SOUTHWESTERN FINANCIAL CORPORATION
AND
U.S. TRUST COMPANY OF TEXAS, N.A., Trustee
INDENTURE
Dated December 14, 1995
_________________
$40,000,000
CONVERTIBLE SUBORDINATED RESET NOTES DUE 2005
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms Defined . . . . . . . . . . . . . . . . . 1
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities . . . . . . . 11
SECTION 2.2 Execution of Securities . . . . . . . . . . . . . . . . 11
SECTION 2.3 Certificate of Authentication . . . . . . . . . . . . . 12
SECTION 2.4 Form, Denomination and Date of Securities; Payments of
Interest . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.5 Registration, Transfer and Exchange . . . . . . . . . . 13
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.7 CUSIP Number . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.8 Cancellation of Securities; Destruction Thereof . . . . 16
SECTION 2.9 Temporary Securities . . . . . . . . . . . . . . . . . 16
ARTICLE III
COVENANTS OF
THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . . . . 17
SECTION 3.2 Offices for Payments, etc. . . . . . . . . . . . . . . 17
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee . . 18
SECTION 3.4 Paying Agents . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.8 Certificate to Trustee . . . . . . . . . . . . . . . . 19
SECTION 3.9 Securityholders' Lists . . . . . . . . . . . . . . . . 19
SECTION 3.10 Reports by the Issuer . . . . . . . . . . . . . . . . . 20
SECTION 3.11 Offer to Purchase; Interest Rate Reset . . . . . . . . 20
SECTION 3.12 Interest Payment Reserve . . . . . . . . . . . . . . . 21
SECTION 3.13 Waiver of Stay, Extension or Usury Laws . . . . . . . . 22
ARTICLE IV
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default . . . . . . . . . . . . . . . . . . . 22
SECTION 4.2 Collection of Indebtedness by Trustee; Trustee May
Prove Indebtedness . . . . . . . . . . . . . . . . . . 24
SECTION 4.3 Application of Proceeds . . . . . . . . . . . . . . . . 26
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SECTION 4.4 Suits for Enforcement . . . . . . . . . . . . . . . . . 27
SECTION 4.5 Restoration of Rights on Abandonment of Proceedings . . 27
SECTION 4.6 Limitations on Suits by Securityholders . . . . . . . . 28
SECTION 4.7 Powers and Remedies Cumulative: Delay or Omission Not
Waiver of Default . . . . . . . . . . . . . . . . . . . 28
SECTION 4.8 Control by Securityholders . . . . . . . . . . . . . . 29
SECTION 4.9 Waiver of Past Defaults . . . . . . . . . . . . . . . . 29
SECTION 4.10 Unconditional Right of Holders to Receive Payments . . 30
ARTICLE V
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default . . . . . . . . . . . . . . . 30
SECTION 5.2 Certain Rights of the Trustee . . . . . . . . . . . . . 31
SECTION 5.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof . . . . . 32
SECTION 5.4 Trustee and Agents May Hold Securities; Collections,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . 33
SECTION 5.6 Compensation and Indemnification of Trustee and Its
Prior Claim . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.7 Right of Trustee to Rely on Officers' Certificate, etc. 34
SECTION 5.8 Persons Eligible for Appointment as Trustee . . . . . . 34
SECTION 5.9 Resignation and Removal; Appointment of Successor
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.10 Acceptance of Appointment by Successor Trustee . . . . 35
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee . . . . . . . . . . . . . . . . . . 36
SECTION 5.12 Reports by the Trustee . . . . . . . . . . . . . . . . 36
ARTICLE VI
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by Securityholders . . . . . . 37
SECTION 6.2 Proof of Execution of Instruments and of Holding of
Securities; Record Date . . . . . . . . . . . . . . . . 37
SECTION 6.3 Holders to be Treated as Owners . . . . . . . . . . . . 37
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstanding . . . 37
SECTION 6.5 Right of Revocation of Action Taken . . . . . . . . . . 38
ARTICLE VII
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . . . . . 39
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SECTION 7.2 Supplemental Indentures With Consent of Securityholders. 40
SECTION 7.3 Effect of Supplemental Indenture . . . . . . . . . . . 41
SECTION 7.4 Documents to Be Given to Trustee . . . . . . . . . . . 41
SECTION 7.5 Notation on Securities in Respect of Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 When Issuer May Merge, Etc. . . . . . . . . . . . . . . 42
SECTION 8.2 Successor Corporation Substituted . . . . . . . . . . . 42
SECTION 8.3 Opinion of Counsel to Trustee . . . . . . . . . . . . . 43
ARTICLE IX
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 9.1 Satisfaction and Discharge of Indenture . . . . . . . . 43
SECTION 9.2 Application by Trustee of Funds Deposited for Payment
of Securities . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.3 Repayment of Moneys Held by Paying Agent . . . . . . . 45
SECTION 9.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Three Years . . . . . . . . . . . . . . . 45
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability . . . . . . . . 46
SECTION 10.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders . . . . . . . . . . . . . . . . . . 46
SECTION 10.3 Successors and Assigns of Issuer Bound by Indenture . . 46
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders . . . . . . . . . . . . . . . . . . . . 46
SECTION 10.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein . . . . . . . . . . 47
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays . . . . 48
SECTION 10.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939 . . . . . . . . . . . . . . . . . 48
SECTION 10.8 TEXAS LAW TO GOVERN . . . . . . . . . . . . . . . . . . 48
SECTION 10.9 Counterparts . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.10 Effect of Headings . . . . . . . . . . . . . . . . . . 49
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ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Optional Redemption; Prices . . . . . . . . . 49
SECTION 11.2 Notice of Redemption; Partial Redemptions . . . . . . . 49
SECTION 11.3 Payment of Securities Called for Redemption . . . . . . 50
SECTION 11.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption . . . . . . . . . . . . . . . 51
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.1 Securities Subordinated to Senior Indebtedness . . . . 51
SECTION 12.2 No Payment on Securities in Certain Circumstances . . . 51
SECTION 12.3 Payment Over of Proceeds upon Dissolution, Etc. . . . . 53
SECTION 12.4 Payments May Be Paid Prior to Dissolution . . . . . . . 54
SECTION 12.5 Subrogation . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.6 Obligations of the Issuer Unconditional . . . . . . . . 55
SECTION 12.7 Notice to Trustee . . . . . . . . . . . . . . . . . . . 55
SECTION 12.8 Reliance on Judicial Order or Certificate of
Liquidating Agent . . . . . . . . . . . . . . . . . . . 56
SECTION 12.9 Trustee's Relation to Senior Indebtedness . . . . . . . 56
SECTION 12.10 Subordination Rights Not Impaired by Acts or Omissions
of the Issuer or Holders of Senior Indebtedness . . . . 57
SECTION 12.11 Securityholders Authorize Trustee To Effectuate
Subordination of Securities . . . . . . . . . . . . . . 57
SECTION 12.12 This Article XII Not To Prevent Events of Default . . . 57
SECTION 12.13 Trustee's Compensation Not Prejudiced . . . . . . . . . 57
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1 Right of Conversion . . . . . . . . . . . . . . . . . . 58
SECTION 13.2 Issuance of Class A Common Stock and Class B Non-Voting
Common Stock; Time of Conversion . . . . . . . . . . . 59
SECTION 13.3 No Adjustments in Respect of Interest or Dividends . . 59
SECTION 13.4 Taxes and Charges . . . . . . . . . . . . . . . . . . . 60
SECTION 13.5 Trustee and Conversion Agents Not Liable . . . . . . . 60
SECTION 13.6 Fractional Shares . . . . . . . . . . . . . . . . . . . 60
SECTION 13.7 Shares to be Reserved . . . . . . . . . . . . . . . . . 61
SECTION 13.8 Adjustment of Conversion Price . . . . . . . . . . . . 61
iv
THIS INDENTURE, dated as of December 14, 1995, is entered into
between Southwestern Financial Corporation, a Delaware corporation (the
"Issuer"), and U.S. Trust Company of Texas, N.A., a national banking
association (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its
Convertible Subordinated Reset Notes due 2005 (the "Securities") and, to
provide, among other things, for the authentication, delivery and
administration thereof, the Issuer has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, all things necessary to make the Securities, when
executed by the Issuer and authenticated and delivered by the Trustee as in
this Indenture provided, the valid, binding and legal obligations of the
Issuer, and to constitute these presents a valid indenture and agreement
according to its terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchase of the
Securities by the holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the
respective holders from time to time of the Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms
(except as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture which are defined in the
Trust Indenture Act of 1939 or the definitions of which in the Securities
Act of 1933 are referred to in the Trust Indenture Act of 1939 (except as
herein otherwise expressly provided or unless the context otherwise clearly
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined
shall have the meanings given to them in accordance with GAAP (as defined
herein). The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The terms defined in this Article
include the plural as well as the singular.
1
"Acceleration Notice" has the meaning set forth in Section 4.1
hereof.
"Affiliate" means, with respect to any Person, any other
Person that directly or indirectly controls or is controlled by or is under
direct or indirect common control with such specified Person. For purposes
of this definition, "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided, however, that the term
"Affiliate," when used with respect to the Issuer, shall not include its
Wholly Owned Subsidiaries.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act hereunder.
"Business Day" means a day which in New York, New York is
neither a legal holiday nor a day on which banking institutions are
authorized by law or regulation to close.
"Capital Lease Obligation" means, at any time any
determination thereof is to be made, the amount of the liability in respect
of a lease that would at such time be required to be capitalized on a
balance sheet prepared in accordance with GAAP.
"Capital Stock" of any Person means any and all shares,
interests, participations, or other equivalents (however designated) of
such Person's capital stock, and any warrants, options or similar rights to
acquire such capital stock.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government
or issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc.; (iii) commercial paper
maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 from Investors
Service, Inc.; (iv) certificates of deposit or banker's acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $200,000,000; (v) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i)
2
above entered into with any bank meeting the qualifications specified in
clause (iv) above; and (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in
clauses (i) through (v) above, including any of the UST Master Funds the
assets of which are invested entirely in securities of the types described
in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) a majority of the Board of Directors of the Issuer
shall consist of Persons who are not Continuing Directors; or (ii) the
acquisition by any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group") (other than the Permitted
Holders) of the power, directly or indirectly, to vote or direct the voting
of securities having more than 50% of the ordinary voting power for the
election of directors of the Issuer.
"Class A Common Stock" means the Class A Common Stock, par
value $.01 per share, of the Company, and any class or series of Capital
Stock into which such Class A Common Stock thereafter may be changed.
"Class B Non-Voting Common Stock" means the Class B Non-Voting
Common Stock, par value $.01 per share, of the Company, and any class or
series of Capital Stock into which such Class B Non-Voting Common Stock
thereafter may be changed.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however
designated, whether voting or non-voting) of such Person's common stock or
common shares, whether now outstanding or issued after the date of this
Indenture, and includes, without limitation, all series and classes of such
common stock or common shares.
"Continuing Director" means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of the Issuer on
the date of this Indenture, (ii) was nominated for election or elected to
the Board of Directors of the Issuer with the affirmative vote of a
majority of the Continuing Directors who are members of such Board of
Directors at the time of such nomination or election, or (iii) is a
representative of a Permitted Holder.
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular
time, be administered, which office is, at the date as of which this
Indenture is dated, located at 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000-0000, Attention: Corporate Trust Administration.
"Credit Agreement" means the Credit Agreement, dated on or
about December 14, 1995, among the Issuer, the financial institutions
parties thereto as lenders from time to time and The First National Bank of
Chicago, as agent, together with the related
3
documents thereto (including, without limitation, any guarantee agreements
and security documents), in each case as such agreements may be amended
(including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
by way of adding subsidiaries of the Issuer as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
"Debtor" shall mean any of I.C.H. Corporation, a Delaware
corporation, SWL Holding Corporation, a Delaware corporation, Care
Financial Corporation, a Delaware corporation, or Facilities Management
Installation, Inc., a Delaware corporation.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Designated Senior Indebtedness" means (i) Indebtedness under
or in respect of the Credit Agreement and (ii) any other Indebtedness
constituting Senior Indebtedness which, at the time of determination, has
an aggregate principal amount of at least $10,000,000 and is specifically
designated in the instrument evidencing such Senior Indebtedness as
"Designated Senior Indebtedness" by the Company.
"Disposition" shall mean (i) a merger, consolidation or other
business combination in which the Issuer is a surviving entity and the
Issuer's stockholders receive cash or non-cash consideration in exchange
for or in respect of their shares of Capital Stock of the Issuer or (ii)
the sale, lease, conveyance, transfer or other disposition (other than to
any wholly-owned direct or indirect Subsidiary) in any single transaction
or series of related transactions (including a sale and leaseback
transaction) of all or substantially all of the assets of the Issuer, to
any Person or Group other than the Permitted Holders.
"Distribution" means the sale of the Securities to holders of
claims against and/or interests in one or more of the estates of the
Debtors in exchange for such claims or interests in accordance with a plan
of reorganization with respect to the Debtors' jointly administered cases
under Chapter 11 of the United States Bankruptcy Code that has been
confirmed by the United States Bankruptcy Court for the Northern District
of Texas, Dallas Division, has not been stayed pending appeal and becomes
effective in accordance with its terms or an order of such Bankruptcy
Court.
"Disqualified Capital Stock" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as the result of an optional redemption by the
issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
obligation or
4
otherwise, or is redeemable at the sole option of the holder thereof, in
whole or in part, on or prior to the final Maturity of the Securities.
"Distribution Effective Date" shall mean the date upon which
at least 75% of the aggregate principal amount of the outstanding
Securities shall have been distributed to holders of claims against and/or
interests in one or more of the estates of the Debtors in exchange for such
claims or interests in accordance with a plan of reorganization with
respect to the Debtors' jointly administered cases under Chapter 11 of the
United States Bankruptcy Code that has been confirmed by the United States
Bankruptcy Court for the Northern District of Texas, Dallas Division, has
not been stayed pending appeal and becomes effective in accordance with its
terms or an order of such Bankruptcy Court.
"Effective Registration" means that the Issuer shall have
filed and caused to become effective under the Securities Act a
registration statement for the sale of the Securities by the Holders.
"Event of Default" means any event or condition specified as
such in Section 4.1 that shall have continued for the period of time, if
any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"GAAP" or "generally accepted accounting principles" means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other Person (whether
arising by virtue of participation arrangements, the grant of any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (ii) entered into
for the purpose of assuring the obligor of such Indebtedness in any other
manner of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business. The
5
amount of a Guarantee shall be deemed to be the maximum amount of the
Indebtedness guaranteed for which the guarantor could be held liable under
such Guarantee.
"Holder", "holder of Securities", "Securityholder" or other
similar terms means the registered holder of any Security.
"Indebtedness" means, with respect to any Person, (a) any
liability of such Person (i) for borrowed money under any senior bank
facility or publicly-offered debt of such Person, or under any
reimbursement obligation relating to a letter of credit, bankers'
acceptance or note purchase facility, whether or not evidenced by a bond,
note, debenture or similar instrument (including a purchase money
obligation), or for the balance deferred and unpaid of the purchase price
for any property (but not any such balance that constitutes a trade payable
in the ordinary course of business), or (ii) for the payment of money
relating to a lease that is required to be classified as a Capital Lease
Obligation in accordance with GAAP; and (b) any liability of others
described in clause (a) that such Person has Guaranteed, that is recourse
to such Person or that is otherwise the legal liability of such Person.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended
or supplemented.
