EXHIBIT 4.2
RECOGNITION EQUIPMENT INCORPORATED
AND
MBANK DALLAS, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of April 3, 1986
$51,750,000
7 1/4% Convertible Subordinated Debentures Due 2011
TABLE OF CONTENTS/*/
ARTICLE I
Definitions AND OTHER PROVISIONS OF GENERAL APPLICATIOn
PAGE
----
SECTION 1.01. Definitions.............................. 1
"This Indenture" and certain other terms 1
"Act"................................... 2
"Affiliate"............................. 2
"Authorized Newspaper".................. 2
"Board of Directors".................... 2
"Board Resolution"...................... 2
"Business day".......................... 3
"Common Stock".......................... 3
"Commission............................. 3
"Company................................ 3
"Company Request", "Company Order" and
"Company Consent...................... 3
"Current Market Price................... 3
"Debentureholder", "Registered Holder"
or "Holder"........................... 4
"Debenture Register" and
"Debenture Registrar"................... 4
"Event of Default"...................... 4
"indebtedness".......................... 4
"Independent"........................... 4
"Interest Payment Date"................. 4
"Maturity............................... 4
"Officers' Certificate.................. 4
"Opinion of Counsel".................... 5
"Outstanding"........................... 5
"Paying Agent".......................... 5
"Person"................................ 6
"Place of Payment"...................... 6
"Predecessor Debentures"................ 6
"Redemption Date"....................... 6
"Redemption Price"...................... 6
"Regular Record Date"................... 6
"Responsible Officer.................... 6
"Senior Indebtedness.................... 6
"Special Record Date"................... 7
---------------
/*/The Table of Contents is not part of the Indenture.
ii
PAGE
----
"Stated Maturity"....................... 7
"Subsidiary............................. 8
"Trustee"............................... 8
"Trust Indenture Act" or "TIA".......... 8
SECTION 1.02. Compliance Certificates and Opinions.... 8
SECTION 1.03. Form of Documents Delivered to Trustee.. 9
SECTION 1.04. Acts of Debentureholders................ 10
SECTION 1.05. Notices, etc., to Trustee and Company... 11
SECTION 1.06. Notices to Debentureholders; Waiver..... 11
SECTION 1.07. Conflict with Trust Indenture Act....... 12
SECTION 1.08. Effect of Headings and Table of Contents 12
SECTION 1.09. Successors and Assigns.................. 12
SECTION 1.10. Separability Clause..................... 12
SECTION 1.11. Benefits of Indenture................... 13
SECTION 1.12. Governing Law........................... 13
SECTION 1.13. Rules by Trustee and Agents............. 13
SECTION 1.14. Non-Business Days....................... 13
ARTICLE II
FORM OF DEBENTURE
SECTION 2.01. Form Generally.......................... 13
SECTION 2.02. Form of Debenture....................... 14
ARTICLE III
THE DEBENTURES
SECTION 3.01. Title and Terms......................... 21
SECTION 3.02. Denominations........................... 23
SECTION 3.03. Execution, Authentication and Delivery.. 23
SECTION 3.04. Temporary Debentures.................... 23
SECTION 3.05. Registration, Registration of
Transfer and Exchange................... 24
SECTION 3.06. Mutilated, Lost, Destroyed or
Wrongfully Taken Debentures............. 25
SECTION 3.07. Payment of Interest;
Interest Rights Preserved............... 26
SECTION 3.08. Persons Deemed Owners................... 28
SECTION 3.09. Cancellation............................ 28
SECTION 3.10. Authentication and Delivery of
Original Issue.......................... 28
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. 29
SECTION 4.02. Application of Trust Money.............. 30
iii
ARTICLE V
REMEDIES
PAGE
----
SECTION 5.01. Events of Default....................... 31
SECTION 5.02. Acceleration of Maturity;
Rescission and Annulment................ 32
SECTION 5.03. Collection of Indebtedness and
Suits for Enforcement by Trustee...... 33
SECTION 5.04. Trustee May File Proofs of Claim........ 34
SECTION 5.05. Trustee May Enforce Claims
Without Possession of Debentures........ 35
SECTION 5.06. Application of Money Collected.......... 35
SECTION 5.07. Limitation on Suits..................... 36
SECTION 5.08. Unconditional Right of Debentureholders
to Receive Principal, Premium and
Interest and to Convert................. 37
SECTION 5.09. Restoration of Rights and Remedies...... 37
SECTION 5.10. Rights and Remedies Cumulative.......... 37
SECTION 5.11. Delay or Omission Not Waiver............ 37
SECTION 5.12. Control by Debentureholders............. 38
SECTION 5.13. Waiver of Past Defaults................. 38
SECTION 5.14. Undertaking for Costs................... 38
SECTION 5.15. Waiver of Stay or Extension Laws........ 39
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities..... 39
SECTION 6.02. Notice of Default....................... 41
