EXHIBIT 4(b)
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STERLING SOFTWARE, INC.
5 3/4% Convertible Subordinated Debentures
due 2003
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INDENTURE
Dated as of February 2, 1993
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BANK OF AMERICA TEXAS, NATIONAL ASSOCIATION
TRUSTEE
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TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE.................... 1
SECTION 1.1 Definitions.......................................... 1
SECTION 1.2 Other Definitions.................................... 4
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.... 5
SECTION 1.4 Rules of Construction................................ 6
ARTICLE 2.
THE SECURITIES...................... 6
SECTION 2.1 Form and Dating...................................... 6
SECTION 2.2 Execution and Authentication......................... 6
SECTION 2.3 Registrar, Paying Agent and Conversion Agent......... 7
SECTION 2.4 Paying Agent to Hold Money in Trust.................. 8
SECTION 2.5 Securityholder Lists................................. 8
SECTION 2.6 Transfer and Exchange................................ 8
SECTION 2.7 Replacement Securities............................... 9
SECTION 2.8 Outstanding Securities............................... 10
SECTION 2.9 Treasury Securities.................................. 10
SECTION 2.10 Temporary Securities................................. 11
SECTION 2.11 Cancellation......................................... 11
ARTICLE 3.
REDEMPTION AND PURCHASES............................. 11
SECTION 3.1 Right to Redeem; Notice to Trustee................... 11
SECTION 3.2 Selection of Securities to be Redeemed............... 12
SECTION 3.3 Notice of Redemption................................. 12
SECTION 3.4 Effect of Notice of Redemption....................... 13
SECTION 3.5 Deposit of Redemption Price.......................... 13
SECTION 3.6 Securities Redeemed in Part.......................... 13
SECTION 3.7 Redemption of Securities at Option of the Holder
Upon Change in Control............................... 14
SECTION 3.8 Effect of Change in Control Purchase Notice.......... 17
SECTION 3.9 Deposit of Change in Control Purchase Price.......... 18
SECTION 3.10 Securities Purchased in Part......................... 19
SECTION 3.11 Compliance with Securities Laws upon
Purchase of Securities............................... 19
SECTION 3.12 Repayment to the Company............................. 19
(i)
ARTICLE 4.
CONVERSION......................... 19
SECTION 4.1 Conversion Privilege................................. 19
SECTION 4.2 Conversion Procedure................................. 20
SECTION 4.3 Fractional Shares.................................... 21
SECTION 4.4 Taxes on Conversion.................................. 22
SECTION 4.5 Company to Provide Stock............................. 22
SECTION 4.6 Adjustment of Conversion Price....................... 22
SECTION 4.7 No Adjustment........................................ 26
SECTION 4.8 Equivalent Adjustments............................... 26
SECTION 4.9 Adjustment for Tax Purposes.......................... 26
SECTION 4.10 Notice of Adjustment................................. 27
SECTION 4.11 Notice of Certain Transactions....................... 27
SECTION 4.12 Effect of Reclassification,
Consolidation, Merger or Sale on
Conversion Privilege................................. 27
SECTION 4.13 Trustee's Disclaimer................................. 28
SECTION 4.14 Voluntary Reduction.................................. 29
ARTICLE 5.
SUBORDINATION..................... 29
SECTION 5.1 Securities Subordinated to Senior Indebtedness....... 29
SECTION 5.2 Securities Subordinated to Prior Payment
of All Senior Indebtedness on
Dissolution, Liquidation, Reorganization,
etc., of the Company................................. 29
SECTION 5.3 Securityholders to be Subrogated to Right
of Holders of Senior Indebtedness.................... 32
SECTION 5.4 Obligations of the Company
Unconditional........................................ 32
SECTION 5.5 Company Not to Make Payment with Respect
to Securities in Certain Circumstances............... 33
SECTION 5.6 Notice to Trustee.................................... 34
SECTION 5.7 Application by Trustee of Monies
Deposited with it.................................... 35
SECTION 5.8 Subordination Rights Not Impaired by Acts
or Omissions of Company or Holders of
Senior Indebtedness.................................. 35
SECTION 5.9 Trustee to Effectuate Subordination.................. 36
SECTION 5.10 Right of Trustee to Hold Senior
Indebtedness......................................... 36
SECTION 5.11 Article 5 Not to Prevent Events of
Default.............................................. 36
SECTION 5.12 No Fiduciary Duty Created to Holders of
Senior Indebtedness.................................. 36
SECTION 5.13 Article Applicable to Paying Agents.................. 36
(ii)
ARTICLE 6.
COVENANTS........................ 37
SECTION 6.1 Payment of Securities................................ 37
SECTION 6.2 SEC Reports.......................................... 37
SECTION 6.3 Liquidation.......................................... 38
SECTION 6.4 Compliance Certificates.............................. 39
SECTION 6.5 Notice of Defaults................................... 39
SECTION 6.6 Payment of Taxes and Other Claims.................... 39
SECTION 6.7 Corporate Existence.................................. 39
SECTION 6.8 Maintenance of Properties............................ 40
SECTION 6.9 Further Instruments and Acts......................... 40
ARTICLE 7.
SUCCESSOR CORPORATION.............................. 40
SECTION 7.1 When Company May Merge, etc.......................... 40
SECTION 7.2 Successor Corporation Substituted.................... 41
ARTICLE 8.
DEFAULT AND REMEDIES............................... 41
SECTION 8.1 Events of Default.................................... 41
SECTION 8.2 Acceleration......................................... 43
SECTION 8.3 Other Remedies....................................... 44
SECTION 8.4 Waiver of Defaults and Events of Default............. 44
SECTION 8.5 Control by Majority.................................. 45
SECTION 8.6 Limitation on Suits.................................. 45
SECTION 8.7 Rights of Holders to Receive Payment................. 45
SECTION 8.8 Collection Suit by Trustee........................... 46
SECTION 8.9 Trustee may File Proofs of Claim..................... 46
SECTION 8.10 Priorities........................................... 47
SECTION 8.11 Undertaking for Costs................................ 47
SECTION 8.12 Waiver of Usury, Stay or Extension Laws.............. 47
ARTICLE 9.
TRUSTEE......................... 48
SECTION 9.1 Duties of Trustee.................................... 48
SECTION 9.2 Rights of Trustee.................................... 49
SECTION 9.3 Individual Rights of Trustee......................... 49
SECTION 9.4 Trustee's Disclaimer................................. 49
SECTION 9.5 Notice of Default of Events of Default............... 50
SECTION 9.6 Reports by Trustee to Holders........................ 50
SECTION 9.7 Compensation and Indemnity........................... 50
SECTION 9.8 Replacement of Trustee............................... 51
SECTION 9.9 Successor Trustee by Merger, etc..................... 52
SECTION 9.10 Eligibility; Disqualification........................ 52
(iii)
SECTION 9.11 Preferential Collection of Claims Against Company..... 52
ARTICLE 10.
SATISFACTION AND DISCHARGE OF INDENTURE..................... 53
SECTION 10.1 Termination of Company's Obligations................. 53
SECTION 10.2 Application of Trust Money........................... 54
SECTION 10.3 Repayment to Company................................. 54
SECTION 10.4 Reinstatement........................................ 54
ARTICLE 11.
AMENDMENTS, SUPPLEMENTS AND WAIVERS......................... 55
SECTION 11.1 Without Consent of Holders........................... 55
SECTION 11.2 With Consent of Holders.............................. 55
SECTION 11.3 Compliance with Trust Indenture Act.................. 56
SECTION 11.4 Revocation and Effect of Consents.................... 56
SECTION 11.5 Notation On or Exchange of Securities................ 57
SECTION 11.6 Trustee to Sign Amendments, etc...................... 57
ARTICLE 12.
MISCELLANEOUS...................... 57
SECTION 12.1 Trust Indenture Act Controls......................... 57
SECTION 12.2 Notices.............................................. 57
SECTION 12.3 Communications by Holders with Other Holders......... 58
SECTION 12.4 Certificate and Opinion as to Conditions Precedent... 58
SECTION 12.5 Record Date for Vote or Consent of Securityholders... 59
SECTION 12.6 Rules by Trustee, Paying Agent, Registrar,
Conversion Agent..................................... 59
SECTION 12.7 Legal Holidays....................................... 59
SECTION 12.8 Governing Law........................................ 60
SECTION 12.9 No Adverse Interpretation of Other Agreements........ 60
SECTION 12.10 No Recourse Against Others........................... 60
SECTION 12.11 Successors........................................... 60
SECTION 12.12 Multiple Counterparts................................ 60
SECTION 12.13 Separability......................................... 60
SECTION 12.14 Table of Contents, Headings, etc..................... 60
EXHIBIT A Form of Debenture.................................... A-1
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* This Table of Contents shall not, for any purpose, be deemed to be a part of
this Indenture.
(iv)
CROSS-REFERENCE TABLE
Indenture
TIA Section Section
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(S) 310(a)(1)...................................................... 9.10
(a)(2)...................................................... 9.10
(a)(3)...................................................... N.A.**
(a)(4)...................................................... N.A.
(a)(5)...................................................... 9.10
(b)......................................................... 9.8;9.10
(c)......................................................... N.A.
(S) 311(a)......................................................... 9.11
(b)......................................................... 9.11
(c)......................................................... N.A.
(S) 312(a)......................................................... 2.5
(b)......................................................... 12.3
(c)......................................................... 12.3
(S) 313(a)......................................................... 9.6
(b)(1)...................................................... N.A.
(b)(2)...................................................... 9.6
(c)......................................................... 9.6;12.2
(d)......................................................... 9.6
(S) 314(a)......................................................... 6.2; 6.4;
12.2
(b)......................................................... N.A.
(c)(1)...................................................... 12.4(a)
(c)(2)...................................................... 12.4(a)
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e)......................................................... 12.4(b)
(f)......................................................... N.A.
(S) 315(a)......................................................... 9.1(b)
(b)......................................................... 9.5;12.2
(c)......................................................... 9.1(a)
(d)......................................................... 9.1(c)
(e)......................................................... 8.11
(S) 316(a) (last sentence)......................................... 2.8
(a)(1)(A)................................................... 8.5
(a)(1)(B)................................................... 8.4
(a)(2)...................................................... N.A.
(b)......................................................... 8.7
(c)......................................................... 12.5
(S) 317(a)(1)...................................................... 8.8
(a)(2)...................................................... 8.9
(b)......................................................... 2.4
(S) 318(a)......................................................... 12.1
* This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture
** N.A. means Not Applicable.
(v)
INDENTURE dated as of February 2, 1993, between STERLING SOFTWARE, INC., a
Delaware corporation (the "Company"), and BANK OF AMERICA TEXAS, NATIONAL
ASSOCIATION, as Trustee (the "Trustee").
Both parties agree as follows for the benefit of the other and for the
equal and ratable benefit of the registered holders of the Company's 5 3/4%
Convertible Subordinated Debentures due 2003.
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
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"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meaning correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the date of this Indenture.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
"Capitalized Lease Obligation" means indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles and the
amount of such indebtedness shall be the capitalized amount of such obligations
determined in accordance with such principles.
"Cash" or "cash" means such coin or currency of the United States as at any
time of payment is legal tender for the payment of public and private debts.
"Common Stock" means the common stock of the Company, par value $0.10 per
share, as it exists on the date of this Indenture or as it may be constituted
from time to time.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor.
"Default" or "default" means any event which is, or after notice or passage
of time, or both, would be, an Event of Default.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time to
time pursuant to the terms of this Indenture.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or Assistant Secretary of the Company;
provided, however, that for purposes of Section 6.4, "Officers' Certificate"
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means a certificate signed by the principal executive officer, principal
financial officer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Person" or "person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, or any other entity or
organization, including a government or political subdivision or instrumentality
thereof.
"Principal" or "principal" of a debt security, including Securities, means
the principal of the security plus, when appropriate, the premium, if any, on
the security.
"Redemption Date" or "redemption date" when used with respect to any
Security to be redeemed, means the date fixed for such redemption pursuant to
this Indenture.
"Redemption Price" or "redemption price", when used with respect to any
Security to be redeemed, means the price fixed for such redemption pursuant to
this Indenture, as set forth in the form of Security annexed as Exhibit A
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hereto.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities" means the 5 3/4% Convertible Subordinated Debentures due 2003
or any of them (each a "Security"), as amended or
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supplemented from time to time, that are issued under this Indenture.