"Interest Payment Date" means the dates specified in the
Security as the fixed date on which an installment of interest on the
Securities is due and payable.
"Interest Swap Obligations" means the obligations of any
Person under any interest rate swap agreement, interest rate cap agreement
or other financial agreement or arrangement designed to protect the Issuer
or any of its Subsidiaries against fluctuations in interest rates.
"Issue Date" means December 14, 1995.
"Issuer" means Southwestern Financial Corporation, a Delaware
corporation, and, subject to Article Eight, its successors and assigns.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as
therein or herein provided, whether at the date specified in such Security
as the fixed date on which the principal of such Security is due and
payable or by declaration of acceleration, call for redemption or
otherwise.
"Non-Surviving Combination" shall mean any merger,
consolidation or other business combination by the Issuer with one or more
other entities in a transaction in which the Issuer is not the surviving
entity; provided that any such merger, consolidation or other business
6
combination shall not be deemed a Non-Surviving Combination if the holders
of the outstanding Common Stock of the Issuer immediately prior to such
transaction shall hold at least a majority of the outstanding Voting Stock
of the surviving entity immediately after giving effect to such merger,
consolidation or other business combination.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and
other liabilities payable under the documentation governing, or otherwise
relating to, any Indebtedness.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors or the President or any Vice President
(whether or not designated by a number or numbers or a word or words added
before or after the title "Vice President") and by the Treasurer or the
Secretary or any Assistant Secretary of the Issuer and delivered to the
Trustee. Each such certificate shall comply with Section 314 of the Trust
Indenture Act of 1939 and include the statements provided for in Section
10.5.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel who may be an employee of or counsel to the Issuer or who may
be other counsel satisfactory to the Trustee. Each such opinion shall
comply with Section 314 of the Trust Indenture Act of 1939 and include the
statements provided for in Section 10.5, if and to the extent required
hereby.
"outstanding", when used with reference to Securities, shall,
subject to the provisions of Section 6.4, mean, as of any particular time,
all Securities authenticated and delivered by the Trustee under this
Indenture, except
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other than
the Issuer) or shall have been set aside, segregated and held in trust by
the Issuer (if the Issuer shall act as its own paying agent), provided
that if such Securities are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.6 (unless proof satisfactory to
the Trustee is presented that any of such Securities is held by a person
in whose hands such Security is a legal, valid and binding obligation of
the Issuer).
7
"Permitted Holders" means PennCorp Southwest, Inc., a Delaware
corporation, Knightsbridge Capital Fund I, L.P., a Delaware limited
partnership, or any of their respective Affiliates (including, in the case
of Knightsbridge Capital Fund I, L.P., Xxxxx X. Xxxxx and Xxxxxx X. Xxxxxx
and any Person controlled by either or both of them).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust or unincorporated
organization (including any subdivision or ongoing business of any such
entity or substantially all the assets of any such entity, subdivision or
business).
"principal", wherever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and
premium, if any".
"property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person under
generally accepted accounting principles.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Initial Public Offering" means an underwritten
public offering of Common Stock of the Issuer generating gross proceeds to
the Issuer of at least $50.0 million in cash pursuant to an effective
registration statement under the Securities Act which is the initial public
offering of such Common Stock.
"Repurchase Offer" shall have the meaning set forth in Section
3.11 hereof.
"Repurchase Payment" shall have the meaning set forth in
Section 3.11 hereof.
"Repurchase Payment Date" shall have the meaning set forth in
Section 3.11 hereof.
"Representative" for any issue of Indebtedness shall mean the
Person acting as agent, trustee or in a similar representative capacity for
the holders of such Indebtedness, provided that if, and for so long as, any
issue of Indebtedness lacks such a representative, then the Representative
for such issue of Indebtedness shall at all such times constitute the
holders of a majority in outstanding principal amount of the respective
issue of Indebtedness.
"Sales Price" means the closing sales price of the relevant
class of Common Stock (or if no sale price is reported, the average of the
high and low bid prices) as reported by the principal national or regional
stock exchange on which such class of Common Stock is listed or,
8
if such class of Common Stock is not listed on a national or regional stock
exchange, as reported by the Nasdaq Stock Market or, if not so reported,
then the average of the bid and asked prices for such class of Common Stock
as reported by the National Quotation Bureau Incorporated or, if not so
reported, the fair market value per share for such class of Common Stock as
determined in good faith by the Board of Directors.
"SEC" means the Securities and Exchange Commission or any
successor agency thereto.
"Security" or "Securities" means the securities described in
the first recital hereof and as described herein and on the forms
contemplated by Exhibit A hereto and authenticated and issued under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means (i) at any time prior to the
consummation of the Repurchase Offer or a Qualified Initial Public
Offering, the principal of, premium, if any, interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at a
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of, and all monetary obligations of every nature
under, (x) the Credit Agreement, including without limitation, obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities, (y) all Interest Swap Obligations
and (z) any Indebtedness incurred in an underwritten public offering to
refinance any portion of the Credit Agreement, including all accrued and
unpaid interest thereon, prepayment penalties and premiums, and all other
amounts arising in respect thereof, and (ii) at any time after the
consummation of the Repurchase Offer or a Qualified Initial Public
Offering, any Indebtedness of the Issuer (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided
for in the documentation with respect thereto, whether or not such interest
is an allowed claim under applicable law), whether outstanding on the Issue
Date or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities;
provided, however, that notwithstanding anything hereinabove to the
contrary, Senior Indebtedness shall not include any of the following
amounts (whether or not constituting Indebtedness as defined in this
Indenture): (i) any Indebtedness of the Issuer to a Subsidiary of the
Issuer; (ii) Indebtedness and other amounts owing to trade creditors
incurred in connection with obtaining goods, materials or services; and
(iii) any liability for federal, state, local or other taxes owed or owing
by the Issuer.
"Significant Subsidiary" shall have the meaning assigned to
that term under Regulation S-X of the Securities Act, as in effect on the
Issue Date.
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"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of
such Person or a combination thereof.
"Trigger Event" shall mean any of the following events: (i) a
Qualified Initial Public Offering; (ii) a Change of Control; (iii) a
Disposition; or (iv) a Non-Surviving Combination.
"Trust Indenture Act of 1939" means the Trust Indenture Act of
1939 as in force at the date as of which this Indenture was originally
executed, except until qualification of the Indenture under the Trust
Indenture Act of 1939, then as of the date of such qualification, and
except to the extent that any subsequent amendment of the Trust Indenture
Act of 1939 shall apply retroactively to this Indenture.
"Trustee" means the entity identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article Five,
shall also include any successor trustee.
"U.S. Government Obligations" means direct obligations of the
United States of America, or any agency or instrumentality thereof, for the
payment of which the good faith and credit of the United States of America
is pledged.
"Voting Stock" means, with respect to any Person, one or more
classes of the Capital Stock of such Person entitled to vote under ordinary
circumstances in the election of directors, managers or trustees of such
Person.
"Warrants" means the warrants to purchase up to 1,785,000
shares of Class A Common Stock issued on the Issue Date.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect
thereof, by (y) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person, all of the outstanding shares of Capital Stock
of which (other than directors' qualifying shares) are at the time directly
or indirectly owned by such Person or by one or more
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Wholly Owned Subsidiaries of such Person or by such Person and one or more
of its Wholly Owned Subsidiaries.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities. Upon
the execution and delivery of this Indenture, or from time to time
thereafter, Securities in an aggregate principal amount not to exceed
$40,000,000 (except as otherwise provided in Section 2.6) may be executed
by the Issuer and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Securities to or upon
the written order of the Issuer, signed by both (a) its Chairman of the
Board of Directors, or any Vice Chairman of the Board of Directors, or its
President or any Vice President (whether or not designated by a number or
numbers or a word or words added before or after the title "Vice
President") and (b) by its Treasurer or any Assistant Treasurer or its
Secretary or any Assistant Secretary without any further action by the
Issuer.
SECTION 2.2 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by both (a) its Chairman of the Board of
Directors or any Vice Chairman of the Board of Directors or its President
or any Vice President (whether or not designated by a number or numbers or
a word or words added before or after the title "Vice President") and
(b) by its Treasurer or any Assistant Treasurer or its Secretary or any
Assistant Secretary, under its corporate seal which may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. The seal of the Issuer may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical 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 duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be signed on behalf of
the Issuer by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date
of the execution and delivery of this Indenture any such person was not
such officer.
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SECTION 2.3 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication
substantially in the form set forth on Exhibit A hereto, executed by the
Trustee by manual signature of one of its authorized officers, shall be
entitled to the benefits of this Indenture or be valid or obligatory for
any purpose. Such certificate by the Trustee upon any Security executed by
the Issuer shall be conclusive evidence that the Security so authenticated
has been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
SECTION 2.4 Form, Denomination and Date of Securities;
Payments of Interest. (a) The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto,
which is part of this Indenture. The Securities shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with
such plans as the officers of the Issuer executing the same may determine
with the approval of the Trustee. Any of the Securities may be issued with
appropriate insertions, omissions, substitutions and variations, and may
have imprinted or otherwise reproduced thereon such legend or legends, not
inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or
with the rules of any securities market in which the Securities are
admitted to trading, or to conform to general usage. All Securities shall
be otherwise substantially identical expect as to denomination and as
provided herein.
Each Security shall be dated the date of its authentication,
shall bear interest from the applicable date and shall be payable on the
dates specified on the face of the form of Security recited above.
The Person in whose name any Security is registered at the
close of business on any record date with respect to any Interest Payment
Date shall be entitled to receive the interest, if any, payable on such
Interest Payment Date notwithstanding any transfer or exchange of such
Security subsequent to the record date and prior to such Interest Payment
Date, except if and to the extent the Issuer shall default in the payment
of the interest due on such Interest Payment Date, in which case such
defaulted interest shall be paid to the Persons in whose names outstanding
Securities are registered at the close of business on a subsequent record
date (which shall be not less than five business days prior to the date of
payment of such defaulted interest) established by notice given by mail by
or on behalf of the Issuer to the holders of Securities not less than 15
days preceding such subsequent record date. The term "record date" as used
with respect to any Interest Payment Date (except a date for payment of
defaulted interest) shall mean if such Interest Payment Date is the first
day of a calendar month, the fifteenth day of the next preceding calendar
month and shall mean, if such interest payment date is the fifteenth day of
a calendar month, the first day of such calendar month, whether or not such
record date is a Business Day.
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(b) Securities shall be issued in the form of
certificated securities in definitive, fully registered form without
interest coupons. All certificated Securities shall be issuable in
denominations of $1,000.00 principal amount and any integral multiple
thereof.
(c) The Securities are being offered and sold by the
Issuer pursuant to the Purchase Agreement, dated as of December 1, 1995, by
and among I.C.H. Corporation, SWL Holding Corporation, Care Financial
Corporation, Facilities Management Installation, Inc., the Issuer,
Southwestern Financial Services Corp., and PennCorp Financial Group, Inc.
(the "Purchase Agreement"). The initial Holder of the Securities issued
pursuant to the Purchase Agreement will receive certificated Securities
bearing the "Restricted Securities Legend" set forth in the form of
Security attached hereto as Exhibit A ("Restricted Securities").
Securities issued under this Indenture shall bear the Restricted Securities
Legend unless removed in accordance with Section 2.5 hereof.
SECTION 2.5 Registration, Transfer and Exchange.
(a) The Issuer will keep at each office or agency to be
maintained for the purpose as provided in Section 3.2 a register or
registers in which, subject to such reasonable regulations as it may
prescribe, it will register, and will register the transfer of, Securities
as in this Article provided. Such register shall be in written form in the
English language or in any other form capable of being converted into such
form within a reasonable time. At all reasonable times such register or
registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any
Security at each such office or agency, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities in authorized denominations for a
like aggregate principal amount.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate
principal amount. Securities to be exchanged shall be surrendered at each
office or agency to be maintained by the Issuer for the purpose as provided
in Section 3.2, and the Issuer shall execute and the Trustee shall
authenticate and deliver in exchange therefor the Security or Securities
which the Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the holder or his attorney duly authorized in writing.
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The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any exchange or registration of transfer of Securities. No service charge
shall be made for any such transaction.
The Trustee shall not be required to exchange or register a
transfer of (a) any Securities for a period of 15 days next preceding the
first mailing of notice of redemption of Securities to be redeemed or
(b) any Securities selected, called or being called for redemption except,
in the case of any Security where public notice has been given that such
Security is to be redeemed in part, the portion thereof not so to be
redeemed.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such transfer or exchange.
(b) If a Holder of a Restricted Security wishes at any
time to transfer such Restricted Security to a Person who wishes to take
delivery thereof in the form of a Restricted Security, such Holder may,
subject to the restrictions on transfer set forth herein and in such
Restricted Security, cause the exchange of such Restricted Security for one
or more Restricted Securities of any authorized denomination or
denominations and of the same aggregate principal amount. Upon receipt by
the Trustee of (1) such Restricted Security, duly endorsed as provided
herein, (2) instructions from such Holder directing the Trustee to
authenticate and deliver one or more Restricted Securities of the same
aggregate principal amount as the Restricted Security to be exchanged, such
instructions to contain the name or names of the designated transferee or
transferees, the authorized denomination or denominations of the Restricted
Securities to be so issued and appropriate delivery instructions, and (3)
if requested by the Issuer, an opinion of counsel to the transferor of such
Restricted Security, in substantially the form of Exhibit B hereto, and
such other certificates as the Issuer may reasonably request, then, upon
direction of the Issuer, the Trustee shall cancel or cause to be cancelled
such Restricted Security and, concurrently therewith, the Issuer shall
execute, and the Trustee shall authenticate and deliver, one or more
Restricted Securities of the same aggregate principal amount, in accordance
with the instructions referred to above.
(c) If Securities are issued upon the transfer, exchange
or replacement of Securities bearing the Restricted Securities Legend and
if a request is made to remove such Restricted Securities Legend, the
Restricted Securities Legend shall not be removed unless (i) there is
delivered to the Issuer and the Trustee such satisfactory evidence, which
may include an opinion of counsel reasonably satisfactory to the Issuer,
that neither the Restricted Securities Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of the Securities Act or, with respect to
Restricted Securities, that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act, (ii) there is an Effective
Registration with respect to the Securities then in effect and there is
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delivered to the Issuer and the Trustee satisfactory evidence that the
Security as to which the Restricted Securities Legend is sought to be
removed has been disposed of in accordance with the Effective Registration
or (iii) there is delivered to the Issuer and the Trustee satisfactory
evidence that the Security as to which the Restricted Securities Legend is
sought to be removed is to be transferred to the prospective Holder in
connection with a Distribution. Upon provision of such satisfactory
evidence in the case of each of clauses (i), (ii) or (iii), the Trustee, at
the direction of the Issuer, shall authenticate and deliver Securities that
do not bear the Restricted Securities Legend.
