
time outstanding may on behalf of the holders of all of the Debentures waive any
past default or Event of Default hereunder and its consequences except a default
in the payment of interest, or premium, if any, on, or the principal of, the
Debentures or a failure by the Company to convert any Debentures into Common
Stock. Upon any such waiver the Company, the Trustee and the holders of the
Debentures shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extent to any subsequent or other default
or Event of Default or impair any right consequent thereon. Whenever any default
or Event of Default hereunder shall have been waived as permitted by this
Section 7.07, said default or Event of Default
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shall for all purposes of the Debentures and this Indenture be deemed to have
been cured and to be not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 7.08. Notice of Defaults. The Trustee shall, within
ninety days after the occurrence of a default, mail to all Debentureholders, as
the names and addresses of such holders appear upon the registry books of the
Company, notice of all defaults known to the Trustee, unless such defaults shall
have been cured before the giving of such notice (the term "defaults" for the
purpose of this Section 7.08 being hereby defined to be the events specified in
clauses (a), (b), (c), (d), (e) and (f) of Section 7.01, not including periods
of grace, if any, or the giving of any Notice, or both provided for therein);
and provided that, except in the case of default in the payment of the principal
of or premium, if any, or interest on any of the Debentures or in the making of
any sinking fund payment, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Debentureholders. The Trustee shall not be charged with knowledge and shall not
be deemed to have notice of any default or Event of Default, except an Event of
Default under Section 7.01(a) or Section 7.01(b) or Section 7.01(c), unless
written notice thereof stating that such notice is a "Notice of Default" shall
have been given to a Responsible Officer of the Trustee by the Company or a
Debentureholder or any agent of a Debentureholder; and, in the absence of such
written notice, the Trustee may conclusively assume that there is no default or
Event of Default.
SECTION 7.09. Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any Debenture by his acceptance thereof
shall be deemed to have agreed, that any court may, in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided, that the provisions of
this Section 7.09 shall not apply to any suit instituted by the Trustee, to any
suit instituted by any Debentureholder, or group of Debentureholders, holding in
the aggregate more than ten percent in principal amount of the Debentures
outstanding, or to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of or premium, if any, or interest
on any Debenture on or after the due date expressed in such Debenture or to any
suit for the enforcement of the right to convert any Debenture in accordance
with the provisions of Article Fifteen.
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ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01. Duties and Responsibilities of Trustee. The
Trustee, prior to the occurrence of an Event of Default and after the curing of
all Events of Default which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but, in the case of any such certificates or opinions which by
any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Debentures at the time outstanding
4
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determined as provided in Section 9.04 relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions
of this Section.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 8.02. Reliance on Documents, Opinions, etc. Except as
otherwise provided in Section 8.01,
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an assistant Secretary or of the Company;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Debentureholders pursuant to the
provisions of this Indenture, unless such Debentureholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture;
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(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, debenture,
coupon or other paper or document unless requested in writing to do so
by the holders of not less than a majority in principal amount of the
Debentures then outstanding; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; the reasonable
expenses of every such examination shall be paid by the Company or, if
paid by the Trustee or any predecessor Trustee, shall be repaid by the
Company upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it with due care hereunder.
SECTION 8.03. No Responsibility for Recitals, etc. The
recitals contained herein and in the Debentures (except in the Trustee's
certificate of authentication) shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be accountable for the use
or application by the Company of any Debentures or the proceeds of any
Debentures authenticated and delivered by the Trustee in conformity with the
provisions of this Indenture.
SECTION 8.04. Trustee, Paying Agents, Conversion Agents or
Registrar May Own Debentures. The Trustee or any paying agent or any conversion
agent or Debenture registrar, in its individual or any other capacity, may
become the owner or pledgee of Debentures with the same rights it would have if
it were not Trustee, paying agent, conversion agent or Debenture registrar.
SECTION 8.05. Monies To Be Held in Trust. Subject to the
provisions of Section 13.04, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
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SECTION 8.06. Compensation and Expenses of Trustee. The
Company covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify the Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 8.06 to compensate
or indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall not be subordinate to the payment of Senior
Indebtedness pursuant to Article IV. Those obligations shall be secured by a
lien prior to that of the Debentures upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Debentures. The obligations of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.
SECTION 8.07. Officers' Certificate as Evidence. Except as
otherwise provided in Section 8.01, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be provided or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such Certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 8.08. Conflicting Interest of Trustee. (a) If the
Trustee has or shall acquire any conflicting interest, as defined in this
Section 8.08, it shall, within ninety days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest or resign in
the manner and with the effect specified in Section 8.10.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section 8.08, the Trustee shall, within
ten days after the expiration of such ninety-day period, transmit notice of such
failure to all holders of Debentures, as the names and addresses of such holders
appear upon the registry books of the Company.