"Senior Indebtedness" means the following: (a) the principal of and
premium, if any, and interest (including, without limitation, any interest
accruing subsequent to the filing of a petition or other action concerning
bankruptcy or other similar proceedings, whether or not constituting an allowed
claim in any such proceedings) on, and fees, costs, enforcement expenses
(including legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations in respect of, the following,
whether presently outstanding or hereafter incurred or created: all
indebtedness or obligations of the Company to any person, including but not
limited to banks and other lending institutions, for money borrowed (other than
that evidenced by the Securities) or in respect of credit or other banking
facilities and which is evidenced by a note, bond, debenture, loan agreement or
similar instrument or agreement (including purchase money obligations with an
original maturity in excess of one year and noncontingent obligations to
reimburse any bank or other person in respect of amounts paid under letters of
credit); (b) commitment or standby fees due and payable to lending institutions
with respect to credit facilities available to the Company; (c) all obligations
of the Company (i) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (ii) under interest rate
swaps, caps, collars, options and similar arrangements, and (iii) under any
foreign exchange contract, currency swap agreement, futures contract, currency
option contract, or other foreign currency hedge; (d) all obligations of the
Company for the payment of money relating to a Capitalized Lease Obligation; (e)
any liabilities of others described in the preceding clauses (a), (b), (c) and
(d) which the Company has guaranteed or which are otherwise its legal liability;
and (f) renewals, extensions, refundings, restructurings, amendments and
modifications of any such indebtedness or guarantee. Notwithstanding anything to
the contrary in this Indenture or the Securities, "Senior Indebtedness" shall
not include (w) any particular indebtedness, lease, fee, obligation, renewal,
extension, refunding, restructuring, amendment or modification if, under the
express provisions of the instrument creating or evidencing the same, or
pursuant to which the same is outstanding, such indebtedness, lease, fee or
obligation or such renewal, extension, refunding, restructuring, amendment or
modification thereof is stated to be not superior in right of payment to the
Securities, (x) indebtedness of the Company evidenced by the Company's 8%
Convertible Senior Subordinated Debentures (which indebtedness shall be deemed
to rank pari passu in right of payment with the Securities), (y) indebtedness of
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the Company (i) owing, directly or indirectly, to any person under or in respect
of any employee benefit plan of the Company or (ii) owing, directly or
indirectly, to any employee of the Company or any Affiliate of the Company, and
(z) the Securities.
-3-
"Subsidiary" means any corporation of which at least a majority of the
outstanding capital stock having voting power under ordinary circumstances to
elect directors of such corporation shall at the time be held, directly or
indirectly, by the Company, by the Company and one or more Subsidiaries, or by
one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 and as in effect on the date of this Indenture,
except as provided in Section 11.3 hereof, and except to the extent any
amendment to the Trust Indenture Act expressly provides for application of the
Trust Indenture Act as in effect on another date.
"Trading Day" or "trading day" means any day on which the New York Stock
Exchange is open for trading.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means the successor.
"Trust Officer" means any officer within the Corporation Trust Department
(or any similarly titled or successor group) of the Trustee, including without
limitation any Vice President, Assistant Vice President, any trust officer, any
Assistant Secretary or any other officer customarily performing functions
similar to those performed by any of the above-designated officers who shall, in
any case, be responsible for the administration of this Indenture or have
familiarity with it, and also means, with respect to a particular corporate
matter, any other officer of the Trustee to whom corporate trust matters are
referred because of his knowledge of and familiarity with the particular
subject.
SECTION 1.2 Other Definitions.
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Defined in
Term Section
---- ----------
"Bankruptcy Law" 8.1
"Change in Control" 3.7
"Change in Control Purchase Date" 3.7
"Change in Control Purchase Notice" 3.7
"Change in Control Purchase Price" 3.7
"Company Order" 2.2
"Conversion Agent" 2.3
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"Conversion Date"...................................... 4.2
"Conversion Price"..................................... 4.6
"Custodian"............................................ 8.1
"Default Notice"....................................... 5.5
"Determination Date"................................... 4.6
"Event of Default"..................................... 8.1
"Exchange Act"......................................... 3.7
"Legal Holiday"........................................ 12.7
"Material Subsidiary".................................. 8.1
"Paying Agent"......................................... 2.3
"Registrar"............................................ 2.3
"Unissued Shares"...................................... 3.7
"U.S. Government Obligations".......................... 10.1
SECTION 1.3 Incorporation by Reference of Trust Indenture Act.
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Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other terms used in this Indenture that are defined in the TIA, defined
by TIA reference to another statute or defined by SEC rule and not otherwise
defined herein have the meanings assigned to them therein.
-5-
SECTION 1.4 Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect
on the date hereof, and any other reference in this Indenture to "generally
accepted accounting principles" refers to generally accepted accounting
principles in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein", "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE 2.
THE SECURITIES
SECTION 2.1 Form and Dating.
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The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is incorporated in and made part
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of this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is subject
or usage. The Company shall approve, with the consent of the Trustee, the form
of the Securities and any notation, legend or endorsement on them. Each Security
shall be dated the date of its authentication.
SECTION 2.2 Execution and Authentication.
----------------------------
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
Typographic and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Security which has been authenticated and delivered by the Trustee.
-6-
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate and make available for delivery Securities
for original issue in the aggregate principal amount of up to $115,000,000 upon
a written order or orders of the Company signed by two Officers or by an Officer
and an Assistant Treasurer or Assistant Secretary of the Company (a "Company
Order"). The Company Order shall specify the amount of Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $115,000,000, except as provided in Section 2.7.
The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3 Registrar, Paying Agent and Conversion Agent.
--------------------------------------------
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Securities may be presented for payment (the "Paying
Agent"), an office or agency where Securities may be presented for conversion
(the "Conversion Agent") and an office or agency where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Registrar shall keep a register of the Securities and of their transfer and
exchange.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall notify the Trustee
of the name and address of any Agent not a party to this Indenture. If the
Company fails to maintain a Registrar, Paying Agent, Conversion Agent or agent
for service of notices and demands, or fails to give the
-7-
foregoing notice, the Trustee shall act as such. The Company or any Affiliate of
the Company may act as Paying Agent (except for the purposes of Section 6.1 and
Article 10), Registrar or Conversion Agent.
The Company initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands in connection with
the Securities.
SECTION 2.4 Paying Agent to Hold Money in Trust.
-----------------------------------
On or prior to each due date of the principal of or interest on any
Securities, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal or interest so becoming due. Subject to Section 5.7, the
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Securities, and shall notify the Trustee of any default by the
Company (or any other obligor on the Securities) in making any such Payment. If
the Company or an Affiliate of the Company acts as Paying Agent, it shall on or
before each due date of the principal of or interest on any Securities segregate
the money and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and the
Trustee may at any time during the continuance of any default, upon written
request to a Paying Agent, require such Paying Agent to forthwith pay to the
Trustee all sums so held in trust by such Paying Agent. Upon doing so, the
Paying Agent (other than the Company) shall have no further liability for the
money.
SECTION 2.5 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before each semi-annual interest payment date and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.6 Transfer and Exchange
---------------------
When a Security is presented to the Registrar with a request to register a
transfer thereof or to exchange such security for an equal principal amount of
Securities of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested; provided that every security
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registration
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of transfers and exchanges, upon surrender of any Security for registration of
transfer or exchange at the office or agency maintained pursuant to Section 2.3,
the Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. Any exchange or transfer shall be without charge, except
that the Company or the Registrar may require payment of a sum sufficient to
cover any tax assessment or other governmental charge that may be imposed in
relation thereto, and provided further that this sentence shall not apply to
any exchange pursuant to Section 2.10, 3.6, 3.10, 4.2 (last paragraph) or 11.5.
Neither the Company, the Registrar nor the Trustee shall be required to
exchange or register a transfer of (a) any Securities for a period of 15 days
next preceding any selection of Securities to be redeemed or (b) any
Securities or portions thereof selected or called for redemption, including
pursuant to Section 3.7 (except, in the case of redemption of a Security in
part, the portion not to be redeemed).
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture as the Securities surrendered upon such
exchange or transfer or exchange.
SECTION 2.7 Replacement Securities.
----------------------
If any mutilated Security is surrendered to the Company, the Registrar or
the Trustee, or the Company, the Registrar and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, and there
is delivered to the Company, the Registrar and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company, the Registrar or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute,
and upon its written request that Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and principal amount, bearing
a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be redeemed by the Company
pursuant to Article 3, the Company in its discretion may, instead of issuing a
new Security, pay or redeem such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee or the Registrar)
in connection therewith.
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Every new Security issued pursuant to this Section 2.7 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.8 Outstanding Securities.
----------------------
Securities outstanding at any time are all Securities authenticated by
the Trustee, except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the Company)
holds on a redemption date or maturity date money sufficient to pay the
principal of, premium, if any, and accrued interest on Securities payable on
that date, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
Subject to the restriction contained in Section 2.9, a Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.
SECTION 2.9 Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Securities and that the pledgee is not the Company or any
other obligor on the Securities or any Affiliate of the Company or of such other
obligor.
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SECTION 2.10 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may prepare
and execute, and, upon the order of the Company, the Trustee shall authenticate
and deliver temporary Securities. Temporary Securities shall be substantially in
the form of definitive Securities but may have variations that the Company with
the consent of the Trustee considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate and deliver definitive Securities in exchange for temporary
Securities.
SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee or its agent any Securities surrendered to them for
transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, redemption, payment, conversion or cancellation and
shall deliver the cancelled Securities to the Company. The Company may not issue
new Securities to replace Securities it has paid or delivered to the Trustee
for cancellation or that any Holder has converted pursuant to Article 4.
ARTICLE 3.
REDEMPTION AND PURCHASES
SECTION 3.1 Right to Redeem; Notice to Trustee.
----------------------------------
The Securities may not be redeemed at the option of the Company prior to
February 12, 1996. Thereafter, the Company may, at its option, redeem the
Securities, in whole or in part, at any time and form time to time, upon notice
as set forth below, and at the redemption prices set forth in paragraph 5 of the
form of Security attached hereto as Exhibit A, together with accrued interest up
---------
to, but not including, the Redemption Date.
If the Company elects to redeem Securities pursuant to paragraph 5 of the
Securities, it shall notify the Trustee at least 35 days prior to the redemption
date as fixed by the Company (unless a shorter notice shall be satisfactory to
the Trustee) of the redemption date and the principal amount of Securities to be
redeemed. If fewer than all of the Securities are to be redeemed, the record
date relating to such redemption shall be selected by the Company and given to
the Trustee, which record date shall not be less than ten days after the date of
notice to the Trustee.
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SECTION 3.2 Selection of Securities to be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed, the Trustee shall,
not more than 60 days prior to the redemption date, select the Securities to be
redeemed by lot or by a method the Trustee considers fair and appropriate;
provided that such method is not prohibited by any stock exchange or market on
which the Securities are then listed. The Trustee shall make the selection from
the Securities outstanding and not previously called for redemption. Securities
in denominations of $1,000 may only be redeemed in whole. The Trustee may select
for redemption portions (equal to $1,000 or any multiple thereof) of the
principal of Securities that have denominations larger than $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail or cause to be mailed a notice of redemption by first-class
mail to each Holder of Securities to be redeemed at such Holder's address as it
appears on the Registrar's books.
The notice shall identify the Securities to be redeemed and shall state:
(1) The redemption date;
(2) the redemption price;
(3) the then current Conversion Price;
(4) the name and address of the Paying Agent and the Conversion Agent;
(5) that Securities called for redemption must be presented and
surrendered to the Paying Agent to collect the redemption price;
(6) that the Securities called for redemption may be converted at any
time before the close of business on the fifth Business Day immediately
preceding the redemption date;
(7) that Holders who wish to convert Securities must satisfy the
requirements in paragraph 8 of the Securities;
(8) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption shall cease accruing
on and after the redemption date and the only remaining right of the Holder
shall be to receive
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payment of the redemption price upon presentation and surrender to the
Paying Agent of the Securities; and
(9) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon presentation and surrender of such Security, a new
Security or Securities in principal amount equal to the unredeemed portion
thereof will be issued.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.
SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice, except for Securities that are converted in accordance with the
provisions of Section 4.1 hereof. Upon presentation and surrender to the Paying
Agent, such Securities shall be paid at the redemption price, plus accrued
interest to the redemption date.
SECTION 3.5 Deposit of Redemption Price.