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Issuer
in its discretion may execute, and upon the written request of any officer
of the Issuer, the Trustee shall authenticate and deliver, a new Security,
bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and
substitution for the Security so apparently destroyed, lost or stolen. In
every case the applicant for a substitute Security shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by them to indemnify and defend
and to save each of them harmless and, in every case of destruction, loss
or theft evidence to their satisfaction of the apparent destruction, loss
or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Security which has matured or is about to mature,
or has been called for redemption in full, shall become mutilated or
defaced or be apparently destroyed, lost or stolen, the Issuer may, instead
of issuing a substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Security), if the applicant for such payment shall furnish to the Issuer
and to the Trustee and any agent of the Issuer or the Trustee such security
or indemnity as any of them may require to indemnify and defend and to save
each of them harmless from all risks, however remote, and, in every case of
apparent destruction, loss or theft, the applicant shall also furnish to
the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to their satisfaction of the apparent destruction, loss or theft
of such Security and of the ownership thereof.
Every substitute Security issued pursuant to the provisions of
this Section by virtue of the fact that any Security is apparently
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the apparently destroyed, lost or
stolen Security shall be at any time enforceable by anyone and shall be
entitled to all the benefits of (but shall be subject to all the
limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities duly authenticated and
delivered hereunder. All
15
Securities shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, or apparently
destroyed, lost or stolen Securities and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.7 CUSIP Number. The Issuer in issuing the
Securities may use a "CUSIP" number, and if so, the Trustee shall use the
CUSIP number in notices of redemption or exchange as a convenience to
Holders; provided that no representation is hereby deemed to be made by the
Trustee as to the correctness or accuracy of the CUSIP number printed in
the notice or on the Securities, and that reliance may be placed only on
the other identification numbers printed on the Securities.
SECTION 2.8 Cancellation of Securities; Destruction Thereof.
All Securities surrendered for payment, conversion, redemption,
registration of transfer or exchange, if surrendered to the Issuer, any
conversion agent or any agent of the Issuer or the Trustee, shall be
delivered to the Trustee for cancellation or, if surrendered to the
Trustee, shall be cancelled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall deliver cancelled Securities held by it to
the Issuer. If the Issuer shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.9 Temporary Securities. Pending the preparation of
definitive Securities, the Issuer may execute and, pursuant to a written
order of the Issuer in accordance with Section 2.1, the Trustee shall
authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to
the Trustee). Temporary Securities shall be issuable as registered
Securities without coupons, of any authorized denomination, and
substantially in the form of the definitive Securities but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of
the Trustee. Temporary Securities may contain such reference to any
provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities. Without unreasonable delay
the Issuer shall execute and shall furnish definitive Securities and
thereupon temporary Securities may be surrendered in exchange therefor
without charge at each office or agency to be maintained by the Issuer for
the purpose pursuant to Section 3.2, and the Trustee shall authenticate and
deliver in exchange for such temporary Securities a like aggregate
principal amount of definitive Securities of authorized denominations.
Until so exchanged the
16
temporary Securities shall be entitled to the same benefits under this
Indenture as definitive Securities.
The Issuer will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
ARTICLE III
COVENANTS OF
THE ISSUER
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be
paid the principal of, and interest on, each of the Securities at the place
or places, at the respective times and in the manner provided in the
Securities. Each installment of interest on the Securities may be paid by
mailing checks for such interest payable to or upon the written order of
the holders of Securities entitled thereto as they shall appear on the
registry books of the Issuer. To the extent the principal of, any interest
on, the redemption price of or the Repurchase Price with respect to the
Securities or any portion thereof is to be paid through the Trustee or the
paying agent, the Issuer covenants and agrees that it will transfer
immediately available funds in the aggregate amount of each such payment to
the Trustee or paying agent, as the case may be, so that the Trustee or
paying agent, as the case may be, shall have received such immediately
available funds in its designated account by no later than 11:00 a.m., New
York, New York time, on the date on which such payment is to be made.
SECTION 3.2 Offices for Payments, etc. So long as any of the
Securities remain outstanding, the Issuer will maintain in the City of New
York the following: (a) an office or agency where the Securities may be
presented for payment or repurchase, (b) an office or agency where the
Securities may be presented for registration of transfer and for exchange
as in this Indenture provided, (c) an office or agency where the Securities
may be presented for conversion and (d) an office or agency where notices
and demands to or upon the Issuer in respect of the Securities or this
Indenture may be served. The Issuer will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. The Issuer hereby initially designates the designated
office of the Trustee at the Borough of Manhattan in the City of New York,
State of New York, or such other location as the Issuer may designate upon
notice from the Trustee, as the office or agency for each such purpose. In
case the Issuer shall fail to maintain any such office or agency or shall
fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at
the Corporate Trust Office.
17
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 5.9, a
successor Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.4 Paying Agents. The paying agent will initially
be the Trustee. Whenever the Issuer shall appoint a paying agent other
than the Trustee, it will cause such paying agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section,
(a) that it will hold all sums received by it as such
agent for the payment of the principal of or interest on the Securities,
any redemption price, or Repurchase Payment (whether such sums have been
paid to it by the Issuer or by any other obligor on the Securities) in
trust for the benefit of the holders of the Securities or of the Trustee,
(b) that it will give the Trustee notice of any failure
by the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of or interest on the Securities, any redemption
price, or Repurchase Payment when the same shall be due and payable, and
(c) pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in clause (b) above.
The Issuer will, prior to each due date of the principal of or
interest on the Securities, deposit with the paying agent a sum sufficient
to pay such principal or interest, and (unless such paying agent is the
Trustee) the Issuer will promptly notify the Trustee of any failure to take
such action.
If the Issuer shall act as its own paying agent, it will, on
or before each due date of the principal of or interest on the Securities,
set aside, segregate and hold in trust for the benefit of the holders of
the Securities or of the Trustee a sum sufficient to pay such principal or
interest so becoming due. The Issuer will promptly notify the Trustee of
any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained. Upon such payment to the Trustee,
the relevant paying agent, if any, shall be released from any liability
with respect to such sums.
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Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are subject to
the provisions of Sections 9.3 and 9.4.
SECTION 3.5 Existence. Subject to Article VIII, the Issuer
shall do or cause to be done all things reasonably necessary to preserve
and keep in full force and effect its existence, rights (charter and
statutory) and franchises; provided, however, that the Issuer shall not be
required to preserve any such right or franchise if the Board of Directors
shall determine that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 3.6 Maintenance of Properties. The Issuer shall use
its reasonable efforts to cause all material properties operated by the
Issuer or any Subsidiary and used or useful in the conduct of the business
of the Issuer or such Subsidiary to be maintained and kept in good
condition, repair and working order (reasonable wear and tear excepted) and
will cause to be made all necessary repairs and replacements thereof, all
as in the judgment of the Issuer may be necessary so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 3.6
shall prevent the Issuer from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal, in the judgment of the Issuer, would not have a
material adverse effect on the Issuer and its Subsidiaries taken as a
whole.
SECTION 3.7 Payment of Taxes and Other Claims. Except with
respect to items deemed by the Issuer to be immaterial, the Issuer shall
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges
levied or imposed upon the Issuer or any Subsidiary or upon the income,
profits or property of the Issuer or any Subsidiary and (b) all lawful
claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Issuer or any Subsidiary; provided,
however, that the Issuer shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good
faith.
SECTION 3.8 Certificate to Trustee. The Issuer will furnish
to the Trustee on or before April 1 in each year (beginning with April 1,
1996) a brief certificate (which need not comply with Section 10.5) from
the principal executive, financial or accounting officer of the Issuer as
to his or her knowledge of the Issuer's compliance with all conditions and
covenants under the Indenture (such compliance to be determined without
regard to any period of grace or requirement of notice provided under the
Indenture).
SECTION 3.9 Securityholders' Lists. If and so long as the
Trustee shall not be the Security registrar, the Issuer will furnish or
cause to be furnished to the Trustee a list in such form as the Trustee may
reasonably require of the names and addresses of the Holders of the
19
Securities pursuant to Section 312 of the Trust Indenture Act (a) semi-
annually not more than 15 days after each record date for the payment of
semi-annual interest on the Securities, as hereinabove specified, as of
such record date, and (b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such request as
of a date not more than 15 days prior to the time such information is
furnished. The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of
the Holders of the Securities contained in the most recent list furnished
to it as provided by the foregoing sentence or maintained by the Trustee in
its capacity as the Security registrar, if so acting. The Trustee may
destroy any list furnished to it as provided by the first sentence of this
Section 3.4 upon receipt of a new list so furnished.
SECTION 3.10 Reports by the Issuer. The Issuer covenants to
file with the Trustee, within 15 days after the Issuer is required to file
the same with the SEC, copies of the annual reports and of the information,
documents, and other reports, if any, which the Issuer may be required to
file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange
Act.
SECTION 3.11 Offer to Purchase; Interest Rate Reset. (a) On
June 15, 1997, the Issuer, in its sole discretion, shall either (i) offer
to each Holder of Securities the right to require the Issuer to repurchase
all or any part (equal to $1,000.00 or an integral multiple thereof) of
such Holder's Securities as described below (the "Repurchase Offer") at a
purchase price equal to 100% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (the
"Repurchase Payment") or (ii) reset the interest rate per annum borne by
the Securities as provided in the Securities. If the Issuer elects to make
the Repurchase Offer, the Issuer shall send, by first class mail, a notice
to each Holder, with a copy to the Trustee, which notice shall govern the
terms of the Repurchase Offer. Such notice shall state: (1) that the
Repurchase Offer is being made pursuant to this Section 3.11 and that all
Securities tendered will be accepted for payment; (2) the purchase price
and the purchase date, which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed (the "Repurchase Payment
Date"); (3) that any Security not tendered will continue to accrue
interest; (4) that, unless the Issuer defaults in the payment of the
Repurchase Payment, all Securities accepted for payment pursuant to the
Repurchase Offer shall cease to accrue interest after the Repurchase
Payment Date; (5) that Holders electing to have any Securities purchased
pursuant to a Repurchase Offer will be required to surrender the
Securities, properly endorsed for transfer together with such customary
documents as the Company may reasonably request, to the paying agent at the
address specified in the notice prior to the close of business on the
Business Day preceding the Repurchase Payment Date; (6) that Holders will
be entitled to withdraw their election if the paying agent receives, not
later than the close of business on the Fifth Business Day preceding the
Repurchase Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
Securities delivered for purchase, and a statement that such Xxxxxx is
withdrawing his election to have such Securities purchased;
20
and (7) that Holders whose Securities are being purchased only in part will
be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be
equal to $1,000.00 in principal amount or an integral multiple thereof. If
all Securities properly tendered are not purchased pursuant to the
Repurchase Offer, then the interest rate per annum borne by the Securities
not so purchased shall be reset as provided in the Securities. The Issuer
shall comply with the requirements of the Exchange Act and any other
securities laws and regulations to the extent such laws and regulations are
applicable to the Repurchase Offer. To the extent such requirements
conflict with the provisions of this Indenture relating to a Repurchase
Offer, the Issuer shall comply with such requirements and be deemed not to
have breached its obligations relating to such Repurchase Offer by virtue
thereof. If the Issuer elects to make the Repurchase Offer and thereupon
purchases in accordance with the terms hereof all Securities properly
tendered in respect of such Repurchase Offer, it shall have no obligation
to reset the interest rate on the Securities; conversely, if the Issuer
elects to reset the interest rate on the Notes, it shall have no obligation
to make the Repurchase Offer.
(b) On the Repurchase Payment Date, the Issuer will, to
the extent lawful, (1) accept for payment Securities or portions thereof
validly tendered pursuant to the Repurchase Offer, (2) deposit with the
paying agent an amount equal to the Repurchase Payment in respect of all
Securities or portions thereof so tendered, and (3) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an
Officers' Certificate identifying the Securities or portions thereof
tendered to the Issuer. The paying agent shall promptly mail to each
Holder of Securities so accepted payment in an amount equal to the
Repurchase Payment for such Securities, and the Trustee shall promptly
authenticate and mail to each Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered, if any;
provided, however, that each such new Security shall be in a principal
amount of $1,000.00 or an integral multiple thereof. The Issuer will
publicly announce the results of the Repurchase Offer on or as soon as
practicable after the Repurchase Payment Date.
(c) If the notice of a Repurchase Offer shall not have
been mailed on or before June 15, 1997 as provided in clause (a), then the
interest rate per annum borne by the Securities will be reset as provided
in the Securities.
SECTION 3.12 Interest Payment Reserve. (a) The Issuer shall,
at all times prior to and including December 15, 1998, maintain cash and
Cash Equivalents in an amount determined in good faith by the Board of
Directors to be sufficient to satisfy the remaining interest payment
obligations of the Issuer to and including December 15, 1998 with respect
to the Securities then remaining outstanding (using an interest rate of 7%
per annum, whether or not the interest rate on the Securities is reset as
provided in Section 3.11(a) above).
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(b) Upon the conversion of any Securities pursuant to
Article XIII, the maintenance of that amount of cash and Cash Equivalents
allocable to the converted Securities pursuant to the foregoing sentence
shall no longer be required to be maintained by the Issuer pursuant to this
Section 3.12.
SECTION 3.13 Waiver of Stay, Extension or Usury Laws. The
Issuer covenants (to the extent it may lawfully do so) that it will not at
any time insist upon, plead, or in any manner whatsoever claim, and will
resist and oppose any all efforts to be compelled to take the benefit or
advantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive the Issuer from paying all or any portion of the
principal of or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it
may lawfully do so) the Issuer hereby waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any such 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.
ARTICLE IV
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default. In case one or more of the following Events
of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body) shall have
occurred and be continuing, that is to say:
(a) default in the payment of any installment of interest
upon any of the Securities as and when the same shall become due and
payable, and continuance of such default for a period of 30 days, whether
or not such payment is prohibited by Article XII; or
(b) default in the payment of all or any part of the
principal on any of the Securities as and when the same shall become due
and payable, either at maturity, upon any redemption, by declaration or
otherwise, whether or not such payment is prohibited by Article XII; or
(c) (i) failure on the part of the Issuer to observe or
perform any of the covenants or agreements described in Section 3.11 or
Section 8.1 or (ii) failure on the
22
part of the Issuer duly to observe or perform any other of the covenants or
agreements on the part of the Issuer in the Securities or contained in this
Indenture for a period of 30 days after the date on which written notice
specifying such failure, stating that such notice is a "Notice of Default"
hereunder and demanding that the Issuer remedy the same, shall have been
given by registered or certified mail, return receipt requested, to the
Issuer by the Trustee, or to the Issuer and the Trustee by the holders of
at least 40% (25% on and after the Distribution Effective Date) in
aggregate principal amount of the Securities at the time outstanding; or
(d) default with respect to any Indebtedness of the
Issuer or any Subsidiary, as a result of which the maturity of such
Indebtedness has been accelerated prior to its stated maturity, and the
principal amount of such Indebtedness exceeds $10.0 million in the
aggregate; or
(e) any final judgments rendered against the Issuer
and/or any Significant Subsidiary aggregating in excess of $10.0 million
and (x) any creditor has commenced any enforcement proceeding upon any
such judgment and (y) any such judgment remains undischarged or unstayed
for 60 days; or
(f) by the filing against the Issuer or any Significant
Subsidiary of a petition commencing an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer or any
Significant Subsidiary or for any substantial part of the property of the
Issuer or ordering the winding up or liquidation of its affairs, and such
petition shall not be dismissed or stayed pending appeal within 60 days;
or
(g) the Issuer or any Significant Subsidiary shall
commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Issuer or any Significant Subsidiary or for any substantial part of the
property of the Issuer, or the Issuer or any Significant Subsidiary shall
make any general assignment for the benefit of creditors,
then, and in each and every such case (other than an Event of Default with
respect to the Issuer specified in Section 4.1(f) or 4.1(g) above), either
the Trustee or the holders of at least 40% (25% on and after the
Distribution Effective Date) in aggregate principal amount of the
Securities then outstanding hereunder, by notice in writing to the Issuer,
or to the Issuer and to the Trustee in the event of action taken by the
holders of the requisite percentage of the Securities, specifying
23
the respective Event of Default and that it is a "Notice of Acceleration"
(the "Acceleration Notice"), may declare the entire principal amount,
together with interest accrued and unpaid on the Securities, to be due and
payable immediately, and the same shall become immediately due and payable;
provided the Trustee shall not be charged with knowledge of any default or
on Event of Default under Section 4.1(d) or (e) above unless written notice
thereof shall have been given to the Trustee by the Issuer or a
Representative of any issue of Indebtedness.