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(c) For the purpose of this Section 8.08, the Trustee shall be
deemed to have a conflicting interest if:
(1) the Trustee is trustee under another indenture under
which any other securities, or certificates of interest or
participation in any other securities, of the Company are outstanding,
unless such other indenture is a collateral trust indenture under which
the only collateral consists of Debentures issued under this Indenture;
provided that there shall be excluded from the operation of this
paragraph any other indenture or indentures under which other
securities, or certificates of interest or participation in other
securities of the Company, are outstanding if (i) this Indenture and
such other indenture or indentures are wholly unsecured and such other
indenture or indentures are hereafter qualified under the Trust
Indenture Act of 1939, unless the Securities and Exchange Commission
shall have found and declared by order pursuant to subsection (b) of
Section 305 or subsection (c) of Section 307 of the Trust Indenture Act
of 1939 that differences exist between the provisions of this Indenture
and the provisions of such other indenture or indentures which are so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture and
such other indenture or indentures, or (ii) the Company shall have
sustained the burden of proving, on application to the Securities and
Exchange Commission and after opportunity for hearing thereon, that the
trusteeship under this Indenture and such other indenture is not so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under one of such
indentures;
(2) the Trustee or any of its directors or executive
officers is an obligor upon the Debentures issued under this Indenture
or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee, or
representative of the Company, or of an underwriter (other than the
Trustee itself) for the Company who is currently engaged in the
business of underwriting, except that (A) one individual may be a
director and/or an executive officer of the Trustee and a director
and/or an executive officer of the Company, but may not be at the same
time an executive officer of both the Trustee and the Company; (B) if
and so long as the number of directors of the Trustee in office is more
than nine, one additional individual may be a director and/or an
executive officer of the Trustee and a director of the Company; and (C)
the Trustee may be designated by
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the Company or by an underwriter for the Company to act in the capacity
of transfer agent, registrar, custodian, paying agent, fiscal agent,
escrow agent, or depositary, or in any other similar capacity, or,
subject to the provisions of paragraph (1) of this subsection (c), to
act as trustee whether under an indenture or otherwise;
(5) ten percent or more of the voting securities of the
Trustee is beneficially owned either by the Company or by any director,
partner, or executive officer thereof, or twenty percent or more of
such voting securities is beneficially owned, collectively, by any two
or more of such persons; or ten percent or more of the voting
securities of the Trustee is beneficially owned either by an
underwriter for the Company or by any director, partner, or executive
officer thereof, or is beneficially owned, collectively, by any two or
more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (A) five
percent or more of the voting securities, or ten percent or more of any
other class of security, of the Company, not including the Debentures
issued under this Indenture and securities issued under any other
indenture under which the Trustee is also trustee, or (B) ten percent
or more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, five percent
or more of the voting securities of any person who, to the knowledge of
the Trustee, owns ten percent or more of the voting securities of, or
controls directly or indirectly or is under direct or indirect common
control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, ten percent
or more of any class of security of any person who, to the knowledge of
the Trustee, owns fifty percent or more of the voting securities of the
Company; or
(9) the Trustee owns on May 15 in any calendar year, in the
capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of twenty-five percent or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7), or (8) of this
subsection (c). As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator or testamentary
trustee of an estate which included them, the provisions of the
preceding sentence shall not apply, for a period of two years from the
date of such acquisition, to the extent that such securities included
in such estate do not exceed twenty-five
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percent of such voting securities or twenty-five percent of any such
class of security. Promptly after May 15, in each calendar year, the
Trustee shall make a check of its holdings of such securities in any of
the above-mentioned capacities as of such May 15. If the Company fails
to make payment in full of principal of, premium, if any, or interest
on any of the Debentures when and as the same become due and payable,
and such failure continues for thirty days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of
the above-mentioned capacities as of the date of the expiration of such
thirty-day period and, after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection (c).
The specifications of percentages in paragraphs (5) to (9),
inclusive, of this subsection (c) shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but shall
not include any note or other evidence of indebtedness issued to evidence an
obligation to repay monies lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in default when a default in payment of principal shall have continued for
thirty days or more and shall not have been cured; and (C) the Trustee shall not
be deemed to be the owner or holder of (i) any security which it holds as
collateral security (as trustee or otherwise) for an obligation which is not in
default as defined in clause (B) above, or (ii) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (iii) any security which it holds as agent for collection, or as custodian,
escrow agent, or depositary, or in any similar representative capacity.
Except as provided in the next preceding paragraph hereof, the
word "security" or "securities" as used in this Indenture shall mean any note,
stock, treasury stock, bond, debenture, evidence or indebtedness, certificate of
interest or participation in any profit-sharing agreement, collateral-trust
certificate, pre-organization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other mineral rights,
or, in general, any interest or instrument commonly known as a "security" or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
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(d) For the purposes of this Section 8.08:
(1) The term "underwriter" when used with reference to the
Company shall mean every person who, within three years prior to the
time as of which the determination is made, has purchased from the
Company with a view to, or has offered or sold for the Company in
connection with, the distribution of any security of the Company
outstanding at such time, or has participated or has had a direct or
indirect participation in any such undertaking, or has participated or
has had a participation in the direct or indirect underwriting of any
such undertaking, but such term shall not include a person whose
interest was limited to a commission from an underwriter or dealer not
in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" shall mean any director of a
corporation or any individual performing similar functions with respect
to any organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or political
subdivision thereof. As used in this paragraph, the term "trust" shall
include only a trust where the interest or interests of the beneficiary
or beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement whereby
a trustee or trustees or agent or agents for the owner or holder of
such security are presently entitled to vote in the direction or
management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the
Debentures.
(6) The term "executive officer" shall mean the president,
every vice president, every trust officer, the cashier, the secretary,
and the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
The percentages of voting securities and other securities
specified in this Section 8.08 shall be calculated in accordance with the
following provisions:
(A) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
8.08 (each of whom is referred to as a "person" in this paragraph)
means such amount of the outstanding voting securities
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of such person as entitles the holder or holders thereof to cast such
specified percentage of the aggregate votes which the holders of all
the outstanding voting securities of such person are entitled to cast
in the direction or management of the affairs of such person.
(B) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(C) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security.
(D) The term "outstanding" means issued and not held by or for
the account of the issuer. The following Securities shall not be deemed
outstanding within the meaning of this definition:
(i) Securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) Securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) Securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) Securities held in escrow if placed in escrow by
the issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(E) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided,
however, that, in the case of secured evidences of indebtedness, all of
which are issued under a single indenture, differences in the interest
rates or maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes; and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
SECTION 8.09. Eligibility of Trustee. The Trustee hereunder
shall at all times be a corporation organized and doing business under the laws
of the United States or any State or Territory thereof or of the District of
Columbia authorized under such laws to
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exercise corporate trust powers, having a combined capital and surplus of at
least five million dollars, subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.10.