---------------------------
On or prior to the redemption date, the Company shall deposit with the
Paying Agent (or if the Company or an Affiliate of the Company acts as Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest on all Securities to be redeemed on that date,
other than Securities or portions thereof called for redemption on that date
which have been delivered by the Company to the Trustee for cancellation or have
been converted. The Paying Agent shall return to the Company any money not
required for that purpose because of the conversion of Securities pursuant to
Article 4 or otherwise. If such money is then held by the Company or an
Affiliate of the Company in trust and is not required for such purposes, it
shall be discharged from the trust.
SECTION 3.6 Securities Redeemed in Part.
---------------------------
Upon presentation and surrender of a Security that is redeemed in part, the
Company shall execute and the Trustee shall authenticate for and deliver to the
Holder a new Security equal in principal amount to the unredeemed portion of the
Security surrendered.
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SECTION 3.7 Redemption of Securities at Option of the Holder Upon Change in
---------------------------------------------------------------
Control.
-------
(a) if at any time that Securities remain outstanding there shall have
occurred a Change in Control (as hereinafter defined), Securities shall be
redeemed by the Company at the option of the Holder thereof, at a purchase price
(the "Change in Control Purchase Price") equal to the principal amount thereof
plus accrued interest up to and including the Change in Control Purchase Date,
as of the date that is 40 Business Days after the occurrence of the Change in
Control (the "Change in Control Purchase Date"), subject to satisfaction by or
on behalf of any Holder of the requirements set forth in subsection (c) of this
Section 3.7. Within ten days after any Change in Control requiring the Company
to deliver the notice to Holders provided for in subsection (b) of this Section
3.7, the Company shall so notify the Trustee.
A "Change in Control" shall be deemed to have occurred at such time after
the original issuance of the Securities as there shall occur:
(1) the acquisition by any person (including any syndicate or group
deemed to be a "person" under Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor provision to either of the foregoing) of
beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions,
of shares of capital stock of the Company entitling such person to
exercise 50% or more of the total voting power of all shares of
capital stock of the Company entitling the holders thereof to vote
generally in elections of directors; or
(2) any consolidation of the Company with, or merger of the Company
into, any other person, any merger of another person into the
Company, or any sale, lease or exchange of all or substantially
all of the property and assets of the Company to another person
(other than a merger (x) which does not result in any
reclassification, conversion, exchange or cancellation of
outstanding shares of capital stock of the Company or (y) which is
effected solely to change the jurisdiction of incorporation of the
Company and results in a reclassification, conversion or exchange
of outstanding shares of Common Stock into solely shares of common
stock);
provided, however, that a Change in Control shall not be deemed to have occurred
if (i) the closing price per share of the Common
-14-
Stock (as determined in accordance with the second sentence of Section 4.6(e)
hereof) for each of any five trading days within the period of ten consecutive
trading days ending immediately after the later of the Change in Control or the
public announcement of the Change in Control (in case of a Change in Control
under clause (1) above) or ending immediately before the Change in Control (in
the case of a Change in Control under clause (2) above) shall equal or exceed
105% of the Conversion Price of the Securities in effect on each such trading
day or (ii) if all of the consideration (excluding cash payments for fractional
shares) in the transaction or series of transactions constituting the Change in
Control consists of shares of common stock traded on a national securities
exchange or quoted on the NASDAQ National Market System and as a result of such
transaction or series of transactions the Securities become convertible solely
into such common stock (excluding cash payments for fractional shares) and the
closing price of the consideration paid or received for each share of Common
Stock shall equal or exceed 105% of the Conversion Price of the Securities for
each of any five trading days within the period of ten consecutive trading days
immediately following the closing date of such transaction or the last
transaction of such series of such transactions, as the case may be. The
determination of whether a sale, lease or exchange of all or substantially all
of the property and assets of the Company has occurred shall be governed by the
internal law of the State of Delaware. A "beneficial owner" shall be determined
in accordance with Rule 13d-3 promulgated by the Commission under the Exchange
Act, as in effect on the date of execution of this Indenture, except that, for
purposes of this subsection (a), the number of shares of capital stock of the
Company entitling the holders thereof to vote generally in elections of
directors shall be deemed to include, in addition to all outstanding shares of
capital stock of the Company entitling the holders thereof to vote generally in
the election of directors and Unissued Shares of the Person with respect to
which the Change in Control determination is being made, all Unissued Shares of
all other Persons. As used herein, "Unissued Shares" shall mean shares of
capital stock of the Company not outstanding that are subject to options,
warrants, rights to purchase or conversion privileges exercisable within 60 days
following the date of determination of a Change in Control and that, upon
issuance, shall entitle the holders thereof to vote generally in the election of
directors.
(b) Within ten Business Days after the occurrence of a Change in Control,
the Company shall mail a written notice of Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners as required by
applicable law) and shall cause a copy of such notice to be published in a daily
newspaper of national circulation. The notice shall include the form of a
Change in Control Purchase Notice (as defined below) to be completed by the
Holder and shall state:
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(1) the date of such Change in Control and, briefly, the events
causing such Change in Control;
(2) the date by which the Change in Control Purchase Notice
pursuant to this section 3.7 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) briefly, the conversion rights of the Securities;
(6) the name and address of the Paying Agent and the Conversion
Agent;
(7) the Conversion Price and any adjustments thereto;
(8) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock only to the
extent that the Change in Control Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(9) the procedures that the Holder must follow to exercise rights
under this Section 3.7;
(10) the procedures for withdrawing a Change in Control Purchase
Notice, including a form of notice of withdrawal; and
(11) that the Holder must satisfy the requirements set forth in the
Securities in order to convert the Securities.
(c) A Holder may exercise its rights specified in subsection (a) of this
Section 3.7, upon delivery of a written notice of the exercise of such rights (a
"Change in Control Purchase Notice") to the Paying Agent at any time prior to
the close of business on the Change in Control Purchase Date, stating:
(1) the certificate number of each Security that the Holder will
deliver to be purchased;
(2) the portion of the principal amount of each Security that the
Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the terms and
conditions specified in this Indenture.
-16-
The delivery of such Security to the Paying Agent (together with all
necessary endorsements) at the office of the Paying Agent shall be a condition
to the receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however, that such Change in Control Purchase Price shall be so paid
-------- -------
pursuant to this Section 3.7 only if the Security so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.7, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security pursuant to Sections 3.7 through 3.12
also apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.7(c) shall have the right to withdraw such Change in Control Purchase
Notice in whole or in a portion thereof that is $1,000 or in an integral
multiple thereof at any time prior to the close of business on the Change in
Control Purchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.8.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 3.8 Effect of Change in Control Purchase Notice.
-------------------------------------------
Upon receipt by the Paying Agent of the Change in Control Purchase Notice
specified in Section 3.7(c), the Holder of the Security in respect of which such
Change in Control Purchase Notice was given shall (unless such Change in Control
Purchase Notice is withdrawn as specified below) thereafter be entitled to
receive solely the Change in Control Purchase Price with respect to such
Security. Such Change in Control Purchase Price shall be paid to such Holder
promptly following the later of (i) the Change in Control Purchase Date with
respect to such Security (provided the conditions in Section 3.7(c) have been
satisfied) and (ii) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.7(c). Securities in
respect of which a Change in Control Purchase Notice has been given by the
Holder thereof may not be converted into shares of Common Stock on or after the
date of the delivery of such Change in Control Purchase Notice unless such
Change in Control Purchase Notice has first been validly withdrawn.
A Change in Control Purchase Notice may be withdrawn by means of a written
notice of withdrawal delivered by the Holder to the office of the Paying Agent
at any time prior to the close of
-17-
business on the Change in Control Purchase Date to which it relates,
specifying:
(1) the certificate number of each Security in respect of which
such notice of withdrawal is being submitted;
(2) the principal amount of the Security or portion thereof with
respect to which such notice of withdrawal is being
submitted; and
(3) the principal amount, if any, of such Security that remains
subject to the original Change in Control Purchase Notice
and that has been or will be delivered for purchase by the
Company.
There shall be no purchase of any Securities pursuant to Section 3.7 if
there has occurred (prior to, on or after, as the case may be, the giving, by
the Holders of such Securities, of the required Change in Control Purchase
Notice) and is continuing an Event of Default (other than a default in the
payment of the Change in Control Purchase Price with respect to such
Securities).
SECTION 3.9 Deposit of Change in Control Purchase Price.
--------------------------------------------
On or before the second Business Day immediately following a Change in
Control Purchase Date, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company is acting as the Paying Agent, shall segregate
and hold in trust as provided in Section 2.4) an amount of money sufficient to
pay the aggregate Change in Control Purchase Price of all the Securities or
portions thereof that are to be purchased as of such Change in Control Purchase
Date. The manner in which the deposit required by this Section 3.9 is made by
the Company shall be at the option of the Company, provided that such deposit
shall be made in a manner such that the Trustee or the Paying Agent shall have
immediately available funds on the second Business Day immediately following
the Change in Control Purchase Date.
If the Paying Agent holds, in accordance with the terms hereof, money
sufficient to pay the Change in Control Purchase Price of any Security tendered
for redemption, then, on the second Business Day immediately subsequent to the
Change in Control Purchase Date, such Security will cease to be outstanding and
will be deemed paid, whether or not such Security is delivered to the Paying
Agent, and all other rights of the Holder in respect thereof shall terminate
(other than the right to receive the Change in Control Purchase Price upon
delivery of such Security).
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SECTION 3.10 Securities Purchased in Part.
----------------------------
Any Security that is to be purchased only in part shall be surrendered at
the office of the Paying Agent (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, or such authorized
denomination or denominations as may be requested by such Holder, in aggregate
principal amount equal to, and in exchange for, the portion of the principal
amount of the Security so surrendered that is not purchased.
SECTION 3.11 Compliance with Securities Laws upon Purchase of Securities.
-----------------------------------------------------------
In connection with any offer to purchase or purchase of Securities under
Section 3.7 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 under the Exchange Act (which term, as
used herein, includes any successor provision thereto) at the time of such offer
or purchase), the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 under
the Exchange Act, (ii) file the related Schedule 13E-4 (or any successor
schedule, form or report) under the Exchange Act, and (iii) otherwise comply
with all Federal and state securities laws so as to permit the rights of the
Holders and obligations of the Company under Sections 3.7 through 3.10 to be
exercised in the time and in the manner specified therein.
SECTION 3.12 Repayment to the Company.
------------------------
Subject to the provisions of Section 5.7 to the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 3.9 exceeds the
aggregate Change in Control Purchase Price of the Securities or portions thereof
to be purchased, then promptly after the second Business Day immediately
following the Change in Control Purchase Date the Trustee or the Paying Agent,
as the case may be, shall return any such excess to the Company.
ARTICLE 4.
CONVERSION
SECTION 4.1 Conversion Privilege.
--------------------
A Holder of a Security may convert such Security into Common Stock at any
time prior to maturity, at the conversion price then in effect; provided that,
if such Security is called for redemption pursuant to Article 3, such
conversion right shall terminate at the
-19-
close of business on the fifth Business Day immediately preceding the redemption
date for such Security (unless the Company shall default in making the
redemption payment when due, in which case the conversion right shall terminate
at the close of business on the date such default is cured and such Security is
redeemed); provided, further, that, if the Holder of a Security presents such
--------- --------
Security for redemption prior to the close of business on the fifth Business Day
immediately preceding the redemption date for such Security, the right of
conversion shall terminate upon presentation of the Security to the Trustee
(unless the Company shall default in making the redemption payment when due, in
which case the conversion right shall terminate at the close of business on the
date such default is cured and such Security is redeemed). The number of shares
of Common Stock issuable upon conversion of a Security shall be determined by
dividing the principal amount of the Security or portion thereof surrendered for
conversion by the Conversion Price in effect on the conversion date. The initial
Conversion Price is set forth in paragraph 8 of the Securities and is subject to
adjustment as provided in this Article 4.
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of a Security.
A Security in respect of which a Holder has delivered a Change in Control
Purchase Notice pursuant to Section 3.7(c) exercising the option of such Holder
to require the Company to purchase such Security may be converted only if such
Purchase Notice is withdrawn by a written notice of withdrawal delivered to the
Paying Agent prior to the close of business on the Change in Control Purchase
Date in accordance with Section 3.8.
A Holder of Securities is not entitled to any rights of a holder of Common
Stock until such Holder has converted his Securities to Common Stock, and only
to the extent such Securities are deemed to have been converted to Common Stock
pursuant to this Article 4.
SECTION 4.2 Conversion Procedure.