If an Event of Default with respect to the Issuer specified in
Section 4.1(f) or 4.1(g) occurs, the principal amount together with
interest accrued and unpaid on the Securities shall become and be
immediately due and payable without any declaration or other act on the
part of the Trustee or any Securityholder.
The declaration of acceleration is subject to the condition
that if, at any time after the principal amount of the Securities shall
have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon
all the Securities and the principal of any and all Securities which shall
have become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate
as the rate of interest specified in the Securities, to the date of such
payment or deposit) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith, and if
any and all defaults and Events of Default under the Indenture, other than
the non-payment of the principal of Securities which shall have become due
by acceleration, shall have been cured, waived or otherwise remedied as
provided herein -- then and in every such case the holders of a majority in
aggregate principal amount of the Securities then outstanding, by written
notice to the Issuer and to the Trustee, may waive all defaults and rescind
and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent
default or shall impair any right consequent thereon.
SECTION 4.2 Collection of Indebtedness by Trustee; Trustee
May Prove Indebtedness. The Issuer covenants that (a) in case default
shall be made in the payment of any installment of interest on any of the
Securities when such interest shall have become due and payable, and such
default shall have continued for a period of 30 days or (b) in case default
shall be made in the payment of all or any part of the principal of any of
the Securities when the same shall have become due and payable, whether
upon maturity or upon any redemption or repurchase or by declaration or
otherwise -- then upon demand of the Trustee, the Issuer will pay to the
Trustee for the benefit of the Holders of the Securities the whole amount
that then shall have become due and payable on all such Securities for
principal or interest, as the case may be
24
(with interest to the date of such payment upon the overdue principal and,
to the extent that payment of such interest is enforceable under applicable
law, on overdue installments of interest at the same rate as the rate of
interest specified in the Securities); and in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and
any expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of its negligence
or bad faith.
Until such demand is made by the Trustee, the Issuer may pay
the principal of and interest on the Securities to the registered holders,
whether or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Issuer or other obligor upon the Securities and collect in the manner
provided by law out of the property of the Issuer or other obligor upon the
Securities, wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the
Issuer or any other obligor upon the Securities under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer or
its property or such other obligor, or in case of any other comparable
judicial proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the Issuer or such other
obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Securities, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the Issuer or such other
obligor,
25
(b) unless prohibited by applicable law and regulations,
to vote on behalf of the holders of the Securities in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or person performing
similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Securityholders and of the
Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover all unpaid, reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and
counsel, and all other unpaid expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Securityholder any plan or 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 except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities or the production thereof
on any trial or other proceedings relative thereto, and any such action or
proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee,
each predecessor Trustee and their respective agents, attorneys and
counsel, shall be for the ratable benefit of the holders of the Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture
to which the Trustee shall be a party) the Trustee shall be held to
represent all the holders of the Securities, and it shall not be necessary
to make any holders of the Securities parties to any such proceedings.
SECTION 4.3 Application of Proceeds. Any moneys collected by
the Trustee pursuant to this Article shall be applied, subject to Article
XII, in the following order at the date or dates fixed by the Trustee and,
in case of the distribution of such moneys on account of principal or
interest, upon presentation of the several Securities and stamping (or
otherwise
26
noting) thereon the payment, or issuing Securities in reduced principal
amounts in exchange for the presented Securities if only partially paid, or
upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses, including all
unpaid, reasonable compensation to the Trustee and each predecessor
Trustee and their respective agents, attorneys and counsel and of all
unpaid expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or
bad faith;
SECOND: In case the principal of the Securities shall not
have become and be then due and payable, to the payment of interest in
default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at
the same rate as the rate of interest specified in the Securities, such
payments to be made ratably to the Persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities shall have
become and shall be then due and payable, to the payment of the whole
amount then owing and unpaid upon all the Securities for principal and
interest, with interest upon the overdue principal, and (to the extent
that such interest is provided for in the Securities and has been
collected by the Trustee) upon overdue installments of interest at the
same rate as the rate of interest specified in the Securities; and in
case such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities, then to the payment of interest on
the overdue installments of interest to the extent provided in the
Securities, and then to the payment of interest in default in the order
of maturity of the installments of such interest, and then to the
principal owing and unpaid; and
FOURTH: The remainder, if any, shall be paid to the Issuer or
any other Person lawfully entitled thereto.
SECTION 4.4 Suits for Enforcement. In case an Event of
Default has occurred, has not been waived and is continuing, the Trustee
may in its discretion proceed to protect and enforce the rights vested in
it by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture
or to enforce any other legal or equitable right vested in the Trustee by
this Indenture or by law.
SECTION 4.5 Restoration of Rights on Abandonment of
Proceedings. In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings
27
shall have been discontinued or abandoned for any reason, or shall have
been determined adversely to the Trustee, then and in every such case the
Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no
such proceedings had been taken.
SECTION 4.6 Limitations on Suits by Securityholders. No
holder of any Security shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at law or
in equity or in bankruptcy or otherwise upon or under or with respect to
this Indenture, or for the appointment of a trustee, receiver, liquidator,
custodian or other similar official or for any other remedy hereunder,
unless such holder previously shall have given to the Trustee written
notice of default and of the continuance thereof, as hereinbefore provided,
and unless also the holders of not less than 40% (25% on and after the
Distribution Effective Date) in aggregate principal amount of the
Securities then outstanding shall have made written request upon the
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for 60 days after its receipt
of such notice, request and offer of indemnity shall have failed to
institute any such action or proceedings and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to
Section 4.8; it being understood and intended, and being expressly
covenanted by the taker and holder of every Security with every other taker
and holder and the Trustee, that no one or more holders of Securities shall
have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of
any other holder of Securities, or to obtain or seek to obtain priority
over or preference to any other such holder or to enforce any right under
this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities. For the
protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 4.7 Powers and Remedies Cumulative: Delay or Omission
Not Waiver of Default. Except as provided in Section 2.6, no right or
remedy herein conferred upon or reserved to the Trustee or to the
Securityholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
No delay or omission of the Trustee or of any holder of any of
the Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as
28
aforesaid shall impair any such right or power or shall be construed to be
a waiver of any such Event of Default or an acquiescence therein; and,
subject to Section 4.6, every power and remedy given by this Indenture or
by law to the Trustee or to the Securityholders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or by
the Securityholders.
SECTION 4.8 Control by Securityholders. The holders of a
majority in aggregate principal amount of the Securities at the time
outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee by this Indenture;
provided that such direction shall not be otherwise than in accordance with
law and the provisions of this Indenture and provided further that (subject
to the provisions of Section 5.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of
directors, the executive committee, or a trust committee of directors or
responsible officers of the Trustee shall determine that the action or
proceedings so directed would subject the Trustee to personal liability or
if the Trustee in good faith shall so determine that the actions or
forebearances specified in or pursuant to such direction shall be unduly
prejudicial to the interests of holders of the Securities not joining in
the giving of said direction, it being understood that (subject to Section
5.1) the Trustee shall have no duty to ascertain whether or not such
actions or forebearances are unduly prejudicial to such holders.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the Trustee
and which is not inconsistent with such direction by Securityholders.
SECTION 4.9 Waiver of Past Defaults. Prior to the Maturity
of the Securities as provided in Section 4.1, the holders of a majority in
aggregate principal amount of the Securities at the time outstanding may on
behalf of the holders of all the Securities waive any past default or Event
of Default hereunder and its consequences, except a default or Event of
Default (a) in the payment of principal of or interest on any of the
Securities or (b) in respect of a covenant or provision hereof which cannot
be modified or amended without the consent of the holder of each Security
affected. In the case of any such waiver, the Issuer, the Trustee and the
holders of the Securities shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured, and not to
have occurred for every purpose of this Indenture; but no such
29
waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
SECTION 4.10 Unconditional Right of Holders to Receive
Payments. Notwithstanding any provision in this Indenture to the contrary,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such
Security when due as provided in such Security and this Indenture and to
institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
ARTICLE V
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. The Trustee, prior to the occurrence of
an Event of Default and after the curing or waiving of all Events of
Default that may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct
of his own affairs. The Trustee shall not be charged with knowledge of the
existence of an Event of Default, other than with respect to a payment
default, unless and until the Trustee has actual knowledge of such Event of
Default or the Trustee shall have received notice thereof in writing from
the Issuer or from the holders of a majority in principal amount of the
Securities.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
30
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or responsible
officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the holders of not less than a majority in
principal amount of the Securities at the time outstanding relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if there shall be reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such liability is not reasonably assured to it.
This Section 5.1 is in furtherance of and subject to Sections
315 and 316 of the Trust Indenture Act of 1939.
SECTION 5.2 Certain Rights of the Trustee. In furtherance of
and subject to the Trust Indenture Act of 1939, and subject to Section 5.1:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
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may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice
or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in reliance on such advice or
Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other paper or document
unless requested in writing so to do by the holders of not less than a
majority in aggregate principal amount of the Securities then
outstanding; provided that, if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such examination shall be
paid by the Issuer or, if paid by the Trustee or any predecessor trustee,
shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the Trustee
shall not be responsible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it hereunder.
SECTION 5.3 Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds Thereof. The recitals contained
herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Issuer, and the
32
Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Issuer of any of the Securities or of the
proceeds thereof.
SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee,
in its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and may otherwise deal with the Issuer and receive, collect,
hold and retain collections from the Issuer with the same rights it would
have if it were not the Trustee or such agent.
SECTION 5.5 Moneys Held by Trustee. Subject to the
provisions of Section 9.4 hereof, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes
for which they were received, but need not be segregated from other funds
except to the extent required by mandatory provisions of law. Neither the
Trustee nor any agent of the Issuer or the Trustee shall be under any
liability for interest on any moneys received by it hereunder.
SECTION 5.6 Compensation and Indemnification of Trustee and
Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) and the Issuer
covenants and agrees to pay or reimburse the Trustee and each predecessor
trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable compensation and
the expenses and disbursements of its counsel and of all agents and other
persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Issuer also
covenants to indemnify the Trustee and each predecessor Trustee for, and to
hold each of them harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Indenture or the
trusts hereunder and its duties hereunder, including the costs and expenses
of defending itself against or investigating any claim of liability in the
premises. The obligations of the Issuer under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this
Indenture. Such additional indebtedness shall be a senior claim 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, and the Securities are hereby subordinated to such
senior claim.
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SECTION 5.7 Right of Trustee to Rely on Officers'
Certificate, etc. Subject to Sections 5.1 and 5.2, whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may,
in the absence of negligence or bad faith on the part of the Trustee, be
deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such certificate, in the absence
of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.
SECTION 5.8 Persons Eligible for Appointment as Trustee. The
Trustee hereunder shall at all times be a corporation [or a national
banking association that is part of an affiliated group of banks] having a
combined capital and surplus of at least $100,000,000, and which is
eligible in accordance with the provisions of Section 310(a) of the Trust
Indenture Act of 1939. If such corporation [or national banking
association] publishes reports of condition at least annually, pursuant to
law or to the requirements of a Federal, State or District of Columbia
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation [or national banking
association] shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
SECTION 5.9 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee may at any time resign by giving written notice
of resignation to the Issuer and by mailing notice thereof by first-class
mail to holders of Securities at their last addresses as they shall appear
on the Security register. Upon receiving such notice of resignation, the
Issuer shall promptly appoint a successor Trustee by written instrument in
duplicate, executed by authority of the Board of Directors, one copy of
which instrument shall be delivered to the resigning Trustee and one copy
to the successor Trustee. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee, or any
Securityholder who has been a bona fide holder of a Security or Securities
for at least six months may, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may
deem proper, prescribe and appoint a successor Trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of Section 310(b) of the Trust Indenture Act of 1939, after written
request therefor by the Issuer or by any Securityholder who has been a
bona fide holder of a Security or Securities for at least six months; or
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(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 5.8 and shall fail to resign after written
request therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of
the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of
the Board of Directors of the Issuer, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to Section 315(e) of the Trust Indenture Act of 1939, any
Securityholder who has been a bona fide holder of a Security or Securities
for at least six months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor Trustee.
(c) The holders of a majority in aggregate principal
amount of the Securities at the time outstanding may at any time remove the
Trustee and appoint a successor Trustee by delivering to the Trustee so
removed, to the successor Trustee so appointed and to the Issuer the
evidence provided for in Section 6.1 of the action in that regard taken by
the Securityholders.
SECTION 5.10 Acceptance of Appointment by Successor Trustee.
Any successor Trustee appointed as provided in Section 5.9 shall execute
and deliver to the Issuer and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Issuer or of the
successor Trustee, upon payment of its charges then unpaid, the Trustee
ceasing to act shall, subject to Section 9.4, pay over to the successor
Trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor Trustee all such
rights, powers, duties and obligations. Upon request of any such successor
Trustee, the Issuer shall execute any and all instruments in writing for
more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or
collected by such Trustee to secure any amounts then due it pursuant to the
provisions of Section 5.6.
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Upon acceptance of appointment by a successor Trustee as
provided in this Section 5.10, the Issuer shall mail notice thereof by
first-class mail to the holders of Securities at their last addresses as
they shall appear in the Security register. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 5.9. If the Issuer fails to mail such notice within
10 days after acceptance of appointment by the successor trustee, the
successor Trustee shall cause such notice to be mailed at the expense of
the Issuer.
SECTION 5.11 Merger, Conversion, Consolidation or Succession
to Business of Trustee. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to the
corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided that such corporation shall be eligible under
the provisions of Section 5.8, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities shall
have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor
trustee and deliver such Securities so authenticated; and, in case at that
time any of the Securities shall not have been authenticated, any successor
to the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all
such cases such certificate shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have; provided, that the right to adopt the certificate of
authentication of any predecessor trustee or to authenticate Securities in
the name of any predecessor trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
SECTION 5.12 Reports by the Trustee. Any Trustee's report
required under Section 313(a) of the Trust Indenture Act of 1939 shall be
transmitted on or before the first date for the regular payment of semi-
annual interest on the Securities next succeeding May 15 in each year, and
shall be dated as of a date convenient to the Trustee no more than 60 nor
less than 45 days prior thereto (unless such May 15 is less than 45 days
prior to such interest payment date, in which case such report shall be
(a) so transmitted on or before the second such interest payment date next
succeeding such May 15 and (b) as of a date determined as provided above).