SECTION 8.10. Resignation or Removal of Trustee. (a) The
Trustee may at any time resign by giving written notice of such resignation to
the Company and by mailing notice thereof to the holders of Debentures at their
addresses as they shall appear on the registry books of the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within sixty days
after the mailing of such notice of resignation to the Debentureholders, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six months may, subject to
the provisions of Section 7.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 8.08 after written request therefor by the
Company or by any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.09 and shall fail to resign after
written request therefor by the Company or by any such Debentureholder,
or
(3) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
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then, in any such case the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten days after such nomination the Company objects
thereto, in which case the Trustee so removed or any Debentureholder, upon the
terms and conditions and otherwise as in subsection (a) of this Section 8.10
provided, may petition any court of competent jurisdiction for an appointment of
a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
SECTION 8.11. Acceptance by Successor Trustee. Any successor
trustee appointed as provided in Section 8.10 shall execute, acknowledge and
deliver to the Company and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
8.06.
No successor trustee shall accept appointment as provided in
this Section 8.11 unless at the time of such acceptance such successor trustee
shall be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09.
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Upon acceptance of appointment by a successor trustee as
provided in this Section 8.11, the Company shall mail notice of the succession
of such trustee hereunder to the holders of Debentures at their addresses as
they shall appear on the registry books of the Company. If the Company fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 8.12. Succession by Merger, etc. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the trust business of the Trustee,
shall be the successor to the Trustee hereunder, provided such corporation shall
be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Debentures shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee, and deliver
such Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Debentures or in this Indenture provided
that the certificate of the Trustee shall have; provided, however, that the
right to adopt the certificate of authentication of any predecessor Trustee or
authenticate Debentures in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 8.13. Limitation on Rights of Trustee as a Creditor.
(a) Subject to the provisions of subsection (b) of this Section 8.13, if the
Trustee shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company within four months prior to a default, as defined in
subsection (c) of this Section 8.13, or subsequent to such a default, then,
unless and until such default shall be cured, the Trustee shall set apart and
hold in a special account for the benefit of the Trustee individually, the
holders of the Debentures and the holders of other indenture securities (as
defined in paragraph (2) of subsection (c) of this Section 8.13);
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such four-month period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any
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property described in paragraph (2) of this subsection, or from the
exercise of any right of setoff which the Trustee could have exercised
if a petition in bankruptcy had been filed by or against the Company
upon the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in satisfaction
or composition thereof, or otherwise, after the beginning of such
four-month period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to Title 11 of the United States Code or
applicable State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such four-month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such four-month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to believe
that a default, as defined in subsection (c) of this Section 8.13,
would occur within four months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for
such claim as provided in such paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such four-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
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If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Debentureholders and the holders of other
indenture securities in such manner that the Trustee, the Debentureholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee, the Debentureholders, and the holders of other
indenture securities dividends on claims filed against the Company in bankruptcy
or receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, but after crediting thereon receipts
on account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership, or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, the Debentureholders, and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Debentureholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such four-month period shall be subject to the provisions of this
subsection (a) as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four-month
period, it shall be subject to the provisions of this subsection (a) if and only
if the following conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such four-month
period; and
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(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection
(a) of this Section 8.13 a creditor relationship arising from
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction, or by this Indenture, for the purposes
of preserving any property which shall at any time be subject to the
lien of this Indenture or of discharging tax liens or other prior liens
or encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Debentureholders at the time and in the manner provided in Section 6.04
with respect to reports pursuant to subsections (a) and (b) thereof,
respectively;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of
this Section 8.13;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section 8.13.
(c) As used in this Section 8.13:
(1) the term "default" shall mean any failure to make
payment in full of the principal of or interest upon any of the
Debentures or upon the other indenture securities when and as such
principal or interest becomes due and payable;
(2) the term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined in the
Trust Indenture Act of 1939) outstanding under any other indenture (A)
under which the Trustee is also trustee, (B) which
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contains provisions substantially similar to the provisions of
subsection (a) of this Section 8.13 and (C) under which a default
exists at the time of the apportionment of the funds and property held
in said special account;
(3) the term "cash transaction" shall mean any transaction
in which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" shall mean any draft,
xxxx of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title
to, possession of, or lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security; provided that the
security is received by the Trustee simultaneously with the creation of
the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, xxxx of exchange,
acceptance or obligation; and
(5) the term "Company" shall mean any obligor upon the
Debentures.
ARTICLE NINE
CONCERNING THE DEBENTUREHOLDERS
SECTION 9.01. Action by Debentureholders. Whenever in this
Indenture it is provided that the holders of a specified percentage in aggregate
principal amount of the Debentures may take any action (including the making of
any demand or request, the giving of any notice, consent or waiver or the taking
of any other action), the fact that at the time of taking any such action the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article Ten, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders.
SECTION 9.02. Proof of Execution by Debentureholders. Subject
to the provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of
any instrument by a Debentureholder or his agent or proxy shall be sufficient if
made in accordance with such
5
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reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holder of Debentures shall
be proved by the registry of such Debentures or by a certificate of the
Debenture registrar.
The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 10.06.
SECTION 9.03. Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Debenture registrar may
deem the person in whose name such Debenture shall be registered upon the books
of the Company to be, and may treat him as, the absolute owner of such Debenture
(which or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and premium, if any, and interest on such
Debenture, for conversion of such Debenture and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any conversion
agent nor any Debenture registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Debenture.