--------------------
To convert a Security, a Holder must (i) complete and manually sign the
conversion notice on the back of the Security and deliver such notice to the
Conversion Agent, (ii) surrender the Security to the Conversion Agent, (iii)
furnish appropriate endorsements and transfer documents if required by the
Registrar or the Conversion Agent and (iv) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is
the "Conversion Date". As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder through the Conversion Agent a certificate
for the number of whole shares of
-20-
Common Stock issuable upon the conversion and cash in lieu of any fractional
shares pursuant to Section 4.3.
The person in whose name the certificate is registered shall be deemed to
be a stockholder of record on the Conversion Date; provided, however, that no
-------- -------
surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the person or persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; provided, further, that such conversion shall be
-------- -------
at the Conversion Price in effect on the Conversion Date as if the stock
transfer books of the Company had not been closed. Upon conversion of a
Security, such person shall no longer be a Holder of such Security.
No payment or adjustment will be made for accrued interest on a converted
Security or for dividends or distributions on shares of Common Stock issued upon
conversion of a Security, but if any Holder surrenders a Security for conversion
after the close of business on the record date for the payment of an installment
of interest and before the close of business on the next interest payment date,
then, notwithstanding such conversion, the interest payable on such interest
payment date shall be paid to the Holder of such Security on such record date.
In such event, such Security, when surrendered for conversion, must be
accompanied by delivery of a check or draft payable to the Conversion Agent in
an amount equal to the interest payable on such interest payment date on the
portion so converted. If such payment does not accompany such Security, the
Security shall not be converted. If the Company defaults in the payment of
interest payable on the interest payment date, the Conversion Agent shall repay
such funds to the Holder.
If a Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security equal in principal amount to the unconverted portion of the Security
surrendered.
SECTION 4.3 Fractional Shares.
-----------------
The Company will not issue fractional shares of Common Stock upon
conversion of Securities. In lieu thereof, the Company will pay an amount in
cash based upon the closing sale price of the
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Common Stock on the trading day immediately prior to the date of conversion.
SECTION 4.4 Taxes on Conversion.
-------------------
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon such conversion. However, the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificates
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulations.
SECTION 4.5 Company to Provide Stock.
------------------------
The Company shall, prior to issuance of any Securities hereunder, and from
time to time as may be necessary, reserve, out of its authorized but unissued
Common Stock a sufficient number of shares of Common Stock to permit the
conversion of all outstanding Securities for shares of Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly authorized,
validly issued, fully paid and non-assessable and shall be free from preemptive
rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.
SECTION 4.6 Adjustment of Conversion Price.
------------------------------
The conversion price (the "Conversion Price") shall be adjusted from time
to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend in shares of Common Stock
to holders of Common Stock, (ii) make a distribution in shares of Common Stock
to holders of Common Stock, (iii) subdivide its outstanding Common Stock into a
greater number of shares, or (iv) combine its outstanding Common Stock into a
smaller number of shares, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive
-22-
the number of shares of Common Stock which he would have owned had such Security
been converted immediately prior to the happening of such event. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend in shares or distribution and shall
become effective immediately after the effective date in the case of subdivision
or combination.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share of Common Stock (as determined in
accordance with subsection (e) 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 such record date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on such record date, plus
the number of shares which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at such current market price,
and of which the denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock offered (or into which the convertible securities so offered are
convertible). Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately after such
record date. If at the end of the period during which such rights or warrants
are exercisable not all warrants or rights shall have been exercised, the
adjusted Conversion Price shall be immediately readjusted to what it would have
been based upon the number of additional shares of Common Stock actually issued
(or the number of shares of Common Stock issuable upon conversion of convertible
securities actually issued).
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of capital stock of the Company (other
than Common Stock), evidences of indebtedness or other non-cash assets
(including securities of any company other than the Company), or shall
distribute to all or substantially all holders of its Common Stock rights or
warrants to subscribe for or purchase any of its securities (excluding those
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 such
distribution by a fraction of which the numerator shall be the current market
price per share (as
-23-
defined in subsection (e) below) of the Common Stock on the record date
mentioned below less the fair market value on such record date (as determined by
the Board of Directors of the Company, whose determination shall be conclusive
evidence of such fair market value) 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 (determined on the basis of the number
of shares of Common Stock outstanding on the record date), and of which the
denominator shall be the market price per share (as defined in subsection (e)
below) of the Common Stock on such record date. Such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the Company shall distribute rights or warrants
(other than those referred to in subsection (b) above) ("Rights") pro rata to
holders of Common Stock, the Company may, in lieu of making any adjustment
pursuant to this Section 4.6, make proper provision so that each holder of a
Security who converts such Security (or any portion thereof) after the record
date for such distribution and prior to the expiration or redemption of the
Rights shall be entitled to receive upon such conversion, in addition to the
shares of Common Stock issuable upon such conversion (the "Conversion Shares"),
a number of Rights to be determined as follows: (i) if such conversion occurs on
or prior to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights; and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the Security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute (a "Triggering Distribution") to all or substantially all holders of
its Common Stock cash in an aggregate amount that, together with the aggregate
amount of any other cash distributions to all or substantially all holders of
its Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.6 has been made, exceeds 20% of the product of the
current market price per share of Common Stock (as determined in accordance
with subsection (e) below) on the Business Day (the "Determination Date")
immediately preceding the day on which such Triggering Distribution is declared
by the Company multiplied by the number of shares of Common Stock outstanding on
such date (excluding shares held in the Treasury of
-24-
the Company), the Conversion Price shall be reduced so that the same shall equal
the price determined by multiplying such Conversion Price in effect immediately
prior to the Determination Date by a fraction of which the numerator shall be
the current market price per share of the Common Stock (as determined in
accordance with subsection (e) below) on the Determination Day less the amount
of cash so distributed within such 12 months (including, without limitation, the
Triggering Distribution) applicable to one share of Common Stock (determined on
the basis of the number of shares of Common Stock outstanding on the
Determination Date) and the denominator shall be such current market price per
share of the Common Stock (as determined in accordance with subsection (e)
below) on the Determination Date, such reduction to become effective immediately
prior to the opening of business on the day following the date on which the
Triggering Distribution is paid.
(e) For the purpose of any computation under subsections (b), (c) and (d)
above, the current market price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices for the 30 consecutive
trading days commencing 45 trading days before the Determination Date with
respect to distributions under subsection (d) above or the record date with
respect to distributions, issuances or other events requiring such computation
under subsections (b) or (c) above. The closing price for each day shall be the
last reported sales price or, in case no such reported sale takes place on such
date, the average of the reported closing bid and asked prices in either case on
the New York Stock Exchange Composite Tape, or if the Common Stock is not listed
or admitted to trading on such Exchange, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, the closing
sales price of the Common Stock as quoted by NASDAQ, or in case no reported
sales takes place, the average of the closing bid and asked prices as quoted by
NASDAQ or any comparable system, or if the Common Stock is not quoted on NASDAQ
or any comparable system, the closing sales price or, in case no reported sale
takes place, the average of the closing bid and asked prices, as furnished by
any two members of the National Association of Securities Dealers, Inc. selected
from time to time by the Company for that purpose.
(f) In any case in which this Section 4.6 shall require that an adjustment
be made following a record date or a Determination Date, as the case may be,
established for purposes of Section 4.6, the Company may elect to defer (but
only until five Business Days following the filing by the Company with the
Trustee of the certificate described in Section 4.10 below) issuing to the
holder of any Security converted after such record date or Determination Date
the shares of Common Stock and other capital stock of the Company issuable upon
such conversion over and above the shares of Common Stock and other capital
stock of the Company issuable upon such conversion only on the basis of the
Conversion Price prior to
-25-
adjustment; and, in lieu of the shares the issuance of which is so deferred, the
Company shall issue or cause its transfer agents to issue due bills or other
appropriate evidence prepared by the Company or the right to receive such
shares.
SECTION 4.7 No Adjustment.
-------------
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
-------- -------
by reason of this Section 4.7 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section 4.6 if
all Securityholders are entitled to participate in the transaction on a basis
and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction. The Company shall give notice to the Trustee of
any such determination.
No adjustment need be made for rights to purchase Common Stock or
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or a change to no
par value of the Common Stock.
To the extent that the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
SECTION 4.8 Equivalent Adjustments.
----------------------
In the event that, as a result of an adjustment made pursuant to
Section 4.6 above, the holder of any Security thereafter surrendered for
conversion shall become entitled to receive any shares of capital stock of the
Company other than shares of its Common Stock, thereafter the Conversion Price
of such other shares so receivable upon conversion of any Securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Article 4.
SECTION 4.9 Adjustment for Tax Purposes.
---------------------------
The Company shall be entitled to make such reductions in the Conversion
Price, in addition to those required by Section 4.6, as it in its discretion
shall determine to be advisable in order that
-26-
any stock dividends, subdivisions of shares, distributions of rights to purchase
stock or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.
SECTION 4.10 Notice of Adjustment.
--------------------
Whenever the Conversion Price is adjusted, the Company shall promptly mail
to Securityholders a notice of the adjustment and file with the Trustee an
Officers' Certificate briefly stating the facts requiring the adjustment and the
manner of computing it. The certificate shall be conclusive evidence of the
correctness of such adjustment.
SECTION 4.11 Notice of Certain Transactions.
------------------------------
In the event that:
(1) the Company takes any action which would require an adjustment
in the Conversion Price;
(2) the Company consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation and stockholders
of the Company must approve the transaction; or
(3) there is a dissolution or liquidation of the Company,
the Company shall mail to Securityholders and file with the Trustee a notice
stating the proposed record or effective date, as the case may be. The Company
shall mail the notice at least ten days before such date. Failure to mail such
notice or any defect therein shall not affect the validity of any transaction
referred to in clause (1), (2) or (3) of this Section 4.11.
SECTION 4.12 Effect of Reclassification, Consolidation, Merger
-------------------------------------------------
or Sale on Conversion Privilege.
--------------------------------
If any of the following shall occur, namely: (i) any reclassification or
change of shares of Common Stock issuable upon conversion of Securities (other
than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination); (ii) any
consolidation or merger to which the Company is a party other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or par value, or
from par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination) in, outstanding shares of Common
Stock; or (iii) any sale or conveyance of all or substantially all of the assets
of the
-27-
Company as an entirety, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. Such
supplemental indenture shall provide for adjustments of the Conversion Price
which shall be as nearly equivalent as may be practicable to the adjustments of
the Conversion Price provided for in this Article 4. If, in the case of any such
consolidation, merger, sale or conveyance, the stock or other securities and
property (including cash) receivable thereupon by a holder of Common Stock
includes shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance then such supplemental indenture shall
also be executed by such other corporation and shall contain such additional
provisions to protect the interests of the Holders of the Securities as the
Board of Directors of the Company shall reasonably consider necessary by reason
of the foregoing. The provisions of this Section 4.12 shall similarly apply to
successive consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture pursuant
to this Section 4.12, the Company shall promptly file with the Trustee (i) an
Officers' Certificate briefly stating the reasons therefor, the kind or amount
of shares of stock or securities or property (including cash) receivable by
Holders of the Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale or conveyance, any
adjustment to be made with respect thereto and that all conditions precedent
have been complied with and (ii) an Opinion of Counsel that all conditions
precedent have been complied with.
SECTION 4.13 Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this
Article 4 should be made, how it should be made or what such adjustment should
be, but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon, the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 4.10. The Trustee makes no representation as to the validity
or value of any securities or assets issued upon conversion of Securities, and
the Trustee shall not be responsible for
-28-
the Company's failure to comply with any provisions of this Article 4.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.12.
SECTION 4.14 Voluntary Reduction.
-------------------
The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days or such longer
period as may be required by law and if the reduction is irrevocable during the
period; provided, that in no event may the Conversion Price be less then the
par value of a share of Common Stock.
ARTICLE 5.
SUBORDINATION
SECTION 5.1 Securities Subordinated to Senior Indebtedness.
----------------------------------------------
The Company covenants and agrees, and each holder of Securities issued
hereunder by his acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article 5; and each
Person holding any Security, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of and interest on all Securities issued
hereunder (including without limitation in connection with any redemption of
Securities) 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, whether outstanding at the date of this Indenture or
thereafter created, incurred, assumed or guaranteed.
SECTION 5.2 Securities Subordinated to Prior Payment of All
-----------------------------------------------
Senior Indebtedness on Dissolution, Liquidation,
------------------------------------------------
Reorganization, etc., of the Company.