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ARTICLE VI
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders
may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Sections 5.1 and 5.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and of Holding
of Securities; Record Date. Subject to Sections 5.1 and 5.2, the execution
of any instrument by a Securityholder or his agent or proxy may be proved
in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Securities shall be proved by the Security
register or by a certificate of the registrar thereof. The Issuer may set
a record date for purposes of determining the identity of holders of
Securities entitled to vote or consent to any action referred to in Section
6.1, which record date may be set at any time or from time to time by
notice to the Trustee, for any date or dates (in the case of any
adjournment or resolicitation) not more than 60 days nor less than 10 days
prior to the proposed date of such vote or the first solicitation of such
consent, and thereafter, notwithstanding any other provisions hereof, only
holders of Securities of record on such record date shall be entitled to so
vote or give such consent or to withdraw such vote or consent.
SECTION 6.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security
register as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on
account of the principal of and, subject to the provisions of this
Indenture, interest on such Security and for all other purposes; and
neither the Issuer nor the Trustee nor any agent of the Issuer or the
Trustee shall be affected by any notice to the contrary. All such payments
so made to any such person, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
SECTION 6.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the holders of the requisite aggregate
principal amount of Securities have
37
concurred in any direction, consent or waiver under this Indenture,
Securities which are owned by the Issuer or any other obligor on the
Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities shall be disregarded and deemed not to
be outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver only Securities which the
Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Issuer or any other obligor upon the Securities or any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on the Securities. In case of
a dispute as to such right, the advice of counsel shall be full protection
in respect of any decision made by the Trustee in accordance with such
advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 5.1
and 5.2, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that
all Securities not listed therein are outstanding for the purpose of any
such determination.
SECTION 6.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in
Section 6.1, of the taking of any action by the Holders of the percentage
in aggregate principal amount of the Securities specified in this Indenture
in connection with such action, any holder of a Security the serial number
of which is shown by the evidence to be included among the serial numbers
of the Securities the holders of which have consented to such action may,
by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns
such Security. Except as aforesaid any such action taken by the holder of
any Security shall be conclusive and binding upon such holder and upon all
future holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon any such Security. Any action
taken by the holders of the percentage in aggregate principal amount of the
Securities specified in this Indenture in connection with such action shall
be conclusively binding upon the Issuer, the Trustee and the holders of all
the Securities.
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ARTICLE VII
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board
of Directors, and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to
the Trustee as security for the Securities any property or assets;
(b) to evidence the succession of another corporation to
the Issuer, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of the
Issuer pursuant to Article VIII;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection of the
Holders of Securities, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement
of all or any of the several remedies provided in this Indenture as
herein set forth; provided, that in respect of any such additional
covenant, restriction, condition or provision such supplemental indenture
may provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Event of Default
or may limit the remedies available to the Trustee upon such an Event of
Default or may limit the right of the holders of a majority in aggregate
principal amount of the Securities to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in
any supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of the Securities;
(e) to provide for the issuance under this Indenture of
Securities in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such Securities
with Securities issued hereunder in fully registered form, and to make
all appropriate changes for such purpose; and
39
(f) to comply with the requirements of the SEC in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act of 1939.
The Trustee is hereby authorized to join in the execution of
any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the holders of any of
the Securities at the time outstanding, notwithstanding any of the
provisions of Section 7.2.
SECTION 7.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article VI) of
the holders of not less than a majority in aggregate principal amount of
the Securities at the time outstanding, the Issuer, when authorized by a
resolution of the Board of Directors, and the Trustee may, from time to
time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
holders of the Securities; provided, that no such supplemental indenture
shall (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or change the time of payment
of interest thereon, or reduce any amount payable on redemption thereof, or
make the Securities payable in currency other than United States currency,
or impair or affect the right of any Securityholder to institute suit for
the payment thereof, in each case without the consent of each Holder of
Securities affected thereby, (b) alter in a manner adverse to the Holders
the conversion provisions of Article XIII without the consent of each
Holder of Securities affected thereby, (c) reduce the aforesaid percentage
of Securities, the consent of the holders of which is required for any such
supplemental indenture, or amend this Section 7.2, without the consent of
each Holder of Securities affected thereby or (d) alter in a manner adverse
to the Holders the provisions of Section 3.11 without the consent of each
Holder of Securities affected thereby.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the Secretary or an
Assistant Secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders and other documents, if any, required by
Section 6.1, the Trustee shall join with the Issuer in the execution of
such supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such supplemental indenture.
40
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Issuer shall mail a notice thereof by first-class mail to the holders of
Securities at their addresses as they shall appear on the registry books of
the Issuer, setting forth in general terms the substance of such
supplemental indenture. Any failure of the Issuer to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
SECTION 7.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Issuer and the holders of Securities shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 7.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental indenture complies with the applicable provisions of this
Indenture.
SECTION 7.5 Notation on Securities in Respect of Supplemental
Indentures. Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article may
bear a notation in form approved by the Trustee as to any matter provided
for by such supplemental indenture or as to any action taken at any such
meeting. If the Issuer or the Trustee shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities then outstanding.
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ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 When Issuer May Merge, Etc. The Issuer may not
consolidate with, merge with or into, or transfer sell, assign, lease,
convey or otherwise dispose (collectively, "transfer") of all or
substantially all of its assets (whether as an entirety or substantially as
an entirety in one transaction or a series of related transactions) to any
Person unless:
(a) the Issuer shall be the continuing Person, or the
Person (if other than the Issuer) formed by such consolidation or into
which the Issuer is merged or to which properties and assets of the
Issuer are transferred shall be a solvent business entity organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume all the obligations of
the Issuer under the Securities and the Indenture in a supplemental
indenture in a form reasonably satisfactory to the Trustee; and
(b) immediately prior to and after giving effect to such
transaction no Default or Event of Default shall have occurred and be
continuing.
Notwithstanding the foregoing, this Section shall not prohibit
a transaction, the principal purpose of which is (as determined in good
faith by the Board of Directors of the Issuer and evidenced by the
resolution thereof) to change the state of incorporation of the Issuer, and
such transaction does not have as one of its purposes the evasion of the
limitations imposed by this Section.
SECTION 8.2 Successor Corporation Substituted. In case of
any such consolidation, merger, sale or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it
had been named herein.
Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Issuer prior to such
succession any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Issuer, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the
officers of the Issuer to the Trustee for authentication, and any
Securities which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All of the
Securities so issued shall in all respects have the same legal rank and
42
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may
be made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance the Issuer or any
successor corporation which shall theretofore have become such in the
manner described in this Article shall be discharged from all obligations
and covenants under this Indenture and the Securities and may be liquidated
and dissolved.
SECTION 8.3 Opinion of Counsel to Trustee. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption,
and any such liquidation or dissolution, complies with the applicable
provisions of this Indenture and that all conditions precedent related to
such transaction and provided for herein have been complied with.
ARTICLE IX
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 9.1 Satisfaction and Discharge of Indenture. (a) If
at any time (i) the Issuer shall have paid or caused to be paid the
principal of and interest on all the Securities outstanding hereunder, as
and when the same shall have become due and payable, or (ii) the Issuer
shall have delivered to the Trustee for cancellation all Securities
theretofore authenticated (other than any Securities which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.6) or (iii) (A) all such Securities not theretofore
delivered to the Trustee for cancellation shall have become due and payable
or are by their terms to become due and payable within one year or are to
be called for redemption under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and (B) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee, as trust
funds, (x) the entire amount in cash (other than moneys repaid by the
Trustee or any paying agent to the Issuer in accordance with Section 9.4),
(y) U.S. Government Obligations maturing as to principal and interest at
such times and in such amounts as will insure the availability of cash or
(z) a combination thereof sufficient to pay at maturity or upon redemption,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification
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thereof delivered to the Trustee, all such Securities not theretofore
delivered to the Trustee for cancellation, including principal and interest
due or to become due to such date of maturity as the case may be, and if,
in any such case, the Issuer shall also pay or cause to be paid all other
sums payable hereunder by the Issuer, then this Indenture shall cease to be
of further effect (except as to (1) rights of registration of transfer and
exchange and the Issuer's right of optional redemption, (2) rights of
Holders to convert the Securities, (3) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Securities, (4) rights of
Holders to receive payments of principal thereof and interest thereon,
(5) the rights, obligations and immunities of the Trustee hereunder and
(6) rights of the Securityholders as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them),
and the Trustee, on demand of the Issuer accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Issuer, shall execute proper instruments acknowledging such satisfaction of
and discharging this Indenture, if:
(A) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to which
the Issuer is a party or by which it is bound; and
(B) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance contemplated by this provision have
been complied with.
The Issuer agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred (including reasonable
counsel fees) and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this
Indenture or the Securities.
(b) The Issuer shall be deemed to have paid and
discharged the entire indebtedness on all Securities outstanding on the
date of the deposit referred to in subparagraph (A) below, and the
provisions of this Indenture with respect to the Securities shall no longer
be in effect (except as to (i) rights of registration of transfer and
exchange and the Issuer's right of optional redemption, (ii) rights of
Holders to convert the Securities, (iii) substitution of apparently
mutilated, defaced, destroyed, lost or stolen Securities, (iv) rights of
Holders to receive payments of principal thereof and interest thereon,
(v) rights, obligations, duties and immunities of the Trustee hereunder and
(vi) rights of the Securityholders as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them)
and the Trustee, at the expense of the Issuer, shall at the Issuer's
request, execute proper instruments acknowledging the same, if
(A) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically
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pledged as security for, and dedicated solely to, the benefit of the
Securityholders (x) cash in an amount, or (y) U.S. Government Obligations,
maturing as to principal and interest at such times and in such amounts as
will insure the availability of cash or (z) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay the principal and interest on all Securities
outstanding on each date that such principal or interest is due and
payable;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to which
the Issuer is a party or by which it is bound;
(C) the Issuer has delivered to the Trustee an Opinion of
Counsel or a ruling of the Internal Revenue Service to the effect that
the Securityholders will not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge
and will be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred; and
(D) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance contemplated by this provision have
been complied with.
SECTION 9.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 9.4, all moneys deposited with
the Trustee pursuant to Section 9.1 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including
the Issuer acting as its own paying agent), to the holders of the
particular Securities for the payment or redemption of which such moneys
have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest; but such money need not be segregated
from other funds except to the extent required by law.
SECTION 9.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture all moneys
then held by any paying agent under the provisions of this Indenture shall,
upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability
with respect to such moneys.
SECTION 9.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Three Years. Any moneys deposited with or paid to the
Trustee or any paying agent for the payment of the principal of or interest
on any Security and not applied but remaining unclaimed for three years
after the date upon which such principal or interest shall have become due
and
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payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee or such
paying agent, and the holder of such Security shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Issuer for any payment
which such holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such moneys shall thereupon
cease.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or
upon any obligation, covenant or agreement contained in this Indenture, or
in any Security, or because of any indebtedness evidenced thereby, shall be
had against any incorporator, as such or against any past, present or
future stockholder, officer or director, as such, of the Issuer or of any
successor, either directly or through the Issuer or any successor, under
any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise, all
such liability being expressly waived and released by the acceptance of the
Securities by the holders thereof and as part of the consideration for the
issue of the Securities.
SECTION 10.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the
Securities, expressed or implied, shall give or be construed to give to any
person, firm or corporation, other than the parties hereto and their
successors and the holders of the Securities, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole
benefit of the parties hereto and their successors and of the holders of
the Securities.
SECTION 10.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agreements in
this Indenture contained by or in behalf of the Issuer shall bind its
successors and assigns, whether so expressed or not.
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or
by the holders of Securities to or on the Issuer may be given or served by
being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the
Issuer is filed by the Issuer with the Trustee) to Southwestern Financial
Corporation, 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx
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York 10151, Attention: Chief Financial Officer. Any notice, direction,
request or demand by the Issuer or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall
be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the
Issuer and Securityholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
SECTION 10.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of
this Indenture, the Issuer shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of
any such application or demand as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to
such particular application or demand, no additional certificate or opinion
need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that
the person making such certificate or opinion has read such covenant or
condition, (b) 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, (c) 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
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
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Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such
officer knows that the certificate or opinion or representations with
respect to the matters upon which his certificate, statement or opinion may
be based as aforesaid are erroneous, or in the exercise of reasonable care
should know that the same are erroneous. Any certificate, statement or
opinion of counsel may be based, insofar as it relates to factual matters
and information in the possession of the Issuer, upon the certificate,
statement or opinion of or representations by an officer or officers of the
Issuer, unless such counsel knows that the certificate, statement or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an
accountant or firm of accountants in the employ of the Issuer, unless such
officer or counsel, as the case may be, knows that the certificate or
opinion or representations with respect to the accounting matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm
is independent.
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays.
If the date of maturity of interest on or principal of the Securities or
the date fixed for redemption of any Security shall not be a Business Day,
then payment of interest or principal need not be made on such date, but
may be made on the next succeeding Business Day with the same force and
effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
SECTION 10.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with another provision
included in this Indenture by operation of Sections 310 to 317, inclusive,
of the Trust Indenture Act of 1939 (an "incorporated provision"), such
incorporated provision shall control.
SECTION 10.8 TEXAS LAW TO GOVERN. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF
TEXAS, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SAID STATE, EXCEPT AS MAY OTHERWISE BE REQUIRED BY MANDATORY PROVISIONS
OF LAW.
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SECTION 10.9 Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 10.10 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Optional Redemption; Prices. The
Issuer at its option may, at any time, redeem all, or from time to time any
part of, the Securities at the redemption prices set forth in the
Securities, together with accrued and unpaid interest to the date fixed for
redemption; provided, however, that no such optional redemption may be
effected prior to December 15, 1998.
SECTION 11.2 Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities to be redeemed as a whole
or in part shall be given by mailing notice of such redemption by first
class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption to such holders of Securities at
their last addresses as they shall appear upon the registry books. Any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives the
notice. Failure to give notice by mail, or any defect in the notice to the
Holder of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any
other Security.
The notice of redemption to each such holder shall specify the
principal amount of each Security held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities, that such redemption is pursuant to the optional redemption
provisions, that interest accrued to the date fixed for redemption will be
paid as specified in said notice, that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue and
that the conversion rights provided by Article XIII hereof terminate at the
close of business on the date fixed for redemption. In case any Security
is to be redeemed in part only the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall state that
on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities in principal amount equal to the
unredeemed portion thereof will be issued.
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The notice of redemption of Securities to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
At least one Business Day prior to the redemption date
specified in the notice of redemption given as provided in this Section,
the Issuer will deposit with the Trustee or with one or more paying agents
(or, if the Issuer is acting as its own paying agent, set aside, segregate
and hold in trust as provided in Section 3.4) an amount of money sufficient
to redeem on the redemption date all the Securities so called for
redemption at the appropriate redemption price, together with accrued
interest to the date fixed for redemption. If less than all the
outstanding Securities are to be redeemed the Issuer will deliver to the
Trustee at least 60 days prior to the date fixed for redemption an
Officers' Certificate stating the aggregate principal amount of Securities
to be redeemed.