SECTION 9.04. Company-Owned Debentures Disregarded. In
determining whether the holders of the requisite aggregate principal amount of
Debentures have concurred in any direction, consent, waiver or other action
under this Indenture, Debentures which are owned by the Company or any other
obligor on the Debentures or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Debentures shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action only Debentures which the
Trustee knows are so owned shall be so disregarded. Debentures so owned which
have been pledged in good faith may be regarded as outstanding for the purposes
of this Section 9.04 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Debentures and that the pledgee is not
the Company or a person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
SECTION 9.05. Revocation of Consents; Future Holders Bound. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture
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which is shown by the evidence to be included in the Debentures the holders of
which have consented to such action may, by filing written notice with the
Trustee at its principal office and upon proof of holding as provided in Section
9.02, revoke such action so far as concerns such Debenture. Except as aforesaid
any such action taken by the holder of any Debenture shall be conclusive and
binding upon such holder and upon all future holders and owners of such
Debenture and of any Debentures issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such
Debenture or any Debenture issued in exchange or substitution therefor.
ARTICLE TEN
DEBENTUREHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings. A meeting of
Debentureholders may be called at any time and from time to time pursuant to the
provisions of this Article Ten for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or
to give any directions to the Trustee, or to consent to the waiving of
any default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders pursuant to any of the
provisions of Article Seven;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article Eight;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
11.02; or
(4) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of
the Debentures under any other provision of this Indenture or under
applicable law.
SECTION 10.02. Call of Meetings by Trustee. The Trustee may at
any time call a meeting of Debentureholders to take any action specified in
Section 10.01, to be held at such time and at such place in New York, New York,
or in Baltimore, Maryland as the Trustee shall determine. Notice of every
meeting of the Debentureholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the registry books of the Company. Such notice shall also be mailed to the
Company.
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Such notice shall be mailed not less than twenty nor more than ninety days prior
to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice
if the holders of all Debentures then outstanding are present in person or by
proxy or if notice is waived before or after the meeting by the holders of all
Debentures outstanding, and if the Company and the Trustee are either present by
duly authorized representatives or have, before or after the meeting, waived
notice.
SECTION 10.03. Call of Meetings by Company or
Debentureholders. In case at any time the Company, pursuant to a resolution of
its Board of Directors, or the holders of at least ten percent in aggregate
principal amount of the Debentures then outstanding, shall have requested the
Trustee to call a meeting of Debentureholders, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within twenty days
after receipt of such request, then the Company or such Debentureholders may
determine the time and place in New York, New York or in Baltimore, Maryland for
such meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
SECTION 10.04. Qualifications for Voting. To be entitled to
vote at any meeting of Debentureholders a person shall (a) be a holder of one or
more Debentures or (b) be a person appointed by an instrument in writing as
proxy by a holder of one or more Debentures. The only persons who shall be
entitled to be present or to speak at any meeting of Debentureholders shall be
the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 10.05. Regulations. Notwithstanding any other
provisions of this Indenture, the Trustee may make such reasonable regulations
as it may deem advisable for any meeting of Debentureholders, in regard to proof
of the holding of Debentures and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall think
fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Debentureholders as provided in Section 10.03, in which case
the Company or the Debentureholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
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Subject to the provisions of Section 9.04, at any meeting each
Debentureholder or proxy shall be entitled to one vote for each $1,000 principal
amount of Debentures held or represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.02 or 10.03 may be adjourned from time to time by a majority of those
present, whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
SECTION 10.06. Voting. The vote upon any resolution submitted
to any meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the principal amount of the Debentures held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes case at the meeting. A
record in duplicate of the proceedings of each meeting of Debentureholders shall
be prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons have knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said notice
was mailed as provided in Section 10.02. The record shall show the principal
amount of the Debentures voting in favor of or against any resolution. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 10.07. No Delay of Rights by Meeting. Nothing in this
Article Ten contained shall be deemed or construed to authorize or permit, by
reason of any call of a meeting of Debentureholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right of rights conferred upon or reserved to the Trustee or to
the Debentureholders under any of the provisions of this Indenture or of the
Debentures.
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ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01. Supplemental Indentures without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to make provisions with respect to the conversion rights
of the holders of Debentures pursuant to the requirements of Section
15.06;
(b) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Debentures, any property or assets;
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article Twelve hereof;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the
Trustee shall consider to be for the benefit of the holders of
Debentures, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants,
restrictions or conditions a default or an Event of Default permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, however, that in respect of
any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default;
(e) to provide for the issuance under this Indenture of
Debentures in bearer form with coupon (including Debentures registrable
as to principal only) and to provide for exchangeability of such
Debentures with the Debentures issued hereunder in fully registered
form and to make all appropriate changes for such purpose; or
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture
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which shall not materially adversely affect the interests of the
holders of the Debentures.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 11.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debentures at the time outstanding,
notwithstanding any of the provisions of Section 11.02.
SECTION 11.02. Supplemental Indentures with Consent of
Debentureholders. With the consent (evidenced as provided in Article Nine) of
the holders of not less than a majority in aggregate principal amount of the
Debentures at the time outstanding, the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debenture, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof or premium, if any, thereon, or
impair the right of any Debentureholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Debentures, or
impair the right to convert the Debentures into Common Stock subject to the
terms set forth herein, including Section 15.06, without the consent of the
holder of each Debenture so affected, or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Debentures
then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case
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the Trustee may in its discretion, but shall not be obligated to, enter into
such supplemental indenture.
It shall not be necessary for the consent of the
Debentureholders under this Section 11.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 11.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures. Any supplemental indenture executed pursuant to the
provisions of this Article Eleven shall comply with the Trust Indenture Act of
1939, as then in effect. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article Eleven, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective
rights, limitation of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debentures shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 11.04. Notation on Debentures. Debentures
authenticated and delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article Eleven may bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company or the Trustee shall so determine, new Debentures so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
SECTION 11.05. Evidence of Compliance of Supplemental
Indenture To Be Furnished Trustee. The Trustee, subject to the provisions of
Section 8.01 and 8.02, may receive an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article Eleven.
ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. Company May Consolidate, etc., on Certain
Terms. Subject to the provisions of Section 12.02, nothing contained in this
Indenture or in any of the
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Debentures shall prevent any consolidation or merger of the Company with or into
any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company as an entirety, to any other
corporation (whether or not affiliated with the Company) authorized to acquire
and operate the same and which shall be organized under the laws of a State of
the United States or the District of Columbia; provided, however, and the
Company hereby covenants and agrees, that upon any such consolidation, merger,
sale, conveyance or lease, the due and punctual payment of the principal of an
premium, if any, and interest on all of the Debentures, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company, shall
be expressly assumed, by supplemental indenture satisfactory in form to the
Trustee, executed and delivered to the Trustee by the corporation (if other than
the Company) formed by such consolidation, or into which the Company shall have
been merged, or by the corporation which shall have acquired or leased such
property.
In the event of any such sale or conveyance, but not any such
lease, the Company or any successor corporation which shall theretofore have
become such in the manner described in this Article shall be discharged from all
obligations and covenants under this Indenture and the Debentures and may be
liquidated and dissolved.
SECTION 12.02. Successor Corporation to Be Substituted. In
case of any such consolidation, merger, sale, conveyance or lease and upon the
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Preston Corporation any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the trustee; and upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Debentures which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Debentures
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Debentures so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution
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hereof. In the event of any such consolidation, merger, sale, conveyance or
lease, the person named as the "Company" in the first paragraph of this
Indenture or any successor which shall thereafter have become such in the manner
prescribed in this Article Twelve may be dissolved, wound up and liquidated at
any time thereafter and such person shall be released from its liabilities as
obligor and maker of the Debentures and from its obligations under this
Indenture.
In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form (but not in substance) may be made
in the Debentures there-after to be issued as may be appropriate.
SECTION 12.03. Opinion of Counsel To Be Given Trustee. The
Trustee, subject to Sections 8.01 and 8.02, may receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance or lease and any such assumption complies with the
provisions of this Article Twelve.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture. When (a) the Company
shall deliver to the Trustee for cancellation all Debentures theretofore
authenticated (other than any Debentures which shall have been destroyed, lost
or stolen and in lieu of or in substitution for which other Debentures shall
have been authenticated and delivered) and not theretofore cancelled, or (b) all
the Debentures not theretofore cancelled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption all of the Debentures (other
than any Debentures which shall have been mutilated, destroyed, lost or stolen
and in lieu of or in substitution for which other Debentures shall have been
authenticated and delivered) not theretofore cancelled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of, and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and
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(iii) the rights, obligations and immunities of the Trustee hereunder), and the
Trustee, on demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel as required by Section 16.05 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture, the Company, however, hereby agreeing to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee in connection with this Indenture or the Debentures.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 8.06 shall survive.
SECTION 13.02. Deposited Monies To Be Held in Trust by
Trustee. Subject to Article 4 and Section 13.04, all monies deposited with the
Trustee pursuant to Section 13.01 shall be held in trust and applied by it to
the payment, notwithstanding the provisions of Article Four, either directly or
through any paying agent (including the Company if acting as its own paying
agent) to the holders of the particular Debentures for the payment or redemption
of which such monies have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest and premium, if any. The
obligations of the Company under Section 8.06 shall survive the satisfaction and
discharge of the Indenture.
SECTION 13.03. Paying Agent To Repay Monies Held. Upon the
satisfaction and discharge oft this Indenture, all monies then held by any
paying agent of the Debentures (other than the Trustee) shall, upon demand of
the Company, be repaid to it or paid to the Trustee, and thereupon such paying
agent shall be released from all further liability with respect to such monies.
SECTION 13.04. Return of Unclaimed Monies. Any monies
deposited with or paid to the Trustee for payment of the principal of, premium,
if any, or interest on Debentures and not applied but remaining unclaimed by the
holders of Debentures for two years after the date upon which the principal of,
premium, if any, or interest on such Debentures, as the case may be, shall have
become due and payable, shall be repaid to the Company by the Trustee on demand
and all liability of the Trustee shall thereupon cease with respect to such
monies; provided however that the Trustee before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper of general circulation in each place of payment, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money than remaining will be repaid to the Company. After such
repayment to the Company, the holder of any of the Debentures shall thereafter
look only to the Company for any payment which such holder may be entitled to
collect.
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ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Debentures Solely Corporate
Obligations. No recourse for the payment of the principal of or premium, if any,
or interest on any Debenture, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debentures.
ARTICLE FIFTEEN
CONVERSION OF DEBENTURES
SECTION 15.01. Right to Convert. Subject to and upon
compliance with the provisions of this Article, the holder of any Debenture
shall have the right, at his option, at any time prior to the close of business
on May 1, 2011 (except that, with respect to any Debenture or portion of a
Debenture which shall be called for redemption, such right shall terminate,
except as provided in the third paragraph of Section 15.02, at the close of
business on the date fixed for redemption of such Debenture or portion of a
Debenture unless the Company shall default in payment due upon redemption
thereof) to convert the principal amount of any such Debenture, or any portion
of such principal which is $1,000 or an integral multiple thereof, into that
number of fully paid and non-assessable shares of Common Stock (as such shares
shall then be constituted) obtained by dividing the principal amount of the
Debenture or portion thereof surrendered for conversion by the conversion price,
by surrender of the Debenture so to be converted in whole or in part in the
manner provided in Section 15.02.
SECTION 15.02. Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege, the holder of any Debenture to be converted
in whole or in part shall
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surrender such Debenture at an office or agency maintained by the Company
pursuant to Section 5.02, accompanied by the funds, if any, required by the last
paragraph of this Section or any other Provision of this Indenture, and shall
give written notice of conversion in the form provided on the Debentures (or
such other notice which is acceptable to the Company) to the Company at such
office or agency that the holder elects to convert such Debenture or the portion
thereof specified in said notice. Such notice shall also state the name or names
(with address and taxpayer identification number) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 15.07. Each Debenture surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Debenture, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company and
the trustee duly executed by, the holder or his duly authorized attorney.