------------------------------------
Upon any payment or distribution of the assets of the Company of any kind
or character, whether in cash, property or securities (including any collateral
at any time securing the Securities), to creditors upon any dissolution,
winding-up, total or partial liquidation or reorganization of the Company
(whether voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
-29-
liquidation, receivership proceedings, or upon an assignment for the benefit of
creditors, or any other marshalling of the assets and liabilities of the
Company, or otherwise), then in such event:
(a) all Senior Indebtedness (including principal thereof, interest
thereon and fees and expenses relating thereto) and the
reasonable fees and expenses of the Trustee shall first be paid
in full, in cash, or have provision made for such payment, before
any payment is made on account of the principal of or interest on
the indebtedness evidenced by the Securities or any deposit is
made pursuant to Section 6.3;
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than
securities of the Company as reorganized or readjusted, or
securities of the Company or any other company, trust or
corporation provided for by a plan of reorganization or
readjustment, junior, or the payment of which is otherwise
subordinate, at least to the extent provided in this Article 5,
with respect to the Securities, to the payment of all Senior
Indebtedness at that time outstanding and to the payment of all
securities issued in exchange therefor to the holders of the
Senior Indebtedness at the time outstanding), to which the
Holders or the Trustee on behalf of the Holders would be entitled
except for the provisions of this Article 5, including any such
payment or distribution which may be payable or deliverable by
reason of the payment of another debt of the Company being
subordinated to the payment of the Securities, shall be paid or
delivered by any debtor, Custodian or other person making such
payment or distribution, directly to the holders of the Senior
Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining
unpaid on account of the principal of, interest on and fees and
expenses relating to the Senior Indebtedness held or represented
by each, for application to payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full after giving effect to any concurrent
payment or distribution, or provision therefor, to the holders of
such Senior Indebtedness; and
-30-
(c) in the event that, notwithstanding the foregoing provisions of
this Section 5.2, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities (other than securities of the Company as reorganized
or readjusted, or securities of the Company or any other company,
trust or corporation provided for by a plan of reorganization or
readjustment, junior, or the payment of which is otherwise
subordinate, at least to the extent provided for in this Article
5, with respect to the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to the payment of all
securities issued in exchange therefor to the holders of Senior
Indebtedness at the time outstanding), shall be received by the
Trustee or the Holders before all Senior Indebtedness is paid in
full, or provision made for its payment, such payment or
distribution (subject to the provisions of Sections 5.6 and 5.7)
shall be held in trust for the benefit of, and shall be
immediately paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of Senior Indebtedness remaining
unpaid or unprovided for, or their representative or
representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of
such Senior Indebtedness may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the
principal of, interest on and fees and expenses relating to the
Senior Indebtedness held or represented by each, for application
to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full after
giving effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior Indebtedness.
The Company shall give prompt notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
Upon any distribution of assets of the Company referred to in this Article
5, the Trustee, subject to the provisions of Sections 9.1 and 9.2, and the
Holders shall be entitled to rely upon any order or decree by any court of
competent jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceeding is pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders, 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
-31-
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 5.
SECTION 5.3 Securityholders to be Subrogated to Right of
--------------------------------------------
Holders of Senior Indebtedness.
------------------------------
Subject to the prior payment in full of all Senior Indebtedness then due,
the Holders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until the principal of and interest on the
Securities shall be paid in full, and for purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of assets,
whether in cash, property or securities, distributable to the holders of Senior
Indebtedness under the provisions hereof to which the Holders would be entitled
except for the provisions of this Article 5, and no payment pursuant to the
provisions of this Article 5 to the holders of Senior Indebtedness by the
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 5 are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
SECTION 5.4 Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article 5 or elsewhere in this Indenture or in
any Security is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders the
principal of and interest on the Securities, as and when the same shall become
due and payable in accordance with the terms of the Securities, or to affect
the relative rights of the Holders and other creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon the happening of an Event of Default under this Indenture,
subject to the provisions of Article 8, and the rights, if any, under this
Article 5 of the holders of Senior Indebtedness in respect of assets, whether in
cash, property or securities, of the Company received upon the exercise of any
such remedy.
-32-
SECTION 5.5 Company Not to Make Payment with Respect to Securities in Certain
-----------------------------------------------------------------
Circumstances.
-------------
(a) Upon the happening of a default in payment (whether at maturity or at
a date fixed for prepayment or by acceleration or otherwise) of the principal of
or interest on any Senior Indebtedness, as such default is defined under or in
respect of any Senior Indebtedness or in any agreement pursuant to which any
Senior Indebtedness has been incurred, then, unless and until the amount of such
Senior Indebtedness then due shall have been paid in full or provision made
therefor in a manner satisfactory to the holders of such Senior Indebtedness, or
such default shall have been cured or waived or shall have ceased to exist, the
Company shall not pay principal of or interest on the Securities or make any
deposit pursuant to Section 6.3 or 10.1 and shall not repurchase, redeem or
otherwise retire any Securities (collectively, "pay the Securities").
(b) Upon the happening of an event of default with respect to any Senior
Indebtedness (other than under circumstances when the terms of paragraph (a) of
this Section 5.5 are applicable), as such event of default is defined under or
in respect of any Senior Indebtedness or in any agreement pursuant to which any
Senior Indebtedness has been incurred, permitting the holders thereof to
immediately accelerate the maturity thereof, and upon written notice thereof
given to the Company and the Trustee by any holders of such Senior Indebtedness
or their representative(s) (a "Default Notice"), then, unless and until such
event of default shall have been cured or waived in writing by the holders of
such Senior Indebtedness or shall have ceased to exist, no direct or indirect
payment shall be made with respect to the principal of or interest on the
Securities or to acquire any of the Securities or on account of the redemption
provisions of the Securities; provided, however, that this paragraph (b) shall
-------- -------
not prevent the making of any such payment (which is not otherwise prohibited by
paragraph (a) of this Section 5.5) for more than 89 days after the Default
Notice shall have been given unless the Senior Indebtedness in respect of which
such event of default exists has been declared due and payable in its entirety,
in which case no such payment may be made until such acceleration has been
waived, rescinded or annulled, or such Senior Indebtedness shall have been paid
in full, or payment thereof shall be duly provided for in cash or in any other
manner satisfactory to the holders of such Senior Indebtedness. Notwithstanding
the foregoing, not more than one Default Notice shall be given with respect to
the same issue of Senior Indebtedness within a period of 360 consecutive days,
and no event of default which existed or was continuing on the date of any
Default Notice and was known to the holders of such issue of Senior Indebtedness
shall be made the basis for the giving of a subsequent Default Notice by the
holders of such issue of Senior Indebtedness.
-33-
(c) In the event that, notwithstanding the foregoing provisions of this
Section 5.5, any payment on account of the principal of or interest on the
Securities shall be made by or on behalf of the Company and received by the
Trustee, any Holder or any Paying Agent (or, if the Company is acting as its own
Paying Agent, money for any such payment shall be segregated and held in trust),
after the happening of a default under any Senior Indebtedness of the type
specified in subsections (a) and (b) of this Section 5.5, then, unless and until
the amount of such Senior Indebtedness then due shall have been paid in full, or
provision made therefor or such default shall have been cured or waived, such
payment (subject, in each case, to the provisions of Sections 5.6 and 5.7 and
the proviso contained in such subsection (b)), be held in trust for the benefit
of, and shall be immediately paid over to, the holders of Senior Indebtedness or
their representative or representatives or the trustee or trustees under any
indenture under which any instruments evidencing any of the Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the principal of and interest on, and fees and other
charges in respect of the Senior Indebtedness held or represented by each, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of Senior Indebtedness. The Company shall give prompt
written notice to the Trustee of any default under any Senior Indebtedness or
under any agreement pursuant to which Senior Indebtedness may have been issued.
SECTION 5.6 Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article 5 or any other provision of this Indenture, the Trustee shall not at
any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee, unless and until the
Trustee shall have received written notice thereof from the Company or from any
holder or holders of Senior Indebtedness or from their representative or
representatives; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Sections 9.1 and 9.2, shall be entitled to
assume conclusively that such facts do not exist.
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 representative of such holder) to establish that such notice has been
given by a holder of Senior Indebtedness or a representative of any such holder.
In the event that the Trustee determines in good faith that further evidence is
-34-
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 5, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent of which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each person under this Article 5, and if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
SECTION 5.7 Application by Trustee of Monies Deposited with It.
--------------------------------------------------
Money or U.S. Government Obligations deposited in trust with the Trustee
pursuant to Sections 6.3 and 10.1 and not in violation of this Article 5 shall
be for the sole benefit of Securityholders and shall thereafter not be subject
to the subordination provisions of this Article 5. Otherwise, any deposit of
monies by the Company with the Trustee or any Paying Agent (whether or not in
trust) for the payment of the principal of or interest on any Securities shall
be subject to the provisions of Sections 5.1, 5.2, 5.3 and 5.5; except that, if
two Business Days prior to the date on which by the terms of this Indenture any
such monies may become payable for any purpose (including, without limitation,
the payment of either the principal of or interest on any Security) the Trustee
shall not have received with respect to such monies the notice provided for in
Section 5.6, then the Trustee or any Paying Agent shall have full power and
authority to receive such monies and to apply such monies 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 date. This Section 5.7
shall be construed solely for the benefit of the Trustee and the Paying Agent
and shall not otherwise affect the rights that holders of Senior Indebtedness
may have to recover any such payments from the Holders in accordance with the
provisions of this Article 5.
SECTION 5.8 Subordination Rights Not Impaired by Acts or Omissions of Company
-----------------------------------------------------------------
or Holders of Senior Indebtedness.
---------------------------------
No right of any present or future holders 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 or any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of any Senior Indebtedness may extend,
renew, modify or amend the terms of such Senior Indebtedness or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company, all
-35-
without affecting the liabilities and obligations of the parties to this
Indenture or the Holders. No provision in any supplemental indenture which
affects the superior position of the holders of the Senior Indebtedness shall be
effective against the holders of the Senior Indebtedness unless the holders of
such Senior Indebtedness (required pursuant to the terms of such Senior
Indebtedness to give such consent) have consented thereto.
SECTION 5.9 Trustee to Effectuate Subordination.
-----------------------------------
Each holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article 5 and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 5.10 Right of Trustee to Hold Senior Indebtedness.
--------------------------------------------
The Trustee, in its individual capacity, shall be entitled to all of the
rights set forth in this Article 5 in respect of any Senior Indebtedness at any
time held by it to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall be construed to deprive the Trustee of any
of its rights as such holder.
SECTION 5.11 Article 5 Not to Prevent Events of Default.
------------------------------------------
The failure to make a payment on account of the principal of or interest on
the Securities by reason of any provision in this Article 5 shall not be
construed as preventing the occurrence of an Event of Default under Section 8.1.
SECTION 5.12 No Fiduciary Duty Created to Holders of Senior Indebtedness.
-----------------------------------------------------------
Notwithstanding any other provision in this Article 5, the Trustee shall
not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness by
virtue of the provisions of this Article 5.
SECTION 5.13 Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 5 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article 5 in addition to or in place of the Trustee; provided, however,
-------- -------
that Sections 5.6, 5.10 and 5.12 shall not apply to the Company if it acts as
Paying Agent.
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ARTICLE 6.
COVENANTS
SECTION 6.1 Payment of Securities.
---------------------
The Company shall promptly make all payments in respect of the Securities
on the dates and in the manner provided in the Securities and this Indenture.
An installment of principal or interest shall be considered paid on the date it
is due if the Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date money designated for and sufficient to pay the
installment. The Company shall pay interest on overdue principal at the rate
borne by the Securities per annum; it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
SECTION 6.2 SEC Reports.
-----------
The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act, and within 15 days after it files them with the SEC, the
Company shall file copies of all such reports, information and other documents
with the Trustee. The Company will cause any quarterly and annual reports
which it mails to its stockholders to be mailed to the Holders of the
Securities.
In the event the Company is at any time no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will
prepare, for the first three quarters of each fiscal year, quarterly financial
statements substantially equivalent to the financial statements required to be
included in a report on Form 10-Q under the Exchange Act. The Company will also
prepare, on an annual basis, complete audited consolidated financial statements
including, but not limited to, a balance sheet, a statement of income and
retained earnings, a statement of changes in financial position and all
appropriate notes. All such financial statements will be prepared in accordance
with generally accepted accounting principles consistently applied, except for
changes with which the Company's independent accountants concur, and except that
quarterly statements may be subject to year-end adjustments. The Company will
cause a copy of such financial statements to be filed with the Trustee and
mailed to the Holders of the Securities within 50 days after the end of each of
the first three quarters of each fiscal year and within 95 days after the close
of each fiscal year. The Company will also comply with the other provisions of
TIA (S)314(a).