If less than all the Securities are to be redeemed, the
Trustee shall select, either pro rata or by such method as the Trustee
shall deem fair and appropriate, securities to be redeemed in whole or in
part. Securities may be redeemed in part in multiples of $1,000.00 only.
The Trustee shall, upon the request of the Issuer, promptly notify the
Issuer in writing of the Securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed. For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption
of Securities shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
SECTION 11.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and
payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date
fixed for redemption, and on and after said date (unless the Issuer shall
default in the payment of such Securities at the redemption price, together
with interest accrued to said date) interest on the Securities or portions
of Securities so called for redemption shall cease to accrue and, except as
provided in Sections 5.5 and 9.4, such Securities shall cease from and
after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right
in respect of such Securities except the right to receive the redemption
price thereof and unpaid interest to the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment
specified in said notice, said Securities or the specified portions thereof
shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for
redemption; provided that any semi-annual payment of interest becoming due
on the date fixed for redemption shall be payable to the holders of such
Securities registered as such on the relevant record date subject to the
terms and provisions of Section 2.4 hereof.
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If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the
rate borne by the Security.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to or
on the order of the holder thereof, at the expense of the Issuer, a new
Security or Securities, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 11.4 Exclusion of Certain Securities from Eligibility
for Selection for Redemption. Securities shall be excluded from
eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Issuer and delivered to the Trustee at least 40
days prior to the last date on which notice of redemption may be given as
being owned of record and beneficially by, and not pledged or hypothecated
by either (a) the Issuer or (b) an entity specifically identified in such
written statement directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer.
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.1 Securities Subordinated to Senior Indebtedness.
The Issuer covenants and agrees and the Trustee and each Holder of the
Securities, by its acceptance thereof, likewise covenants and agrees, that
all Securities shall be issued subject to the provisions of this Article
XII; and the Trustee and each Person holding any Security, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that the payment of all Obligations on the Securities (except
for the payment of fees and expenses of the Trustee and any indemnity under
Section 5.6) by the Issuer shall, to the extent and in the manner herein
set forth, be subordinated and junior in right of payment to the prior
payment in full in cash or Cash Equivalents (or such payment shall be duly
provided for to the satisfaction of the holders of the Senior Indebtedness)
of all Obligations on the Senior Indebtedness; that the subordination is
for the benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness, and that each holder of Senior Indebtedness whether
now outstanding or hereafter created, incurred, assumed or guaranteed shall
be deemed to have acquired Senior Indebtedness in reliance upon the
covenants and provisions contained in this Indenture and the Securities.
SECTION 12.2 No Payment on Securities in Certain
Circumstances. (a) If any default occurs and is continuing in the payment
when due, whether at maturity, upon any redemption, by declaration or
otherwise, of any principal of, interest on or any other amounts owing with
respect to any Senior Indebtedness, no payment of any kind or character
(except (i) in
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Qualified Capital Stock issued by the Issuer to pay interest on the
Securities or issued in exchange for the Securities, (ii) in securities
substantially identical to the Securities issued by the Issuer in payment
of interest accrued thereon or (iii) in securities issued by the Issuer
which are subordinated to the Senior Indebtedness at least to the same
extent as the Securities and having a Weighted Average Life to Maturity at
least equal to the remaining Weighted Average Life to Maturity of the
Securities (the issuance of such subordinated securities to be consented to
by the holders of at least a majority of the outstanding amount of Senior
Indebtedness consisting of each class of Designated Senior Indebtedness
then outstanding, which subordinated securities shall be issued in exchange
for outstanding Securities or to pay interest accrued on outstanding
Securities)) shall be made by the Issuer or any other Person on behalf of
the Issuer with respect to any Obligations on the Securities or to acquire
any of the Securities for cash or property or otherwise. In addition, if
any other event of default occurs and is continuing (or if such an event of
default would occur upon any payment with respect to the Securities or
would arise upon the passage of time as a result of such payment) with
respect to any Designated Senior Indebtedness (as such event of default is
defined in the instrument creating or evidencing such Designated Senior
Indebtedness) and such event of default permits the holders of such
Designated Senior Indebtedness then outstanding to accelerate the maturity
thereof and if the Representative for the respective issue of Designated
Senior Indebtedness gives written notice of the event of default to the
Issuer and the Trustee (a "Default Notice"), then, unless and until all
events of default have been cured or waived or have ceased to exist with
respect to such issue of Designated Senior Indebtedness or the Issuer and
the Trustee receive notice from the Representative for the respective issue
of Designated Senior Indebtedness terminating the Blockage Period (as
defined below), during the 180 days after the delivery of such Default
Notice (the "Blockage Period"), neither the Issuer nor any other Person on
behalf of the Issuer shall make any payment of any kind or character
(except (i) in Qualified Capital Stock issued by the Issuer to pay interest
on the Securities or issued in exchange for the Securities, (ii) in
securities substantially identical to the Securities issued by the Issuer
in payment of interest accrued thereon or (iii) in securities issued by the
Issuer which are subordinated to the Senior Indebtedness at least to the
same extent as the Securities and having a Weighted Average Life to
Maturity at least equal to the remaining Weighted Average Life to Maturity
of the Securities (the issuance of such subordinated securities to be
consented to by the holders of at least a majority of the outstanding
amount of Senior Indebtedness consisting of each class of Designated Senior
Indebtedness then outstanding, which subordinated securities shall be
issued in exchange for outstanding Securities or to pay interest accrued on
outstanding Securities)) with respect to any Obligations on the Securities
or to acquire any of the Securities for cash or property or otherwise.
Notwithstanding anything herein to the contrary, in no event will a
Blockage Period extend beyond 180 days from the date the payment on the
Securities was due and only one such Blockage Period may be commenced
within any 360 consecutive days. For all purposes of this Section 12.2, no
event of default which existed or was continuing on the date of the
commencement of any Blockage Period with respect to the Designated Senior
Indebtedness initiating such Blockage Period shall be, or be made, the
basis for the commencement of a second Blockage Period by the
Representative of such Designated
52
Senior Indebtedness, whether or not within a period of 360 consecutive
days, unless such event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 12.2(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective
amount of Senior Indebtedness held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee
shall be entitled to rely on information regarding amounts then due and
owing on the Senior Indebtedness, if any, received from the holders of
Senior Indebtedness (or their Representatives) or, if such information is
not received from such holders or their Representatives, from the Issuer
and only amounts included in the information provided to the Trustee shall
be paid to the holders of Senior Indebtedness.
Nothing contained in this Article XII shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate
the maturity of the Securities pursuant to Section 4.1 or to pursue any
rights or remedies hereunder; provided that all Senior Indebtedness
thereafter due or declared to be due shall first be paid in full in cash or
Cash Equivalents before the Holders are entitled to receive any payment
with respect to Obligations on the Securities.
SECTION 12.3 Payment Over of Proceeds upon Dissolution, Etc.
(a) Upon any payment or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities, to
creditors upon any liquidation, dissolution, winding-up, assignment for the
benefit of creditors or marshalling of assets of the Issuer or in a
bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Issuer or its property, whether voluntary or
involuntary, all amounts due or to become due upon all Senior Indebtedness
shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of the Senior
Indebtedness, before any payment or distribution of any kind or character
is made on account of any Obligations on the Securities, or for the
acquisition of any of the Securities for cash or property or otherwise.
Upon any such dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution of assets
of the Issuer of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee under
this Indenture would be entitled (other than any payments of fees and
expenses of the Trustee and any indemnity made under Section 5.6), except
for the provisions hereof, shall be paid by the Issuer or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making
such payment or distribution, or by the Holders of the Securities or by the
Trustee under this Indenture if received by them, directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the
payment of Senior
53
Indebtedness remaining unpaid until all such Senior Indebtedness has been
paid in full in cash or Cash Equivalents after giving effect to any
concurrent payment, distribution or provision therefor to or for the
holders of Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness
(whether by or on behalf of the Issuer, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential, set aside or required to be paid to any
receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid
over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Indebtedness or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding
as if such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, shall be received by any Holder
when such payment or distribution is prohibited by Section 12.3(a), such
payment or distribution shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Indebtedness (pro
rata to such holders on the basis of the respective amount of Senior
Indebtedness held by such holders) or their respective Representatives, or
to the trustee or trustees under any indenture pursuant to which any of
such Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of Senior Indebtedness
remaining unpaid until all such Senior Indebtedness has been paid in full
in cash or Cash Equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(d) The consolidation of the Issuer with, or the merger
of the Issuer with or into, another corporation or the liquidation or
dissolution of the Issuer following the conveyance or transfer of all or
substantially all of its assets, to another corporation upon the terms and
conditions provided in Article Five and as long as permitted under the
terms of the Senior Indebtedness shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, assume the Issuer's obligations hereunder in
accordance with Article Five.
SECTION 12.4 Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article XII or elsewhere in this Indenture shall
prevent (i) the Issuer, except under the conditions described in Sections
12.2 and 12.3, from making payments at any time for the purpose of making
payments of principal of and interest on the Securities, or from depositing
with the Trustee any moneys for such payments, or (ii) in the absence of
actual knowledge by the Trustee that a given payment would be prohibited by
Section 12.2 or 12.3, the application by the
54
Trustee of any moneys deposited with it for the purpose of making such
payments of principal of, and interest on, or the redemption price or
Repurchase Payment on, the Securities to the Holders entitled thereto
unless at least one Business Day prior to the date upon which such payment
would otherwise become due and payable, the Trustee shall have received the
written notice provided for in Section 12.2(a) or in Section 12.7. The
Issuer shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Issuer.
SECTION 12.5 Subrogation. Subject to the payment in full in
cash or Cash Equivalents of all Senior Indebtedness, the Holders of the
Securities shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Issuer applicable to the Senior Indebtedness until the
Securities shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Issuer or by or on behalf of the
Holders by virtue of this Article XII which otherwise would have been made
to the Holders shall, as between the Issuer and the Holders of the
Securities, be deemed to be a payment by the Issuer to or on account of the
Senior Indebtedness, it being understood that the provisions of this
Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
SECTION 12.6 Obligations of the Issuer Unconditional.
Nothing contained in this Article XII or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Issuer, its
creditors other than the holders of Senior Indebtedness, and the Holders of
the Securities, the obligation of the Issuer, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
any interest on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of the
Issuer other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Holder of any Security or the
Trustee on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, in respect of cash, property or securities of the Issuer received upon
the exercise of any such remedy.
SECTION 12.7 Notice to Trustee.
The Issuer shall give prompt written notice to the Trustee of any fact
known to the Issuer which would prohibit the making of any payment to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article XII. Regardless of anything to the contrary contained in this
Article XII or elsewhere in this Indenture, the Trustee shall not be
charged with knowledge of the existence of any default or event of default
with respect to any Senior Indebtedness or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until a
trust officer of the Trustee shall have received notice in writing from the
Issuer, or from a holder of Senior Indebtedness or a Representative
therefor, and, prior to the receipt of any such written notice, the
55
Trustee shall be entitled to assume (in the absence of actual knowledge to
the contrary) that no such facts exist.
In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article XII, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amounts of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article
XII, 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 12.8 Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the
Issuer referred to in this Article XII, the Trustee, subject to the
provisions of Article Seven hereof, and the Holders of the Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or the
Holders of the Securities, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XII.
SECTION 12.9 Trustee's Relation to Senior Indebtedness. The
Trustee and any agent of the Issuer or the Trustee shall be entitled to all
the rights set forth in this Article XII with respect to any Senior
Indebtedness which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee or any
such agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its duties,
covenants, responsibilities and obligations as are specifically set forth
in this Article XII, and no implied duties, covenants, responsibilities or
obligations with respect to the holders of Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness.
Whenever a distribution is to be made or a notice given to
holders or owners of Senior Indebtedness, the distribution may be made and
the notice may be given to their Representative, if any.
56
SECTION 12.10 Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce
subordination as provided herein shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Issuer or by
any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Issuer with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or otherwise be
charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee, without
incurring responsibility to the Trustee or the Holders of the Securities
and without impairing or releasing the subordination provided in this
Article XII or the obligations hereunder of the Holders of the Securities
to the holders of the Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness, or otherwise
amend or supplement in any manner Senior Indebtedness, or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness;
(iii) release any Person liable in any manner for the payment or collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Issuer and any other Person.
SECTION 12.11 Securityholders Authorize Trustee To Effectuate
Subordination of Securities. Each Holder of Securities by its acceptance
of such Security authorizes and expressly directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate, as between the holders of Senior Indebtedness and the Holders
of Securities, the subordination provided in this Article XII, and appoints
the Trustee such Holder's attorney-in-fact to act for and on behalf of each
such Holder of Securities for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of the Issuer
(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Issuer, the filing of a claim for the unpaid balance of its Securities and
accrued interest in the form required in those proceedings.
SECTION 12.12 This Article XII Not To Prevent Events of
Default. The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article XII
will not be construed as preventing the occurrence of an Event of Default.
SECTION 12.13 Trustee's Compensation Not Prejudiced. Nothing
in this Article XII will apply to amounts due to the Trustee pursuant to
other sections in this Indenture.
57
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.1 Right of Conversion. Except upon and after the
occurrence of a Trigger Event, the Securities shall not be convertible
prior to December 15, 1997. Except as provided in the immediately
preceding sentence, on and after December 15, 1997, the Holder of any
Security or Securities shall have the right at any time prior to the close
of business on the Business Day prior to Maturity, at his option, to
convert, subject to the terms and provisions of this Article XIII, the
principal of any such Security or Securities (or any portion of the
principal thereof that is an integral multiple of $1,000.00) into fully
paid and nonassessable shares of Class A Common Stock and Class B Non-
Voting Common Stock and such other securities and property as hereinafter
provided at the conversion price of $12.50 per share of Common Stock
(representing an initial conversion rate of 80 shares of Common Stock for
each $1,000 principal amount of Securities), or, in case an adjustment
therein has taken place pursuant to the provisions of Sections 13.8 or
13.9, then at the conversion price as so adjusted (the "Conversion Price").