As promptly as practicable after the surrender of such
Debenture and the receipt of such notice and funds, if any, as aforesaid, the
Company shall issue and shall deliver at such office or agency to such holder,
or on his written order, a certificate or certificates for the number of full
shares issuable upon the conversion of such Debenture or portion thereof in
accordance with the provisions of this Article and a check or cash in respect of
any fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 15.03. In case any Debenture of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.03, the Company shall execute and the Trustee shall
authenticate and deliver to or upon the written order of the holder of the
Debenture so surrendered, without charge to him, a new Debenture or Debentures
in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected on the
date on which such Debenture shall have been surrendered (accompanied by the
funds, if any, required by the last Paragraph of this Section or any other
provision of this Indenture) and such notice shall have been duly completed by
the holder and received by the Company at its office or agency maintained
pursuant to Section 5.02, as aforesaid, and the person in whose name any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on said date the holder of record
of the shares represented thereby; provided, however, that any such surrender on
any date when the stock transfer books of the Company shall be closed shall
constitute the person or persons in whose name the certificates are to be issued
as the record holder thereof for all purposes an the next succeeding day on
which such stock transfer books are open, but such conversion shall be at the
conversion price in effect on the date upon which such Debenture shall have been
surrendered as aforesaid.
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Any Debenture or portion thereof surrendered for conversion
during the period from the close of business on the record date for any interest
payment date to the opening of business on such interest payment date shall
(unless such Debenture or portion thereof being converted shall have been called
for redemption on a date in such period) be accompanied by payment, in funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided,
however, that no such payment need be made if there shall exist at the time of
conversion a default in the payment of interest on the Debentures. An amount
equal to such payment shall be paid by the Company on such interest payment date
to the holder of such Debenture at the close of business on such record date;
provided, however, that if the Company shall default in the payment of interest
on such interest payment date, such amount shall be paid to the person who made
such required payment. Except as provided above in this Section, no adjustment
shall be made for interest accrued on any Debenture converted or for dividends
on any shares issued upon the conversion of such Debenture as provided in this
Article.
SECTION 15.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Debentures. If more than one Debenture shall be
surrendered for conversion at one time by the same holder, the number of: full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Debentures (or specified portions thereof
to the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment therefor in cash at the current market value
thereof. The market value of a share of Common Stock shall be the last reported
sales price on the first day (which is not a Legal Holiday as defined in Section
16.06) immediately preceding the day on which the Debentures (or specified
portions thereof) are deemed to have been converted and such last reported sales
price shall be determined as provided in subsection (d) of Section 15.05. When
any payment is required, the Company shall give the Trustee and any conversion
agent a written notification of the last reported sales price used to determine
the amount of such payment and the Trustee and any conversion agent shall be
entitled to rely on such notification.
SECTION 15.04. Conversion Price. The conversion price shall be
as specified in the form of Debenture hereinabove set forth, subject to
adjustment as provided in this Article.
SECTION 15.05. Adjustment of Conversion Price. The conversion
price shall be adjusted from time to time as follows:
(a) In case the Company shall (i) pay a dividend or make a
distribution in shares of its Common Stock, (ii) subdivide its
outstanding Common Stock into a
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greater number of shares, or (iii) combine its outstanding Common Stock
into a smaller number of shares, the conversion price in effect
immediately prior thereto shall be adjusted so that the holder of any
Debenture thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock of the Company which he
would have owned or have been entitled to receive after the happening
of any of the events described above had such Debenture been converted
immediately prior to the happening of such event. An adjustment made
pursuant to this subsection (a) shall become effective immediately
after the record date in the case of a dividend and shall become
effective immediately after the effective date in the case of
subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
holders of its Common Stock entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for
or purchase Common Stock at a price per share less than the current
market price per share of Common Stock (as defined in subsection (d)
below) at the record date for the determination of stockholders
entitled to receive such rights or warrants, the conversion price in
effect immediately prior thereto shall be adjusted so that the same
shall equal the price determined by multiplying the conversion price in
effect immediately prior to the date of issuance of such rights or
warrants by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate
offering price of the total number of shares so offered would purchase
at such current market price, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common
Stock offered for subscription or purchase. Such adjustment shall be
made successively whenever any such rights or warrants are issued, and
shall become effective immediately after such record date. In
determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such
current market price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the
value of such consideration, if other than cash, to be determined by
the Board of Directors.
(c) In case the Company shall distribute to all holders of its
Common Stock any shares of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding
cash-dividends or distributions paid from retained earnings of the
Company) of rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in subsection (b) above), then
in each such case the conversion price shall be adjusted so that the
same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the date of
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such distribution by a fraction of which the numerator shall be the
current market price per share (as defined in subsection (d) below) of
the Common Stock on the record date mentioned below less the then fair
market value (as determined by the Board of Directors of the Company,
whose determination shall be conclusive, and-described in a certificate
filed with the Trustee) of the portion of the capital stock or assets
or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock, and the denominator
shall be the current market price per share (as defined in subsection
(d) below) of the Common Stock. Such adjustment shall become effective
immediately after the record date for the determination of shareholders
entitled to receive such distribution.