-37-
SECTION 6.3 Liquidation.
-----------
Subject to the provisions of Article 5, so far as they may be applicable
hereto, the Board of Directors or the stockholders of the Company may not adopt
a plan of liquidation which plan provides for, contemplates or the effectuation
of which is preceded by (a) the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company otherwise than
substantially as an entirety (Article 7 of this Indenture being the Article
which governs any such sale, lease, conveyance or other disposition
substantially as an entirety) and (b) the distribution of all or substantially
all of the proceeds of such sale, lease conveyance or other disposition and of
the remaining assets of the Company to the holders of the capital stock of the
Company, unless the Company shall in connection with the adoption of such plan
make provision for, or agree that prior to making any liquidating distributions
it will make provision for, the satisfaction of the Company's obligations
hereunder and under the Securities as to the payment of the principal and
interest thereof. The Company shall be deemed to make provision for such
payments only if (1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations maturing as to principal and interest in
such amounts and at such times as are sufficient, without consideration of any
reinvestment of such interest, to pay the principal of and interest on the
Securities then outstanding to maturity and to pay all other sums payable by it
hereunder or (2) there is an express assumption of the due and punctual payment
of the Company's obligations hereunder and under the Securities and the
performance and observance of all covenants and conditions to be performed by
the Company hereunder, by the execution and delivery of a supplemental indenture
in form satisfactory to the Trustee by a person who acquires, or will acquire
(otherwise than pursuant to a lease) a portion of the assets of the Company, and
which person will have assets (immediately after the acquisition) and aggregate
earnings (for such person's four full fiscal quarters immediately preceding such
acquisition) equal to not less than the assets of the Company (immediately
preceding such acquisition) and the aggregate earnings of the Company (for its
four full fiscal quarters immediately preceding the acquisition), respectively,
and which is a corporation organized under the laws of the United States,
any State thereof or the District of Columbia; provided, however, that the
-------- -------
Company shall not make any liquidating distribution until after (i) the Company
shall have certified to the Trustee with an Officers' Certificate at least five
days prior to the making of any liquidating distribution that it has complied
with the provisions of this Section 6.3 and (ii) has delivered to the Trustee an
Opinion of Counsel that all conditions precedent to such liquidation have been
complied with.
-38-
SECTION 6.4 Compliance Certificates.
-----------------------
The Company shall deliver to the Trustee within 90 days after the end of
each fiscal year of the Company, an Officers' Certificate as to the signer's
knowledge of the Company's compliance with all conditions and covenants on its
part contained in this Indenture and stating whether or not the signer knows of
any default or Event of Default. If such signer knows of such a default or
Event of Default the Officers' Certificate shall describe the default or Event
of Default and the efforts to remedy the same. For the purposes of this Section
6.4, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture. The
Officers' Certificate need not comply with Section 12.4 hereof.
SECTION 6.5 Notice of Defaults.
------------------
In the event (i) that indebtedness of the Company in an aggregate amount in
excess of $7,500,000 is declared due and payable before its maturity because of
the occurrence of any default under such indebtedness, or (ii) of the occurrence
of any event which, with the giving of notice or the passage of time, or both,
would entitle the holder or holders of such indebtedness to declare such
indebtedness due and payable before its maturity, the Company will promptly give
written notice to the Trustee of such declaration.
SECTION 6.6 Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company, directly or by reason
of its ownership of any Subsidiary or upon the income, profits or property of
the Company and (2) all material lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of the
Company; provided, however, that the Company shall not be required to pay or
-------- -------
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate provision has been made.
SECTION 6.7 Corporate Existence.
-------------------
Subject to Section 6.3 and Article 7, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and rights (charter and statutory); provided, however, that
-------- -------
the Company shall not be required to preserve any right if the Board of
Directors shall determine in good faith that the preservation is no longer
desirable in the conduct of the Company's business and that the
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loss thereof is not, and will not be, adverse in any material respect to the
Holders.
SECTION 6.8 Maintenance of Properties.
-------------------------
Subject to Section 6.3, the Company will cause all material properties
owned, leased or licensed in the conduct of its business to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof and thereto, all as in the
reasonable judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times while any Securities are outstanding; provided, however, that nothing in
-------- -------
this Section 6.8 shall prevent the Company from discontinuing the maintenance of
any such properties if, in the reasonable judgement of the Board of Directors,
such discontinuance is desirable in the conduct of the Company's business and is
not, and will not be, adverse in any material respect to the Holders.
SECTION 6.9 Further Instruments and Acts.
----------------------------
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
ARTICLE 7.
SUCCESSOR CORPORATION
SECTION 7.1 When Company May Merge, etc.
---------------------------
The Company shall not consolidate with or merge with or into, or transfer
all or substantially all of its assets to, any person unless:
(a) either the Company shall be the resulting or surviving entity or
such person is a corporation organized and existing under the laws of the
United States, a State thereof or the District of Columbia, and such person
expressly assumes by supplemental indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture (in which case all such
obligations of the Company shall terminate); and
(b) immediately before and immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of
the Company as a result of such
-40-
transaction as having been incurred by the Company at the time of such
transaction, no default or Event of Default shall have occurred and be
continuing.
The Company shall deliver to the Trustee prior to the proposed transaction
an Officers' Certificate and an Opinion of Counsel, each of which shall comply
with Section 12.4 and shall state that such consolidation, merger or transfer
and such supplemental indenture comply with this Article 7 and that all
conditions precedent herein provided for relating to such transaction have been
complied with; provided, however, that such Opinion of Counsel shall not address
Events of Default, except where such counsel has actual knowledge of any such
Event of Default.
SECTION 7.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any transfer of all or substantially
all of the assets of the Company in accordance with Section 7.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
herein.
ARTICLE 8.
DEFAULT AND REMEDIES
SECTION 8.1 Events of Default.
-----------------
An "Event of Default" shall occur if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon
redemption or otherwise;
(3) the Company fails to comply with any of its other agreements
contained in the Securities or this Indenture and the default
continues for the period and after the notice specified below;
(4) the Company or any Material Subsidiary (as defined below) of
the Company shall fail to pay at maturity or at a date fixed for
prepayment or by acceleration (provided, however, such acceleration is
-------- -------
not withdrawn, cancelled or otherwise annulled within ten
-41-
days following the occurrence of such acceleration) principal of, premium,
if any, or interest under any bond, debenture, note or other evidence of
indebtedness for money borrowed or under any mortgage, indenture or other
instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company or under
any guarantee of payment by the Company of indebtedness for money borrowed,
whether such indebtedness or guarantee now exists or shall hereafter be
created; provided, however, no such Event of Default shall exist under this
-------- -------
Section 8.1(4) unless the aggregate amount of such principal, premium, if
any, and interest which is due and unpaid whether by reason of maturity or
at a date fixed for prepayment or by acceleration (provided, such
acceleration is not withdrawn, cancelled or otherwise annulled within ten
days following the occurrence of such acceleration) is in excess of
$7,500,000;
(5) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property; or
(D) makes a general assignment for the benefit of its creditor;
or
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) if for relief against the Company or any Material Subsidiary
in an involuntary case or proceeding;
(B) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of the property of any of
them; or
(C) orders the liquidation of the Company or any Material
Subsidiary;
and in each case the order or decree remains unstayed and in effect for 60
days.
-42-
The term "Material Subsidiary" means a Subsidiary (including its
Subsidiaries) of the Company which meets either of the following conditions:
(a) the Company's and its other Subsidiaries' proportionate share of the total
assets (after intercompany eliminations) of the Subsidiary exceeds five percent
of the total assets of the Company and its Subsidiaries consolidated as of the
end of the Company's most recently completed fiscal year; or (b) the Company's
and its other Subsidiaries' equity in the income from continuing operations
before income taxes, extraordinary items and cumulative effect of a change in
accounting principle of the Subsidiary exceeds five percent of such income of
the Company and its Subsidiaries consolidated for the Company's most recently
completed fiscal year.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official under
any Bankruptcy Law.
A default under clause (3) is not an Event of Default until the Trustee
notifies the Company or the Holders of at least 25% in principal amount of the
Securities then outstanding notify the Company and the Trustee, of the default,
and the Company does not cure the default within 30 days after receipt of such
notice. The notice given pursuant to this Section 8.1 must specify the default,
demand that it be remedied and state that the notice is a "Notice of Default".
When a default is cured, it ceases.
Subject to the provisions of Sections 9.1 and 9.2, the Trustee shall not be
charged with knowledge of any Event of Default unless written notice thereof
shall have been given to a Trust Officer at the corporate trust office of the
Trustee by the Company, the Paying Agent, any Holder or an agent of any Holder.
SECTION 8.2 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in Section
8.1(5) or (6)) occurs and is continuing, the Trustee may, by notice to the
Company, or the Holders of at least 25% in principal amount of the Securities
then outstanding may, by notice to the Company and the Trustee, and the Trustee
shall, upon the request of such Holders, declare all unpaid principal of and
accrued interest to the date of acceleration on the Securities then outstanding
(if not then due and payable) to be due and payable upon any such declaration,
and the same shall become and be immediately due and payable. If an Event of
Default specified in Section 8.1(5) or (6) occurs, all unpaid principal of and
accrued interest on the Securities then outstanding shall ipso facto become and
---- -----
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholder. The Holders of a majority in principal
amount of the Securities then outstanding by notice to the Trustee may rescind
an acceleration
-43-
and its consequences if (i) all existing Events of Default, other than the
nonpayment of the principal of and accrued interest on the Securities which
has become due solely by such declaration of acceleration, have been cured or
waived; (ii) to the extent the payment of such interest is lawful, interest on
overdue installments of interest and overdue principal, which has become due
otherwise than by such declaration of acceleration, has been paid; (iii) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; and (iv) all payments due to the Trustee and any
predecessor Trustee under Section 9.7 have been made. Anything herein contained
to the contrary notwithstanding, in the event of any acceleration pursuant to
this Section 8.2, the Company shall not be obligated to pay any premium which
it would have had to pay if it had then elected to redeem the Securities
pursuant to paragraph 5 of the Securities, except in the case of any Event of
Default occurring by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding payment of
the premium which it would have had to pay if it had then elected to redeem the
Securities pursuant to paragraph 5 of the Securities, in which case an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law.
SECTION 8.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment
of the principal of or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 8.4 Waiver of Defaults and Events of Default.
----------------------------------------
Subject to Section 8.7 and 11.2, the Holders of a majority in principal
amount of the Securities then outstanding by notice to the Trustee may waive an
existing default or Event of Default and its consequences, except a default in
the payment of the principal of or interest on any Security as specified in
clauses (1) and (2) of Section 8.1. When a default or Event of Default is
waived, it is cured and ceases.
-44-
SECTION 8.5 Control by Majority.
-------------------
The Holders of a majority in principal amount of the Securities then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder or the Trustee, or that may
involve the Trustee in personal liability; provided that the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.
SECTION 8.6 Limitation on Suits.
--------------------
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities (except actions for payment of overdue principal or interest
or for the conversion of the Securities pursuant to Article 4) unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Securities then outstanding.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 8.7 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of the principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
-45-
dates, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.
SECTION 8.8 Collection Suit by Trustee.
--------------------------
If an Event of Default in the payment of principal or interest specified in
Section 8.1(1) or (2) occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of an express trust against the Company or
another obligor on the Securities for the whole amount of principal and accrued
interest remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 8.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and counsel) and the Securityholders
allowed in any judicial proceedings relative to the Company (or any other
obligor on the Securities), its creditors or its property and shall be entitled
and empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceeding is hereby authorized by each Securityholder 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 Securityholders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 9.7, and to the extent that such payment
of the reasonable compensation, expenses, disbursements and advances 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 Securityholders 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 the Trustee to
authorize or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
-46-
SECTION 8.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article 8, it shall pay
out the money in the following order:
First, to the Trustee for amounts due under Section 9.7;
-----
Second, to the holders of Senior Indebtedness to the extent required by
------
Article 5;
Third, to Securityholders for amounts due and unpaid on the Securities for
-----
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Fourth, to the Company.
------
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10.
SECTION 8.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defense made by the party litigant. This Section
8.11 does not apply to a suit made by the Trustee, a suit by a Holder pursuant
to Section 8.7, or a suit by Holders of more than 10% in principal amount of the
Securities then outstanding.