Any Security or Securities converted into Common Stock pursuant to the
foregoing conversion right shall be entitled to receive Class A Common
Stock and Class B Non-Voting Common Stock in the ratio of three shares of
Class A Common Stock to one share of Class B Non-Voting Common Stock (that
is to say, for each 80 shares of Common Stock initially issuable upon
conversion of each $1,000.00 principal amount of Securities, the Holder
shall receive 60 shares of Class A Common Stock and 20 shares of Class B
Non-Voting Common Stock). With respect to any Security or Securities, or
any portion thereof, which shall be called for redemption pursuant to
Article XI, the right to convert any Security or Securities shall terminate
at the close of business on the date of redemption. The number of shares
of Class A Common Stock and Class B Non-Voting Common Stock, respectively,
into which each $1,000.00 principal amount of the Securities shall be
convertible (calculated as to each conversion to the nearest 1/100th of a
share) shall be determined by dividing $1,000.00 by the Conversion Price
then in effect. Such right shall be exercised by the surrender of the
Security or Securities, the principal of which is so to be converted, to
the Issuer at any time during usual business hours at any office or agency
to be maintained by it in accordance with the provisions of Section 3.2,
with the conversion notice on the reverse of such Security or Securities
completed and manually signed indicating that the Holder elects to convert
such Security or Securities or any portion thereof and specifying the name
or names (with address or addresses) in which a certificate or certificates
evidencing Class A Common Stock and Class B Non-Voting Common Stock are to
be issued and (if so required by the Issuer or the Trustee) by an
instrument or instruments of transfer in form satisfactory to the Issuer
and the Trustee, duly executed by the Holder or his attorney, duly
authorized in writing, and with and transfer tax stamps affixed or funds
provided therefor, if required pursuant to Section 13.4. For convenience,
the conversion of all or a portion, as the case may be, of the principal of
any Security into shares of Class A Common Stock and Class B Non-Voting
Common Stock is hereinafter sometimes referred to as the conversion of such
Security. All
58
Securities surrendered for conversion shall, if surrendered to the Issuer
or any conversion agent, be delivered to the Trustee for cancellation and
cancelled by it or, if surrendered to the Trustee, shall be cancelled by
it; and, subject to the next succeeding sentence, no Security shall be
issued in lieu thereof. In the case of any Security which is converted in
part only, upon such conversion the Issuer shall execute and the Trustee
shall authenticate and deliver to the Holder thereof, at the expense of the
Issuer, a new Security or Securities of authorized denominations in an
aggregate principal amount equal to the unconverted portion of the
principal amount of such Security.
SECTION 13.2 Issuance of Class A Common Stock and Class B
Non-Voting Common Stock; Time of Conversion. As promptly as practicable
after the surrender, as herein provided, of any Security or Securities for
conversion, the Issuer shall deliver or cause to be delivered at any office
or agency to be maintained by it in accordance with the provisions of
Section 3.2 to or upon the written order of the Holder of the Security or
Securities so surrendered a certificate or certificates evidencing the
number of fully paid and nonassessable shares of Class A Common Stock and
Class B Non-Voting Common Stock of the Issuer into which such Security or
Securities (or portion thereof) may be converted in accordance with the
provisions of this Article XIII. Subject to the following provisions of
this paragraph and of Section 13.8, such conversion shall be deemed to have
been made immediately prior to the close of business on the date that such
Security or Securities shall have been surrendered in satisfactory form for
conversion, so that the rights of the Holder as a Holder shall cease with
respect to such Security or Securities (or the portion thereof being
converted) at such time, and the Person or Persons entitled to receive the
shares of Class A Common Stock and Class B Non-Voting Common Stock
deliverable upon conversion of such Security or Securities shall be treated
for all purposes as having become the record holder or holders of such
shares of Common Stock at such time, and such conversion shall be at the
Conversion Price in effect at such time; provided, however, that no such
surrender on any date when the stock transfer books of the Issuer shall be
closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Class A Common Stock and Class B Non-Voting Common
Stock deliverable 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 immediately prior to the close of business on the next succeeding
day on which such stock transfer books are open, and such conversion shall
be deemed to have been made at, and shall be made at the Conversion Price
in effect at such time and on such next succeeding day.
SECTION 13.3 No Adjustments in Respect of Interest or
Dividends. Securities surrendered for conversion during the period from
the close of business on any record date to the opening of business on the
next succeeding Interest Payment Date shall be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Issuer of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of Securities
59
being surrendered for conversion. No such payment shall be required to
accompany Securities called for redemption and surrendered for conversion
during such period. Except as provided above and subject to the last
paragraph of Section 2.4(a), no payment or adjustment shall be made upon
any conversion on account of any interest accrued on the Securities
surrendered for conversion or on account of any dividends on the shares of
Common Stock issued upon conversion.
SECTION 13.4 Taxes and Charges. The issuance of certificates
for shares of Common Stock upon the conversion of Securities shall be made
without charge to the converting Holder of Securities for such certificates
or for any tax in respect of the issuance of such certificates or the
securities represented thereby, and such certificates shall be issued in
the respective names of, or in such names as may be directed by, the
Holders of the Securities converted; provided, however, that the Issuer
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a
name other than that of the Holder of the Security converted, and the
Issuer shall not be required to issue or deliver such certificates unless
and until the Person or Persons requesting the issuance thereof shall have
paid to the Issuer the amount of such tax or shall have established to the
satisfaction of the Issuer that such tax has been paid.
SECTION 13.5 Trustee and Conversion Agents Not Liable. The
Issuer is solely responsible for performing the duties and responsibilities
contained in this Article XIII. Neither the Trustee nor any conversion
agent shall at any time be under any duty or responsibility to any Holder
of Securities to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed,
or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the validity or value (or the kind or amount)
of any shares of Class A Common Stock, Class B Non-Voting Common Stock or
of any securities or cash or other property which may at any time be issued
or delivered upon the conversion of any Security, or makes any
representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Issuer to make
any cash payment or to issue, transfer or deliver any shares of Class A
Common Stock, Class B Non-Voting Common Stock or stock certificates or
other securities or property upon the surrender of any Security for the
purpose of conversion, or, subject to Section 5.1, to comply with any of
the covenants of the Issuer contained in this Article XIII.
SECTION 13.6 Fractional Shares. No fractional shares of
Class A Common Stock or Class B Non-Voting Common Stock or scrip
representing fractional shares shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion
at one time by the same Holder, the number of full shares of Class A Common
Stock and Class B Non-Voting Common Stock issuable upon conversion thereof
shall be computed on
60
the basis of the aggregate principal amount of the Securities or specified
portions thereof so surrendered. Instead of any fractional share of Class
A Common Stock or Class B Non-Voting Common Stock otherwise issuable upon
conversion of any Security or Securities (or specified portions thereof),
the Issuer shall pay a cash adjustment in respect of such fraction in an
amount equal to the same fraction of the Sales Price of the Class A Common
Stock or Class B Non-Voting Common Stock, as appropriate, at the close of
business on the day of conversion. In the absence of a Sales Price for the
appropriate class of Common Stock, the Board of Directors shall in good
faith determine the current market price of such on such basis as it
considers appropriate, taking into account whether there is a Sales Price
with respect to the other class of Common Stock, and such determined
current market price shall be used to calculate the cash adjustment.
SECTION 13.7 Shares to be Reserved. The Issuer shall reserve
out of its authorized but unissued Class A Common Stock and Class B Non-
Voting Common Stock or its Class A Common Stock and Class B Non-Voting
Common Stock held in treasury enough shares of Class A Common Stock and
Class B Non-Voting Common Stock to permit the conversion of all of the
then-outstanding Securities. For the purposes of this Section 13.7, the
full number of shares of Class A Common Stock and Class B Non-Voting Common
Stock then issuable upon the conversion of all then-outstanding Securities
shall be computed as if at the time of computation all outstanding
Securities were held by a single Holder. The Issuer shall from time to
time, in accordance with the laws of the State of Delaware and its
certificate of incorporation, increase the authorized amount of its Class A
Common Stock and Class B Non-Voting Common Stock if at any time the
authorized amount of its Class A Common Stock and Class B Non-Voting Common
Stock remaining unissued shall not be sufficient to permit the conversion
of all the Securities at the time outstanding. If any shares of Class A
Common Stock or Class B Non-Voting Common Stock required to be reserved for
issuance upon conversion of the Securities hereunder require registration
with or approval of any governmental authority under any federal or state
law before the shares may be issued upon conversion, the Issuer will in
good faith and as expeditiously as possible endeavor to cause the shares to
be so registered or approved. All shares of Class A Common Stock and Class
B Non-Voting Common Stock issued upon conversion of the Securities shall be
validly issued, fully paid and nonassessable.
SECTION 13.8 Adjustment of Conversion Price. The Conversion
Price at which the Securities shall be convertible shall be subject after
the Issue Date to adjustment, without duplication, as follows:
(a) In case the Issuer shall (A) pay a dividend on any
class of its Capital Stock in shares of its Common Stock, (B) subdivide its
outstanding shares of Common Stock into a greater number of shares or (C)
combine its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such action
shall be adjusted retroactively as provided below so that the Conversion
Price thereafter shall be determined by multiplying the Conversion Price at
which the Securities were theretofore
61
convertible by a fraction of which the denominator shall be the number of
shares of Common Stock outstanding immediately following such action and of
which the numerator shall be the number of shares of Common Stock
outstanding immediately prior thereto. Such adjustment shall be made
whenever any event listed above shall occur and shall become effective
retroactively immediately after the record date in the case of a dividend
and immediately after the effective date in the case of a subdivision or
combination.
(b) In case the Issuer shall issue options, rights or
warrants entitling the holder to subscribe for or purchase shares of Common
Stock at a price per share less than the current market price per share of
the Class A Common Stock (as determined in accordance with the provisions
of Section 13.8(d) below) (the "Current Market Price"), or in case the
Issuer shall issue Common Stock or other securities convertible into or
exchangeable for Common Stock for a consideration per share of Common
Stock, whether paid on issuance in respect of Common Stock or deliverable
upon exercise, conversion or exchange of any option, right or warrant, or
convertible or exchangeable security, less than the Current Market Price,
then the Conversion Price in effect immediately prior thereto shall be
adjusted as provided below so that the Conversion Price therefor shall be
equal to the price determined by multiplying (A) the Conversion Price at
which the Securities were theretofore convertible by (B) a fraction of
which the denominator shall be the sum of (1) the number of shares of
Common Stock outstanding on the date of issuance of such Common Stock,
convertible or exchangeable securities, options, rights or warrants and (2)
the number of additional shares of Common Stock issued, offered for
subscription or purchase, or issuable upon such exercise, conversion or
exchange, and of which the numerator shall be the sum of (1) the number of
shares of Common Stock outstanding on the date of issuance of such Common
Stock, convertible or exchangeable securities, options, rights or warrants
and (2) the number of additional shares of Common Stock which the aggregate
issue or offering price of the number of shares of Common Stock so offered
would purchase at the Current Market Price. Such adjustment shall be made
whenever such shares of Common Stock, convertible or exchangeable
securities, options, rights or warrants are issued, and shall become
effective immediately after such issuance, or if such securities are to be
issued to all holders of Common Stock, immediately after the record date
for the determination of stockholders entitled to receive such securities.
However, upon the expiration of any option, right or warrant to purchase
Common Stock or upon the expiration of conversion or exchange rights in
respect of any convertible or exchangeable security, the issuance of which
resulted in an adjustment in the conversion price pursuant to this Section
13.8(b), if any such option, right or warrant or conversion or exchange
right shall expire and shall not have been exercised, the Conversion Price
shall be recomputed immediately upon such expiration and effective
immediately upon such expiration shall be increased to the price it would
have been (but reflecting any other adjustments to the Conversion Price
made pursuant to the provisions of this Section 13.8(b) after the issuance
of such rights or warrants or convertible or exchangeable securities) had
the adjustment of the Conversion Price made upon the issuance of such
rights or warrants or convertible or exchangeable securities been made on
the basis of offering for subscription or purchase only that
62
number of shares of Common Stock actually purchased upon the exercise of
such options, rights or warrants or convertible or exchangeable securities.
No further adjustment shall be made upon exercise of any option, right,
warrant, convertible security or exchangeable security if an adjustment
shall have been made upon issuance of such security. Notwithstanding
anything herein to the contrary, no adjustment to the Conversion Price
shall be required to be made or shall be made pursuant to this Section
13.8(b) in respect of any of the following issuances of Common Stock,
options, rights or warrants, or convertible or exchangeable securities:
(i) issuances of Common Stock or options, rights or warrants to purchase
Common Stock to employees, officers and/or directors of the Issuer and/or
any of its Subsidiaries pursuant to employee benefit or similar plans or
arrangements of the Issuer and/or its Subsidiaries approved by a majority
of the disinterested members of the Board of Directors, (ii) issuances of
Common Stock upon exercise or conversion of any option, right or warrant or
convertible or exchangeable security which, when issued, did not give rise
to an adjustment to the Conversion Price pursuant to this Section 13.8(b)
(including, without limitation, the issuance of Common Stock upon the
conversion of the Securities, upon the conversion of the Class B Non-Voting
Common Stock into Class A Common Stock and upon the exercise of the
Warrants), (iii) issuances as to which a conversion adjustment is required
under Section 13.8(a), 13.8(c) or 13.8(h), (iv) issuances of Common Stock
or options, warrants or rights or convertible or exchangeable securities
pursuant to a registered underwritten public offering, or (v) any other
issuance that the Issuer is advised, in writing, by a nationally recognized
investment banking firm, is fair, from a financial point of view, to the
holders of Common Stock.
(c) In case the Issuer shall pay a dividend to all
holders of its Common Stock (including any dividend paid in connection with
a consolidation or merger in which the Issuer is the continuing
corporation) of any shares of Capital Stock of the Issuer or its
subsidiaries (other than Common Stock) or evidences of its indebtedness or
assets (excluding cash dividends payable solely in cash that may from time
to time be fixed by the Board of Directors, or dividends or distributions
in connection with the liquidation, dissolution or winding up of the
Issuer) or rights or warrants to subscribe for or purchase any of its
securities or those of its Subsidiaries or securities (excluding Class B
Non-Voting Common Stock) convertible or exchangeable for Common Stock
(excluding those securities referred to in Section 13.8(b) above), then in
each such case the Conversion Price in effect immediately prior thereto
shall be adjusted as provided below so that the Conversion Price thereafter
shall be equal to the price determined by multiplying (A) the Conversion
Price in effect on the record date mentioned below by (B) a fraction, the
numerator of which shall be the Current Market Price per share of Class A
Common Stock on the record date mentioned below less the then fair market
value (as determined by the Board of Directors, whose good faith
determination shall be conclusive) as of such record date of the assets,
evidences of indebtedness or securities so paid with respect to one share
of Class A Common Stock, and the denominator of which shall be the Current
Market Price per share of Common Stock on such record date; provided,
however, that in the event the then fair market value (as so determined) so
paid with respect to one share of Class A Common
63
Stock is equal to or greater than the Current Market Price per share of
Common Stock on the record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder of
Securities shall have the right to receive the amount and kind of assets,
evidences of indebtedness, or securities such Holder would have received
had such Holder converted all its Securities immediately prior to the
record date for such dividend. Such adjustment shall be made whenever any
such payment is made, and shall become effective retroactively immediately
after the record date for the determination of stockholders entitled to
receive the payment.
(d) For the purpose of any computation under Sections
13.8(b) and 13.8(c) above, the Current Market Price per share of Class A
Common Stock at any date shall be deemed to be the average Sales Price for
the 30 consecutive trading days commencing 45 trading days before the day
in question or, if the Sales Price is to be determined by the Board of
Directors of the Company, the fair market value per share of Class A Common
Stock as determined in good faith by the Board of Directors.
(e) 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 then in effect; provided, however, that
any adjustments that by reason of this Section 13.8(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 13.8 shall be made to the
nearest cent.
(f) In the event that, at any time as a result of an
adjustment made pursuant to Section 13.8(a) or 13.8(c) above, the holder of
any Security thereafter surrendered for conversion shall become entitled to
receive any shares of the Issuer other than shares of the Common Stock,
thereafter the number of such other shares so receivable upon conversion of
any Security 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 the Common Stock contained in Sections 13.8(a) through 13.8(e)
above, and the other provisions of this Article XIII with respect to the
Common Stock shall apply on like terms to any such other shares.