(d) For the purpose of any computation under subsections (b)
and (c) above, the current market price per share of Common Stock at
any date shall be deemed to be the average of the last reported sales
prices for the twenty consecutive days (which are Trading Days as
defined below) next preceding the day in question. The last reported
sales price for each day shall be (i) the last reported sales price of
Common Stock on the National Market of the National Association of
Securities Dealers, Inc., Automated Quotation System, or any similar
system of automated dissemination of quotations of securities prices
then in common use, if so quoted, or (ii) if not quoted as described in
clause (i), the mean between the high bid and low asked quotations for
Common Stock as reported by the National Quotation Bureau Incorporated
if at least two securities dealers have inserted both bid and asked
quotations for such class of stock on at least 5 of the 10 preceding
days, or (iii) if the Common Stock is listed or admitted or trading on
any national securities exchange, the last sale price, or the closing
bid price if no sale occurred, of such class of stock on the principal
securities exchange on which such class of stock is listed. If the
Common Stock is quoted on a national securities or central market
system, in lieu of a market or quotation system described above, the
last reported sales price shall be determined in the manner set forth
in clause (ii) of the preceding sentence if bid and asked quotations
are reported but actual transactions are not, and in the manner set
forth clause (iii) of the preceding sentence if actual transactions are
reported. If none of the conditions set forth above is met, the last
reported sales price of Common Stock on any day or the average of such
last reported sales prices for any period shall be the fair market
value of such class of stock as determined by a member firm of the New
York Stock Exchange, Inc. selected by the Company. As used herein the
term "Trading Days" with respect to Common Stock means (i) if the
Common Stock is quoted on the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation System or
any similar system of automated dissemination of quotations of
securities prices, days on which trades may be made on such system or
(ii) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities
exchange is open for business.
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(e) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which
by reason of this subsection (e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Article Fifteen shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case
may be. Anything in this Section 15.05 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the conversion
price, in addition to those required by this Section 15.05, as it in
its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase
stock or securities, or a distribution of securities convertible into
or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
(f) Whenever the conversion price is adjusted, as herein
provided, the Company shall promptly file with the Trustee and any
conversion agent other than the Trustee an Officers' Certificate.
setting forth the conversion price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
Promptly after delivering of such certificate, the Company shall
prepare a notice of such adjustment of the conversion price setting
forth the adjusted conversion price and the date on which such
adjustment becomes effective and shall mail such notice of such
adjustment of the conversion price to the holder of each Debenture at
his last address appearing on the Debenture register provided !or in
Section 2.05 of this Indenture.
(g) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after a record date for
an event, the Company may defer until the occurrence of such event (i)
issuing to the holder of an Debenture converted after such record date
and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (ii) paying
to such holder any amount in cash in lieu of any fraction pursuant to
Section 15.03.
SECTION 15.06. Effect of Reclassification, Consolidation,
Merger, Share Exchange or Sale. If any of the following events occur, namely (i)
any reclassification or change of outstanding shares of Common Stock issuable
upon conversion of the Debentures (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination), (ii) any consolidation or merger of the Company
with another corporation shall be effected as a result of which holders of
Common Stock issuable upon conversion of the Debentures shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock or (iii) any sale or conveyance
of the properties and assets of the Company as,
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or substantially as, an entirety to any other corporation, then the Company or
such successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall conform to the Trust Indenture
Act of 1939 as in force at the date of execution of such supplemental indenture)
providing that each Debenture shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Debentures immediately prior to such reclassification,
change, consolidation, merger, sale or conveyance. Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The Company shall
cause notice of the execution of such supplemental indenture to be mailed to
each holder of Debentures, at his address appearing on the Debenture register
provided for in Section 2.05 of this Indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers and sales.
SECTION 15.07. Taxes on Shares Issued. The issue of stock
certificates on conversions of Debentures shall be made without charge to the
converting Debentureholder for any tax in respect of the issue thereof. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of stock in any name
other than that of the holder of any Debenture converted, and the Company shall
not be required to issue, deliver or cause to be delivered any such stock
certificate unless and until the person or persons requesting the issue thereof
shall have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.
SECTION 15.08. Reservation of Shares; Shares To Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares, or out of shares held in its treasury, sufficient shares to provide for
the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment
reducing the conversion price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Debentures, the Company will take
all corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common Stock
at such adjusted conversion price.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Debentures will upon issue be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
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The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any Federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
The Company further covenants that if at any time the Common
Stock shall be listed on the New York Stock Exchange or any other national
securities exchange the Company will, if permitted by the rules of such
exchange, list and keep listed so long as the Common Stock shall be so listed on
such exchange, all Common Stock issuable upon conversion of the Debentures.
SECTION 15.09. Responsibility of Trustee. Neither the Trustee
nor any conversion agent shall at any time be under any duty or responsibility
to any holder of Debentures to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature or
extent of any such adjustment when made, or with respect to the method employed,
or herein or in any supplemental indenture provided to be employed, in making
the same. Neither the Trustee nor any conversion agent shall be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Debenture; and neither the Trustee nor any
conversion agent makes any representation with respect thereto. Neither the
Trustee nor any conversion agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or cash upon the surrender of any
Debenture for the purpose of conversion or to comply with any of the covenants
of the Company contained in this Article.
SECTION 15.10. Notice to Holders Prior to Certain Actions. In
case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out or retained
earnings); or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any
share of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or
from no par value to par value) or, of any consolidation, merger or
statutory share exchange to which the Company is a party and for which
approval of any shareholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company as
an entirety; or
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(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
the Company shall cause to be filed with the Trustee and to be
mailed to each holder of Debentures at his address appearing on the Debenture
register, provided for in Section 2.05 of this Indenture, as promptly as
possible but in any event at least fifteen days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock or record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 16.01. Provisions Binding on Company's Successors. All
the covenants, stipulations, promises and agreements in this Indenture contained
by the Company shall bind its successors and assigns whether so expressed or
not.
SECTION 16.02. Official Acts by Successor Corporation. Any act
or proceeding by any provision of this Indenture authorized or required to be
done or performed by any board, committee or office of the Company shall and may
be done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.03. Addresses for Notices, etc. Any notice or
demand which by any provision of this Indenture is required or permitted to be
given or served by the Trustee by the holders of Debentures on the Company may
be given or served by being deposited postage prepaid by registered or certified
mail in a post office letter box addressed (until another address is filed by
the Company with the Trustee) to Preston Corporation, 000 Xxxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Vice President-Finance. Any notice,
direction, request or demand to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at the
principal corporate trust office of
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the Trustee, Manufacturers Hanover Trust Company, 000 Xxxxx Xxxxxx, Xxx Xxxx,
X.X. 00000.