SECTION 8.12 Waiver of Usury, Stay or Extension Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
-47-
ARTICLE 9.
TRUSTEE
SECTION 9.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are specifically
set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. The Trustee, however, shall examine any
certificates and opinions which by any provision hereof are
specifically required to be delivered to the Trustee to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 9.1;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 8.5.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability, expense or fee.
-48-
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 9.1.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 9.2 Rights of Trustee.
-----------------
Subject to Section 9.1:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 12.4(b). The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Certificate or Opinion.
(c) The Trustee may act through its agents and shall not be responsible
for the misconduct or negligence of any agent appointed with reasonable care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee may consult with counsel, and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 9.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or an affiliate
of the Company with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 9.10 and 9.11.
SECTION 9.4 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
of the proceeds from the
-49-
Securities, and it shall not be responsible for any statement in the Securities
other than its certificate of authentication.
SECTION 9.5 Notice of Default or Events of Default.
--------------------------------------
If a default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder notice of
the default or Event of Default within 90 days after it occurs. Except in the
case of a default or an Event of Default in payment of the principal of or
interest on any Security, the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding
notice is in the interest of Securityholders.
SECTION 9.6 Reports by Trustee to Holders.
-----------------------------
If such report is required by TIA (S)313, within 60 days after each May 15,
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA (S)313(a). The Trustee also shall comply with TIA
(S)313(b)(2) and (c).
A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Securities are listed. The Company shall notify the Trustee
whenever the Securities become listed on any stock exchange and any changes in
the stock exchanges on which the Securities are listed.
SECTION 9.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses, and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless against,
any loss, liability or expense incurred by it in connection with its duties
under this Indenture or any action or failure to act as authorized or within the
discretion or rights or powers conferred upon the Trustee hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Trustee shall have the option of
undertaking the defense of such claims; provided, however, that if the Trustee
-------- -------
opts not to defend itself, the Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need
not pay for
-50-
any settlement without its written consent, which consent shall not be
unreasonably withheld.
The Company need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by it when it has breached the applicable
standard of care for its conduct, if any, in connection with such loss or
liability.
To secure the Company's payment obligations in this Section, the Trustee
shall have a senior claim to which the Securities are hereby made subordinate on
all money or property held or collected by the Trustee, except such money or
property held in trust to pay the principal of and interest on particular
Securities. The obligations of the Company under this Section 9.7 to compensate
or indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the Holders of particular
Securities. The obligations of the Company under this Section 9.7 shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 8.1(5) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy law.
SECTION 9.8 Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities then outstanding may remove the
Trustee by so notifying the Trustee and may, with the Company's written
consent, appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee become incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of 10% in principal amount of
-51-
the Securities then outstanding may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10 any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities that the retiring Trustee may have incurred while acting as Trustee)
hereunder, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
Notwithstanding replacement of the Trustee pursuant to this Section 9.8,
the Company's obligations under Section 9.7 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 9.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 9.10.
SECTION 9.10 Eligibility; Disqualification.
-----------------------------
The Trustee of this Indenture shall always satisfy the requirements of
paragraphs (1), (2) and (5) of TIA (S)310(a). If at any time the Trustee shall
cease to satisfy any such requirements, it shall resign immediately in the
manner and with the effect specified in this Article 9. The Trustee shall be
subject to the provisions of TIA (S)310(b). Nothing herein shall prevent the
Trustee from filing with the SEC the application referred to in the penultimate
paragraph of TIA (S)310(b).
SECTION 9.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein.
-52-
ARTICLE 10.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 10.1 Termination of Company's Obligations.
------------------------------------
Subject to applicable rules of any stock exchange or system on which the
Securities are listed or quoted, the Company may terminate all of its
obligations under the Securities and this Indenture (excepting those obligations
referred to in the immediately succeeding paragraph) if all Securities
previously authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid or Securities for whose payment
money has theretofore been held in trust and thereafter repaid to the Company,
as provided in Section 10.3) have been delivered to the Trustee or the Paying
Agent for cancellation and the Company has paid all sums payable by it
hereunder, or if the Company irrevocably deposits in trust with the Trustee or
the Paying Agent, pursuant to a written trust agreement satisfactory to the
Trustee, money or U.S. Government Obligations (as defined below) maturing as to
principal and interest in such amounts and at such times as are sufficient,
without consideration of any reinvestment of such interest, to pay the principal
of and interest on the Securities then outstanding to maturity or to the date
fixed for redemption and to pay all other sums payable by it hereunder. The
Company may make an irrevocable deposit pursuant to this Section 10.1 only if at
such time it is not prohibited from doing so under the provisions of Article 5
and the Company shall have delivered to the Trustee and any such Paying Agent an
Officers' Certificate and an Opinion of Counsel to that effect and that all
other conditions to such deposit have been complied with.
The Company's obligations in paragraph 12 of the Securities and in Sections
2.3, 2.4, 2.5, 2.6, 2.7, 2.11, 6.1, 9.7, 9.8, 10.4, and Article 4 of the
Indenture shall survive until the Securities are no longer outstanding.
Thereafter, the Company's obligations in such paragraph 12 and in Section 9.7
shall survive.
After such irrevocable deposit, the Trustee upon request shall acknowledge
in writing the discharge of the Company's obligations under the Securities and
this Indenture, except for those surviving obligations specified above.
"U.S. Government Obligations" means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the
United States is pledged.
-53-
SECTION 10.2 Application of Trust Money.
--------------------------
The Trustee or the Paying Agent shall hold in trust, for the benefit of the
Holders, money or U.S. Government Obligations deposited with it pursuant to
Section 10.1, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Securities. Money and U.S. Government
Obligations so held in trust shall not be subject to the subordination
provisions of Article 5.
SECTION 10.3 Repayment to Company.
--------------------
Subject to Section 10.1, the Trustee and the Paying Agent shall promptly
pay to the Company upon request any excess money or U.S. Government Obligations
held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years after a right to such money has matured; provided,
--------
however, that the Trustee or such Paying Agent, before being required to make
-------
any such payment, may at the expense of the Company, cause to be published once
in a newspaper of general circulation in the City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and that
after a date specified therein, which shall be at least 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Securityholders
entitled to money must look to the Company for payment as general creditors
unless otherwise prohibited by law.
SECTION 10.4 Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 10.1 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 10.1 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 10.1; provided, however,
-------- -------
that if the Company has made any payment of the principal of or interest on any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive any such
payment from the money or U.S. Government Obligations held by the Trustee or the
Paying Agent.
-54-
ARTICLE 11.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.1 Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.12, 6.3 and 7.1;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not adversely affect the rights of any
Securityholder;
(d) to comply with the provisions of the TIA; or
(e) to appoint a successor Trustee.
SECTION 11.2 With Consent of Holders.
-----------------------
The Company and the Trustee may amend or supplement this Indenture or the
Securities without notice to any Securityholder with the written consent of the
Holders of 66-2/3% in principal amount of the Securities then outstanding. The
Holders of a majority in principal amount of the Securities then outstanding may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Securities without notice to any Securityholder. Subject
to Section 11.4, without the written consent of each Securityholder affected,
however, an amendment, supplement or waiver, including a waiver pursuant to
Section 8.4, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of interest on
any Security;
(3) reduce the principal of or premium on or change the fixed
maturity of any Security or alter the redemption provisions with respect
thereto;
(4) alter the conversion provisions with respect to any Security in a
manner adverse to the holder thereof;
(5) waive a default in the payment of the principal of or premium or
interest on any Security;
-55-
(6) make any changes in Section 8.4, 8.7 or this sentence;
(7) modify the provisions of Article 5 hereof in a manner adverse
to the Holders; or
(8) make any Security payable in money other than that stated in the
Security.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
An amendment under this Section 11.2 may not make any change that
adversely affects the rights under Article 5 of any holder of an issue of Senior
Indebtedness unless the holders of that issue, pursuant to its terms, consent to
the change.
SECTION 11.3 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as in effect at the date of such amendment or supplement.
SECTION 11.4 Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of a Security if the Trustee receives the notice
of revocation before the date the amendment, supplement or waiver becomes
effective.
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder, unless it makes a change described in any of clauses (1)
through (8) of Section 11.2. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
-56-
SECTION 11.5 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
SECTION 11.6 Trustee to Sign Amendments, etc.
-------------------------------
The Trustee shall sign any amendment or supplement authorized pursuant to
this Article 11 if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing or refusing to sign such amendment
or supplement, the Trustee shall be entitled to receive and, subject to Section
9.1 shall be fully protected in relying upon, an Opinion of Counsel stating that
such amendment or supplement is authorized or permitted by this Indenture. The
Company may not sign an amendment or supplement until the Board of Directors or
a duly authorized committee thereof approves it.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.1 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall control.
SECTION 12.2 Notices.
-------
Any notice or communication shall be given in writing and delivered in
person or mailed by first-class mail, postage prepaid, addressed as follows:
if to the Company:
Sterling Software, Inc.
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
-57-
if to the Trustee:
Bank of America Texas, National Association
0000 Xxxxxx, Xxxxx X
Xxxxxx, Xxxxx 00000
Attention: Corporate Trust Department
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed by
first-class mail to him at his address shown on the register kept by the
Registrar.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication to a Securityholder is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 12.3 Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S)312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA (S)312(c).
SECTION 12.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
(a) Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee at the
request of the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent (including any covenants compliance with
which constitutes a condition precedent), if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent (including any covenants compliance
with which constitutes a condition precedent) have been complied with.
(b) Each Officers' Certificate and Opinion of Counsel with respect to
compliance with a condition or covenant provided for in
-58-
this Indenture (other than annual certificates provided pursuant to Section 6.4
hereof) shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with; provided, however, that with
-------- -------
respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 12.5 Record Date for Vote or Consent of Securityholders.
--------------------------------------------------
The Company (or, in the event deposits have been made pursuant to Sections
6.3 or 10.1, the Trustee) may set a record date for purposes of determining the
identity of Securityholders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture, which record date shall be
the later of ten days prior to the first solicitation of such vote or consent or
the date of the most recent list of Securityholders furnished to the Trustee
pursuant to Section 2.5 hereof prior to such solicitation. Notwithstanding the
provisions of Section 11.4 hereof, if a record date is fixed, those persons who
were Holders of Securities at such record date (or their duly designated
proxies), and only those persons, shall be entitled to take such action by vote
or consent or to revoke any vote or consent previously given, whether or not
such persons continue to be Holders after such record date.
SECTION 12.6 Rules by Trustee, Paying Agent, Registrar, Conversion Agent.
-----------------------------------------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules for its functions.
SECTION 12.7 Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, Sunday or a day on which state or
Federally chartered banking institutions in New York, New York or the city and
state where the Trustee's corporate trust operations are located (which
initially are Dallas, Texas) are not
-59-
required to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 12.8 Governing Law.
-------------
Except as specifically provided in subsection (a) of Section 3.7, the laws
of the State of Texas shall govern this Indenture and the Securities without
regard to principles of conflicts of law.
SECTION 12.9 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 12.10 No Recourse Against Others.
--------------------------
All liability described in paragraph 17 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
SECTION 12.11 Successors.
----------
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 12.12 Multiple Counterparts.
---------------------
The parties may sign multiple counterparts of this Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent the
same agreement.
SECTION 12.13 Separability.
------------
In case any provisions in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.14 Table of Contents, Headings, etc.
--------------------------------
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
-60-
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of
the 2nd day of February, 1993.
STERLING SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
[SEAL]
Attest:
/s/ Xxxxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President, Secretary
and General Counsel
BANK OF AMERICA TEXAS,
NATIONAL ASSOCIATION
as Trustee
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
[SEAL]
Attest:
/s/ Xxxx Xxxx
--------------------------------
Name: Xxxx Xxxx
Title: Trust Officer
EXHIBIT A
[FORM OF FACE OF SECURITY]
Number
STERLING SOFTWARE, INC.
INCORPORATED UNDER THE
LAWS OF THE STATE OF DELAWARE
5 3/4% Convertible Subordinated Debenture due 2003
Sterling Software, Inc. promises to pay to __________________ or registered
assigns, the principal sum of ______________ Dollars on February 1, 2003.
--------
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
In Witness Whereof, Sterling Software, Inc. has caused this instrument to
be executed in its corporate name by a facsimile signature of its President and
its Secretary and has caused the facsimile of its corporate seal to be affixed
hereunto or imprinted hereon.