(g) Whenever the Conversion Price is adjusted, as herein
provided, the Issuer shall promptly file with the Trustee a certificate of
an officer of the Issuer setting forth the Conversion Price after the
adjustment and setting forth a brief statement of the facts requiring such
adjustment and a computation thereof. The certificate shall be conclusive
evidence of the correctness of the adjustment. The Issuer shall promptly
cause a notice of the adjusted Conversion Price to be mailed to each Holder
of Securities.
(h) In case of any reclassification of the Class A Common
Stock or Class B Non-Voting Common Stock, any consolidation of the Issuer
with, or merger of the Issuer into, any other entity, any merger of another
entity into the Issuer (other than a merger that does not
64
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Class A Common Stock or Class B Non-Voting Common
Stock of the Issuer), any sale or transfer of all or substantially all of
the assets of the Issuer or any compulsory share exchange pursuant to which
share exchange the Class A Common Stock or Class B Non-Voting Common Stock
is converted into other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction whereby
each Holder of a Security or Securities then outstanding shall have the
right thereafter, during the period such Security or Securities shall be
convertible, to convert such Security or Securities only into the kind and
amount of securities, cash and other property receivable upon the
reclassification, consolidation, merger, sale, transfer or share exchange
by a holder of the number of shares of Class A Common Stock or Class B Non-
Voting Common Stock of the Issuer into which a Security or Securities would
have been convertible immediately prior to the reclassification,
consolidation, merger, sale, transfer or share exchange. The Issuer, the
person formed by the consolidation or resulting from the merger or which
acquires such assets or which acquires the Issuer's shares, as the case may
be, shall make provisions in its certificate or articles of incorporation
or other constituent document to establish such rights. The certificate or
articles of incorporation or other constituent document shall provide for
adjustments, which, for events subsequent to the effective date of the
certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XIII. The provisions of this Section 13.8(h)
shall similarly apply to successive reclassifications, consolidations,
mergers, sales, transfers or share exchanges.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
65
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of December 14, 1995.
SOUTHWESTERN FINANCIAL CORPORATION
By: /s/Xxxxx X. Xxxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
By: /s/Xxxx X. Xxxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
66
STATE OF TEXAS )
)
COUNTY OF DALLAS )
On the 14th day of December, 1995 before me personally came
Xxxxx X. Xxxxxxxxx, to me known, who, being by me duly sworn, did depose
and say that he is Senior Vice President of Southwestern Financial
Corporation, a Delaware corporation; and that he signed his name xxxxxxx on
behalf of such corporation.
Notary Public in and for the
State of Texas
Name:
My Commission Expires:
67
STATE OF TEXAS )
)
COUNTY OF DALLAS )
On the 14th day of December, 1995 before me personally came
Xxxx Xxxxxxxxx to me known, who, being by me duly sworn, did depose and say
that he is the Vice President of U.S. Trust Company of Texas, N.A., a
national banking association; and that he signed his name thereto on behalf
of such corporation.
Notary Public in and for the
State of Texas
Name:
My Commission Expires:
68
EXHIBIT A
[RESTRICTED SECURITIES LEGEND]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND OTHER APPLICABLE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES THAT (A) THIS SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) TO THE ISSUER, (2) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER THAT IS AWARE
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A OR (3) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S OR THE TRUSTEE'S RIGHT TO RECEIVE PRIOR TO SUCH TRANSFER THOSE
CERTIFICATES AND LEGAL OPINIONS REQUIRED BY THE INDENTURE AND SUBJECT, IN
ANY EVENT, TO THE COMPLETION AND DELIVERY TO THE TRUSTEE OF THE ASSIGNMENT
FORM APPEARING ON THE REVERSE OF THIS SECURITY.
[FORM OF FACE OF A SECURITY]
No. $
SOUTHWESTERN FINANCIAL CORPORATION
Convertible Subordinated Reset Note due 2005
Southwestern Financial Corporation, a Delaware corporation (the
"Issuer"), for value received hereby promises to pay to ________________ or
registered assigns the principal sum of ________________________ Dollars at
the Issuer's office or agency for said purpose on December 15, 2005, in
such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
and to pay interest at a rate per annum equal to the Applicable Rate at
said office or agency.
A-1
The Issuer shall pay interest on the principal amount of this
Security at the Applicable Rate. The Issuer shall pay interest
semiannually on June 15 and December 15 of each year, commencing with June
15, 1996. Interest on the Securities will accrue from the most recent
interest payment date to which interest on the Securities has been paid or
duly provided for, unless the date hereof is a date to which interest on
the Securities has been paid or duly provided for, in which case from the
date of this Security, or unless no interest has been paid or duly provided
for on the Securities, in which case from December 14, 1995, until payment
of said principal sum has been made or duly provided for. Notwithstanding
the foregoing, if the date hereof is after June 1 or December 1, as the
case may be, and before the following June 15 or December 15, this Security
shall bear interest from such June 15 or December 15; provided, that if the
Issuer shall default in the payment of interest due on such June 15 or
December 15, then this Security shall bear interest from the next preceding
June 15 or December 15 to which interest on the Securities has been paid or
duly provided for, or, if no interest has been paid or duly provided for on
the Securities since the original issue date of this Security, from
December 14, 1995. The interest so payable on any June 15 or December 15
will, except as otherwise provided in the Indenture referred to on the
reverse hereof, be paid to the person in whose name this Security is
registered at the close of business on the June 1 or December 1 preceding
such June 15 or December 15, whether or not such day is a business day;
provided that interest may be paid, at the option of the Issuer, by mailing
a check therefor payable to the registered holder entitled thereto at his
last address as it appears on the Security register.
"Applicable Rate" means (i) from the original issuance of the
Securities through and including June 14, 1997, 7% per annum, and (ii) from
June 15, 1997, a rate per annum equal to the Reset Rate, unless the Issuer
elects to make the Repurchase Offer in accordance with the Indenture and
thereupon purchases in accordance with the terms of the Indenture all
Securities property tendered in respect of such Repurchase Offer, in which
case at 7% per annum. "Reset Rate" means an interest rate per annum equal
to a rate determined by two recognized investment banking firms retained by
the Issuer (the "Reset Advisors") to be the interest rate per annum which,
in their opinion, would result in the bid price of the Securities, as of
the business day immediately preceding June 15, 1997 (the "Reset Date"),
being 100% of their principal amount (or if the Reset Advisors are unable
to agree on a single rate, the average of the rates selected by such Reset
Advisors); provided that in no event shall the Reset Rate be less than 7%
or greater than 11% per annum. The Issuer shall give notice to the Trustee
and the Holders of the Reset Rate no later than seven days after the Reset
Date.
Interest on this Security will be calculated on the basis of a
360-day year, consisting of twelve 30-day months.
Reference is made to the further provisions set forth on the
reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
A-2
This Security shall not be valid or obligatory until the
certificate of authentication hereon shall have been duly signed by the
Trustee acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
SOUTHWESTERN FINANCIAL CORPORATION
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned
Indenture.
Dated: U.S. TRUST COMPANY OF TEXAS,
N.A., as Trustee
By:
Authorized Signatory
A-3
[FORM OF REVERSE OF SECURITY]
SOUTHWESTERN FINANCIAL CORPORATION
Convertible Subordinated Reset Note due 2005
This Security is one of a duly authorized issue of debt
securities of the Issuer, limited to the aggregate principal amount of
$40,000,000 (except as otherwise provided in the Indenture mentioned
below), issued or to be issued pursuant to an indenture dated as of
December 14, 1995 (the "Indenture"), duly executed and delivered by the
Issuer to U.S. Trust Company of Texas, N.A., Trustee (herein called the
"Trustee"). Reference is hereby made to the Indenture and all indentures
supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Issuer and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Securities.
The Securities will bear interest at the Applicable Rate.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all the Securities may be
declared due and payable, in the manner and with the effect, and subject to
the conditions, provided in the Indenture. The Indenture provides that in
certain events such declaration and its consequences may be waived by the
holders of a majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such holders may waive
any past default under the Indenture and its consequences except a default
in the payment of principal of and premium, if any, or interest on any of
the Securities. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Security and any Security which may be issued in exchange or substitution
herefor, whether or not any notation thereof is made upon this Security or
such other Securities.
The Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal
amount of the Securities at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Securities; provided that no
such supplemental indenture shall (a) extend the final maturity of any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any amount
payable on the redemption hereof, or make any security payable in other
than United States currency, or impair or affect the rights of any
securityholder to institute suit for the payment thereof in each case
without the consent of each Holder of Securities affected thereby; (b)
alter in a manner adverse to the Holders the conversion provisions
A-4
of Article XIII without the consent of each Holder of Securities affected
thereby; (c) reduce the aforesaid percentage of Securities, the consent of
the holders of which is required for any such supplemental indenture,
without the consent of each Holder of Securities affected thereby or
(d) alter in a manner adverse to the Holders the provisions of Section 3.11
without the consent of each Holder of Securities affected thereby.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Security at the place, times, and
rate, and in the currency, herein prescribed.
The Securities are issuable only as registered Securities
without coupons in denominations of $1,000.00 and any multiple of
$1,000.00.
At the office or agency of the Issuer referred to on the face
hereof and in the manner and subject to the limitations provided in the
Indenture, Securities may be exchanged for a like aggregate principal
amount of Securities of other authorized denominations.
Upon due presentment for registration of transfer of this
Security at the above-mentioned office or agency of the Issuer, a new
Security or Securities of authorized denominations, for a like aggregate
principal amount, will be issued to the transferee as provided in the
Indenture. No service charge shall be made for any such transfer, but the
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
The Securities may not be redeemed prior to December 15, 1998.
On and after December 15, 1998, the Securities may be redeemed at the
option of the Issuer as a whole, or from time to time in part, on any date
prior to maturity, upon mailing a notice of such redemption not less than
30 nor more than 60 days prior to the date fixed for redemption to the
holders of Securities to be redeemed, all as provided in the Indenture, at
the following redemption prices (expressed as percentages of the principal
amount) if redeemed during the twelve-month period commencing on December
15th of the year set forth below, together in each case with accrued and
unpaid interest to the date fixed for redemption:
Year Percentage
1998 103.50%
1999 102.33%
2000 101.17%
2001 and thereafter 100.00%
provided that if the date fixed for redemption is a June 15 or December 15,
as the case may be, then the interest payable on such redemption date shall
be paid to the holder of record on the
A-5
immediately preceding June 1 or December 1, as the case may be,
notwithstanding any transfer or exchange of this Security after the record
date and before the date fixed for redemption.
Subject to payment by the Issuer of a sum sufficient to pay the
amount due on redemption, interest on this Security (or portion hereof if
this Security is redeemed in part) shall cease to accrue upon the date duly
fixed for redemption of this Security (or portion hereof if this Security
is redeemed in part).
Subject to the provisions of the Indenture, the Holders have
the right to convert the principal amount of the Securities into fully paid
and nonassessable shares of Class A Common Stock and Class B Non-Voting
Common Stock of the Issuer in the ratio of three shares to one share,
respectively, at the initial conversion price per share of Class A Common
Stock and Class B Non-Voting Common Stock of $12.50, or at the adjusted
conversion price then in effect, if adjustment has been made as provided in
the Indenture, upon surrender of the Security to the Issuer, together with
a fully executed notice in substantially the form attached hereto and, if
required by the Indenture, an amount equal to accrued interest payable on
such Security.
The Securities are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Senior Indebtedness, whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed or guaranteed. To the extent and in the manner provided in the
Indenture, Senior Indebtedness must be paid before any payment may be made
to any Holder of this Security. Each Holder by his acceptance hereof
agrees to be bound by such provisions and authorizes and expressly directs
the Trustee, on his behalf, to take such action as may be necessary or
appropriate to effectuate the subordination provided for in the Indenture
and appoints the Trustee his attorney-in-fact for such purposes.
The Issuer, the Trustee, and any authorized agent of the Issuer
or the Trustee may deem and treat the registered holder hereof as the
absolute owner of this Security (whether or not this Security shall be
overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Issuer or the Trustee or any
authorized agent of the Issuer or the Trustee), for the purpose of
receiving payment of, or on account of, the principal hereof and premium,
if any, and, subject to the provisions on the face hereof, interest hereon
and for all other purposes, and neither the Issuer nor the Trustee nor any
authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
The Securities are subject to defeasance as described in the
Indenture.
No recourse shall be had for the payment of the principal of
and premium, if any, or the interest on this Security, for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Issuer or of any successor corporation, either directly or through the
Issuer or any successor corporation,
A-6
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issue hereof, expressly waived and released.
The Securities and the Indenture shall be deemed to be a
contract under laws of the State of Texas, and for all purposes shall be
construed in accordance with the laws of said state, except as may
otherwise be required by mandatory provisions of law.
A-7
[FORM OF ASSIGNMENT FORM]
For value received hereby sells,
assigns and transfers unto
______________________________
______________________________
Please insert social security or
other identifying number of assignee
Please print or typewrite name
and address including zip code
of assignee:
the within Security and do hereby irrevocably constitute and appoint
________________________ Attorney to transfer the Security on the books of
the Issuer with full power of substitution in the premises.
Date:_________________ Your Signature:
(Sign exactly as your name
appears on the other side
of this Security)
Signature
Guarantee:
(Signature must be guaranteed)
A-8
[FORM OF CONVERSION NOTICE]
To: Southwestern Financial Corporation
The undersigned owner of this Security hereby: (i) irrevocably exercises
the option to convert this Security, or the portion hereof below designated, for
shares of Class A Common Stock and Class B Non-Voting Common Stock of
Southwestern Financial Corporation in accordance with the terms of the Indenture
referred to in this Security and (ii) directs that such shares of Class A Common
Stock and Class B Non-Voting Common Stock deliverable upon the conversion,
together with any check in payment for fractional shares and any Security(ies)
representing any unconverted principal amount hereof, be issued and delivered to
the registered holder hereof unless a different name has been indicated below.
If shares or Securities in respect of the unconverted portions hereof are to be
delivered registered in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.
Dated:
________________________________
Signature
Fill in for registration of shares if to be delivered, and of Securities if
to be issued, otherwise than to and in the name of the registered holder.
__________________________________
Social Security or other
Taxpayer Identifying Number
(Name)
(Street Address)
(City, State and Zip Code)
(Please print name and address)
Principal amount to be converted:
(if less than all)
$____________
A-9
EXHIBIT B
[FORM OF LEGAL OPINION ON TRANSFER]
_________________, 199__
[Trustee]
[Address]
Re: Southwestern Financial Corporation
Convertible Subordinated Notes due 2005
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the sale by
______________________ (the "Transferor") to ______________________ (the
"Purchaser") of $____________ aggregate principal amount of Convertible
Subordinated Notes due 2005 of Southwestern Financial Corporation (the
"Securities").
We have examined such documents and records as we have deemed appropriate.
In our examination of the foregoing, we xxxxx assumed the authenticity of all
documents, the genuineness of all signatures and the due authorization,
execution and delivery of the aforementioned by each of the parties thereto. We
have further assumed the accuracy of the representations contained in the
documents set forth above made by the parties executing such documents. We have
also assumed that the sale of the Securities to the Transferor was exempt from
the registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "Securities Act").
Based on the foregoing, we are of the opinion that the sale to the
Purchaser of the Securities does not require registration of such Securities
under the Securities Act.
Very truly yours,
B-1