SECTION 16.04. Governing Law. This Indenture and each
Debenture shall be deemed to be a contract made under the laws of New York, and
for all purposes shall be construed in accordance with the laws of New York.
SECTION 16.05. Evidence of Compliance with Conditions
Precedent; Certificates to Trustee. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion 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 (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any Officer's Certificate may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by,
counsel, unless an officer signing it knows or in the exercise of reasonable
prudence should know that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the
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possession of the Company, unless such counsel knows or in the exercise of
reasonable prudence should know that the certificate or opinion or
representations with respect to such matters are erroneous.
Any Officer's Certificate or any Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate,
statement or opinion of an accountant or firm of accountants, unless such
officer or counsel, as the case may be, knows or in the exercise of reasonable
prudence should know that the certificate, statement or opinion with respect to
the accounting matters upon which his certificate or opinion is based is
erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 16.06. Legal Holidays. In any case where the date of
maturity of interest on or principal of the Debentures or the date fixed for
redemption of any Debenture will be a Saturday, a Sunday or a day on which
banking institutions and trust companies in New York, New York, or Baltimore,
Maryland, are authorized by law or executive order to close or a legal holiday
("Legal Holidays"), then payment of such interest on or principal of the
Debentures need not be made on such date but may be made on the next succeeding
day not a Legal Holiday with the same force and effect as if made on the date of
maturity or the date fixed for redemption and no interest shall accrue for the
period from and after such date.
SECTION 16.07. Trust Indenture Act to Control. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture which is required to be included in
this Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, such required provision shall control.
SECTION 16.08. No Security Interest Created. Nothing in this
Indenture or in the Debentures, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction
where property of the Company or its Subsidiaries is located.
SECTION 16.09. Benefits of Indenture. Nothing in this
Indenture or in the Debentures, express or implied, shall give to any person,
other than the parties hereto, any paying agent, any conversion agent, any
Debenture registrar and their successors hereunder, the holders of Debentures
and the holders of Senior Indebtedness, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 16.10. Table of Contents, Headings, etc. The table of
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for
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convenience or reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions hereof.
SECTION 16.11. Execution in Counterparts. This Indenture may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same instrument.
SECTION 16.12. Separability Clause. In case any provisions in
this Indenture or in the Debentures 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.
MANUFACTURERS HANOVER TRUST COMPANY, hereby accepts the trusts
in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
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IN WITNESS WHEREOF, Preston Corporation has caused this
Indenture to be signed and acknowledged by the Chairman of its Board of
Directors or by its President or one of its Senior Vice Presidents or Vice
Presidents. and the same to be attested by its Secretary or by an Assistant
Secretary and Manufacturers Hanover Trust Company has caused this Indenture to
be signed and acknowledged by one of its Vice Presidents, and has caused its
corporate seal to be affixed hereunto and the same to be attested by one of its
Vice Presidents or Trust Officers, as of the day and year first written above.
PRESTON CORPORATION
By:
---------------------------------
Vice President
Attest:
--------------------------------
Secretary
[Seal]
MANUFACTURERS HANOVER TRUST
COMPANY, as Trustee
By:
---------------------------------
Vice President
Attest:
--------------------------------
Trust Officer
[Seal]
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STATE OF )
) ss.:
COUNTY OF )
On the ____ day of April, 1986, before me personally came J.
Xxxx Xxxxxxxx, to me known, who, being by me duly sworn did depose and say that
he resides on Xxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx; that he is Vice President of
Preston Corporation, a corporation described in and which executed the above
instrument; and that the same is his free act and deed individually and as such
officer and the free act and deed of such corporation; and that he signed his
name thereto by the authority of the Board of Directors of said corporation
--------------------------------
Notary Public
My Commission Expires
[NOTARIAL SEAL]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 2nd of May, 1986, before me personally came Xxxx X.
Generale, to me known, who, being by me duly sworn did depose and say that he
resides at 000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx; that he is a Vice President of
Manufacturers Hanover Trust Company, an association described in and which
executed the above instrument; that he knows the seal of said association; that
the seal affixed to the said instrument is the seal of said association; that it
was so affixed by authority of the Board of Directors of said association; and
that he signed his name thereto by like authority.
--------------------------------
Notary Public
My Commission Expires
[NOTARIAL SEAL]
-00-
XXXXX XX XXXXXXXX )
) ss.:
COUNTY OF XXXXXXXX )
On the 30th day of April, 1986, before me personally came J.
Xxxx Xxxxxxxx, to me known, who, being by me duly sworn did depose and say that
he resides on Xxxxxxxxx Xxxx, Xxxxxx Xxxxxxxx; that he is Vice President of
Preston Corporation, a corporation described in and which executed the above
instrument; and that the same is his free act and deed individually and as such
officer and the free act and deed of such corporation; and that he signed his
name thereto by the authority of the Board of Directors of said corporation.
--------------------------------
Notary Public
My Commission Expires
[NOTARIAL SEAL]
STATE OF )
) ss.:
COUNTY OF )
On the ____ of April, 1986, before me personally came Xxxx X.
Generale, to be known, who, being by me duly sworn did depose and say that he
resides at 000 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxx; that he is a Vice President of
Manufacturers Hanover Trust Company, an association described in and which
executed the above instrument; that he knows the seal of said association; that
the seal affixed to the said instrument is the seal of said association; that it
was so affixed by authority of the Board of Directors of said association; and
that he signed his name thereto by like authority.
--------------------------------
Notary Public
My Commission Expires
[NOTARIAL SEAL]