This Debenture is convertible as specified on the other side of this
Debenture. Additional provisions of this Debenture are set forth on the other
side of this Debenture.
STERLING SOFTWARE, INC.
By:
---------------------
President
[SEAL]
Attest:
By:
---------------------
Secretary
Trustee's Certificate of
Authentication:
This is one of the Securities
referred to in the within-
mentioned Indenture.
Bank of America Texas, National Association
as Trustee
By:
---------------------
Dated:
A-1
[FORM OF REVERSE SIDE OF SECURITY]
STERLING SOFTWARE, INC.
5 3/4% Convertible Subordinated Debenture due 2003
1. Interest.
--------
Sterling Software, Inc., a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Debenture at the rate per annum
shown above. The Company shall pay interest semi-annually on February 1 and
August 1 of each year, commencing August 1, 1993. Interest on the Debentures
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of first issuance of the Debentures under
the Indenture (as defined below); provided that, if there is not an existing
default in the payment of interest, and if this Debenture is authenticated
between a record date referred to on the face hereof and the next succeeding
interest payment date, interest shall accrue from such interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment.
-----------------
The Company will pay interest on this Debenture (except defaulted interest)
to the person who is the Holder of this Debenture at the close of business on
the January 15 and July 15 next preceding the interest payment date. The Holder
must surrender this Debenture to the Paying Agent to collect payment of
principal. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay principal and interest by its check
payable in such money. It may mail an interest check to the Holder's registered
address.
3. Paying Agent, Registrar and Conversion Agent.
--------------------------------------------
Initially, Bank of America Texas, National Association (the "Trustee") will
act as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar or Conversion Agent without notice to the Holder. The
Company or any of its Subsidiaries may act as Paying Agent, Registrar or
Conversion Agent.
4. Indenture, Limitations.
----------------------
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its 5 3/4% Convertible Subordinated Debentures due 2003
(the "Debentures"), issued under an Indenture dated as of February 2, 1993 (the
"Indenture"), between the Company and the Trustee. The terms of this Debenture
include those stated in the Indenture and those made part of the
A-2
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S)77aaa-77bbbb), as amended by the Trust Indenture Reform Act of 1990 and as
in effect on the date of the Indenture. This Debenture is subject to all such
terms, and the Holder of this Debenture is referred to the Indenture and said
Act for a statement of them.
The Debentures are subordinated unsecured obligations of the Company
limited to up to $115,000,000 aggregate principal amount. The Indenture does not
limit other debt of the Company, secured or unsecured, including Senior
Indebtedness.
5. Optional Redemption.
-------------------
The Debentures may not be redeemed at the option of the Company prior to
February 12, 1996. Thereafter, the Debentures may be redeemed at the Company's
option, in whole or in part, at any time and from time to time. If redeemed
during the period beginning February 12, 1996 through and including January 31,
1997, the redemption price for the Debentures is 104.025% of the principal
amount of the Debentures, together with accrued interest to, but not including,
the redemption date. The redemption prices for Debentures redeemed on or after
February 1, 1997 are as follows (expressed in percentages of principal amount),
together with accrued interest to, but not including, the redemption date:
If redeemed during the 12-month period beginning February 1
Year Percentage Year Percentage
---- ---------- ---- ----------
1997 103.450 2000 101.725
1998 102.875 2001 101.150
1999 102.300 2002 100.575
6. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Debentures to be redeemed at his registered address. Debentures in denominations
larger than $1,000 may be redeemed in part, but only in whole multiples of
$1,000. On and after the redemption date, subject to the deposit with the Paying
Agent of funds sufficient to pay the redemption price, interest ceases to accrue
on Debentures or portions of them called for redemption.
7. Purchase of Debentures at Option of Holder Upon a Change in Control.
-------------------------------------------------------------------
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple thereof) of the Debentures held by such Holder on the
date that is
A-3
40 Business Days after a Change in Control as defined in the Indenture. The
Holder shall have the right to withdraw any Change in Control Purchase Notice by
delivering a written notice of withdrawal to the Paying Agent in accordance with
the terms of the Indenture. The obligation of the Company to pay the Change in
Control Purchase Price will be subject to the terms of agreements relating to
borrowings which constitute Senior Indebtedness.
8. Conversion.
----------
A Holder of a Debenture may convert such Debenture into shares of Common
Stock of the Company at any time prior to maturity; provided that if the
Debenture is called for redemption, the conversion right will terminate at the
close of business on the fifth Business Day immediately preceding the redemption
date for such Debenture (unless the Company shall default in making the
redemption payment when due, in which case the conversion right shall terminate
at the close of business on the date such default is cured and such Debenture is
redeemed); provided, further, that if the Holder of a Debenture presents such
-------- -------
Debenture for redemption prior to the close of business on the fifth Business
Day immediately preceding the redemption date for such Debenture, the right of
conversion shall terminate upon presentation of the Debenture to the Trustee
(unless the Company shall default in making the redemption payment when due, in
which case the conversion right shall terminate on the close of business on the
date such default is cured and such Debenture is redeemed). The initial
conversion price is $28.35 per share, subject to adjustment under certain
circumstances. The number of shares issuable upon conversion of a Debenture is
determined by dividing the principal amount converted by the conversion price in
effect on the conversion date. No payment or adjustment will be made for accrued
interest on a converted Debenture or for dividends or distributions on shares of
Common Stock issued upon conversion of a Debenture. No fractional shares will be
issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the market price (as defined) of the Common Stock on the last trading day
prior to the date of conversion.
To convert a Debenture, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Debenture to the Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Registrar or
the Conversion Agent and (d) pay any transfer or similar tax, if required. If a
Holder surrenders a Debenture for conversion after the close of business on the
record date for the payment of an installment of interest and before the close
of business on the next interest payment date then, notwithstanding such
conversion, the interest payable on such interest payment date shall be paid to
the Holder of such Debenture on such Record Date. In such event, the Debenture
must be accompanied by payment of an amount equal to the interest payable on
such interest payment date on the principal amount of the Debenture or portion
thereof then converted. A
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Holder may convert a portion of a Debenture equal to $1,000 or any integral
multiple thereof.
A Debenture in respect of which a Holder had delivered a Change in Control
Purchase Notice exercising the option of such Holder to require the Company to
purchase such Debenture may be converted only if the Change in Control Purchase
Notice is withdrawn as provided above and in accordance with the terms of the
Indenture.
9. Subordination.
-------------
The indebtedness evidenced by the Debentures is, to the extent and in the
manner provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness of the Company, as defined
in the Indenture. Any Holder by accepting this Debenture agrees to and shall be
bound by such subordination provisions and authorizes the Trustee to give them
effect.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any terms of any instrument relating to the
Senior Indebtedness or any extension or renewal of the Senior Indebtedness.
10. Denominations, Transfer, Exchange.
---------------------------------
The Debentures are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of
or exchange Debentures in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes or other governmental charges that may
be imposed by law or permitted by the Indenture.
11. Persons Deemed Owners.
---------------------
The Holder of a Debenture may be treated as the owner of it for all
purposes.
12. Unclaimed Money.
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to money must look to the Company for
payment.
13. Amendment, Supplement, Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented with the consent of the
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Holders of 66-2/3% in principal amount of the Debentures then outstanding and
any past default or compliance with any provision may be waived in a particular
instance with the consent of the Holders of a majority in principal amount of
the Debentures then outstanding. Without the consent of or notice to any Holder,
the Company and the Trustee may amend or supplement the Indenture or the
Debentures to, among other things, provide for uncertificated Debentures in
addition to or in place of certificated Debentures, or to cure any ambiguity,
defect or inconsistency or make any other change that does not adversely affect
the rights of any Holder.
14. Successor Corporation.
---------------------
When a successor corporation assumes all the obligations of its
predecessor under the Debentures and the Indenture in accordance with the terms
and conditions of the Indenture, the predecessor corporation will be released
from those obligations.
15. Defaults and Remedies.
---------------------
An Event of Default is: default for 30 days in payment of interest on the
Debentures; default in payment of principal on the Debentures when due; failure
by the Company for 30 days after notice to it to comply with any of its other
agreements contained in the Indenture or the Debentures; certain events of
bankruptcy, insolvency or reorganization of the Company or any of its Material
Subsidiaries; and certain defaults on other indebtedness. If an Event of Default
(other than as a result of certain events of bankruptcy, insolvency or
reorganization), occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Debentures then outstanding may declare all
unpaid principal of an accrued interest to the date of acceleration on the
Debentures then outstanding to be due and payable immediately, all as and to the
extent provided in the Indenture. If an Event of Default occurs as a result of
certain events of bankruptcy, insolvency or reorganization, all unpaid principal
of and accrued interest on the Debentures then outstanding shall become due and
payable immediately without any declaration or other act on the part of the
Trustee or any Holder, all as and to the extent provided in the Indenture.
Holders may not enforce the Indenture or the Debentures except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Debentures. Subject to certain limitations,
Holders of a majority in principal amount of the Debentures then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company is required to file periodic reports with the
Trustee as to the absence of default.
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16. Trustee Dealings with the Company.
---------------------------------
The Trustee, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Company or an Affiliate of
the Company, and may otherwise deal with the Company or an Affiliate of the
Company, as if it were not the Trustee.
17. No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Debentures or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. The Holder of this Debenture by
accepting this Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issue of this Debenture.
18. Discharge Prior to Maturity.
---------------------------
If the Company deposits with the Trustee or the Paying Agent money or U.S.
Government Obligations sufficient to pay the principal of and interest on the
Debentures to maturity, the Company will be discharged from the Indenture except
for certain Sections thereof.
19. Authentication.
--------------
This Debenture shall not be valid until the Trustee or an authenticating
agent signs the certificate of authentication on the other side of this
Debenture.
20. Abbreviations and Definitions.
-----------------------------
Customary abbreviations may be used in the name of Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
All capitalized terms used in this Debenture and not specifically defined
herein are defined in the Indenture and are used herein as so defined.
21. Indenture to Control.
--------------------
In the case of any conflict between the provisions of this Debenture and
the Indenture, the provisions of the Indenture shall control.
The Company will furnish to any Holder, upon written request and without
charge, a copy of the Indenture. Requests may be made to: Sterling Software,
Inc., 0000 X. Xxxxxxx Xxxxxxxxxx,
X-0
Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Chief Financial Officer.
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ASSIGNMENT FORM
To Assign this Debenture, fill in the form below:
I or we assign and transfer this Debenture to
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
x x
x x
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
------------------------------------------------------
agent to transfer this Debenture on the books of the
Company. The Agent may substitute another to act for him.
Date: -----------------------------------------------
*
Your signature: -------------------------------------
(Sign exactly as your name appears on
the other side of this Debenture)
*
------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Debenture)
*Signature guaranteed by:
------------------------------------------------------
BY: -------------------------------------------------
--------------
*The signature must be guaranteed by a bank, a trust company
or a member firm of the New York Stock Exchange.
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Company,
check the box:
xxxxx
x x
xxxxx
To convert only part of this Debenture, state the amount:
xxxxxxxxxxxxxxxxxxxxxxx
x x
x x
xxxxxxxxxxxxxxxxxxxxxxx
If you want the stock certificate made out in another person's
name, fill in the form below:
xxxxxxxxxxxxxxxxxxxxxxx
x x
x x
xxxxxxxxxxxxxxxxxxxxxxx
(insert other person's soc. sec. or tax I.D. no.)
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Print or type other person's name, address and zip code)
Date:
-----------------------------------------------
*
Your Signature:
-------------------------------------
(Sign exactly as your name appears on
the other side of this Debenture)
*
------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Debenture)
*Signature guaranteed by:
------------------------------------------------------
By:
-------------------------------------------------
--------------
*The signature must be guaranteed by a bank, a trust company
or a member firm of the New York Stock Exchange.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Debenture purchased by the
Company pursuant to Section 3.7 of the Indenture, check the box:
xxxxx
x x
xxxxx
If you want to elect to have only part of this Debenture purchased
by the Company pursuant to Section 3.7 of the Indenture, state the amount:
$
------------
Date: Your Signature *
-------------- --------------------------
(Sign exactly as your name
appears on the other side
of this Debenture)
*
--------------------------
(Sign exactly as your name
appears on the other side
of this Debenture)
*Signature guaranteed by:
-----------------------------------
By:
--------------------------------
--------------
*The signature must be guaranteed by a bank, a trust company
or a member firm of the New York Stock Exchange.