SECTION 6.03. Certain Rights of Trustee............... 41
SECTION 6.04. No Responsibility for Recitals or
Issuance of Debenture................... 43
SECTION 6.05. May Hold Debentures..................... 43
SECTION 6.06. Money Held in Trust..................... 43
SECTION 6.07. Compensation and Reimbursement.......... 43
SECTION 6.08. Disqualification; Conflicting Interests. 44
SECTION 6.09. Corporate Trustee Required; Eligibility. 51
SECTION 6.10. Resignation and Removal;
Appointment of Successor.............. 51
SECTION 6.11. Acceptance of Appointment by Successor.. 53
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business of Trustee....... 53
SECTION 6.13. Limitation on Rights of Trustee as
Creditor.............................. 54
iv
ARTICLE VII
DEBENTUREHOLDERS' LIST AND REPORTS BY
TRUSTEE AND COMPANY
PAGE
----
SECTION 7.01. Company to Furnish Trustee Names and
Addresses of Debentureholders......... 58
SECTION 7.02. Preservation of Information;
Communications to Debentureholders...... 59
SECTION 7.03. Reports by Trustee...................... 60
SECTION 7.04. Reports by Company...................... 62
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 8.01. Company May Consolidate, etc.,
Only on Certain Terms................. 63
SECTION 8.02. Successor Corporation Substituted....... 64
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without
Consent of Debentureholders........... 64
SECTION 9.02. Supplemental Indentures With
Consent of Debentureholders............. 65
SECTION 9.03. Execution of Supplemental Indentures.... 66
SECTION 9.04. Effect of Supplemental Indentures....... 66
SECTION 9.05. Conformity with Trust Indenture Act..... 66
SECTION 9.06. Reference in Debentures to
Supplemental Indentures................. 67
SECTION 9.07. Modification of Subordination Provisions 67
ARTICLE X
COVENANTS
SECTION 10.01. Payment of Principal, Premium and
Interest.............................. 67
SECTION 10.02. Maintenance of Office or Agency......... 67
SECTION 10.03. Money for Debenture Payments to be
Held in Trust......................... 68
SECTION 10.04. Statement as to Compliance............. 69
v
ARTICLE XI
REDEMPTION OF DEBENTURES; SINKING FUND
PAGE
----
SECTION 11.01. Right of Redemption; Sinking Fund......... 70
SECTION 11.02. Applicability of Article.................. 72
SECTION 11.03. Election to Redeem; Notice to Trustee..... 72
SECTION 11.04. Selection by Trustee of Debentures
to be Redeemed............................ 72
SECTION 11.05. Notice of Redemption...................... 73
SECTION 11.06. Deposit of Redemption Price............... 73
SECTION 11.07. Debentures Payable on Redemption Date..... 74
SECTION 11.08. Debentures Redeemed in Part............... 74
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Exemption from Individual Liability....... 75
ARTICLE XIII
SUBORDINATION OF DEBENTURES
SECTION 13.01. Agreement of Subordination................ 76
SECTION 13.02. Priority of Senior Indebtedness
on Distribution........................... 76
SECTION 13.03. Subrogation of the Debentures............. 78
SECTION 13.04. No Impairment of Obligation to Pay........ 78
SECTION 13.05. No Payment During Defaults on
Senior Indebtedness....................... 79
SECTION 13.06. Right of Company to Make Payments
at Any Time............................... 79
SECTION 13.07. Certain Holders of Senior Indebtedness.... 80
SECTION 13.08. Trustee to Effectuate Subordination....... 80
SECTION 13.09. Trustee Not Charged with
Knowledge of Prohibition.................. 80
SECTION 13.10. Non-compliance Not to Affect Subordination 81
SECTION 13.11. No Fiduciary Duty of Trustee
to Holders of Senior Indebtedness......... 82
SECTION 13.12. Parity with 11% Convertible
Subordinated Debentures................... 82
ARTICLE XIV
CONVERSION OF DEBENTURES
SECTION 14.01. Conversion Privilege...................... 82
SECTION 14.02. Manner of Exercise of Conversion Privilege 83
SECTION 14.03. Fractional Shares......................... 84
SECTION 14.04. Conversion Price.......................... 85
SECTION 14.05. Adjustment of Conversion Price............ 85
vi
PAGE
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SECTION 14.06. Effect of Reclassifications,
Consolidations, Consolidations, Mergers
or Sales on Conversion Privilege.......... 89
SECTION 14.07. Notice of Certain Events.................. 90
SECTION 14.08. Taxes on Conversions...................... 91
SECTION 14.09. Company to Reserve Common Stock........... 91
SECTION 14.10. Disclaimer of Responsibility
for Certain Matters....................... 92
SECTION 14.11. Return of Money Deposited for
Converted Debentures...................... 93
SECTION 14.12. Cancellation of Converted Debentures...... 93
TESTIMONIUM.............................................. 93
SIGNATURES AND SEALS..................................... 93
ACKNOWLEDGMENTS.......................................... 94
vii
TABLE SHOWING REFLECTION OF
TRUST INDENTURE ACT OF 1939/*/
SECTION SECTION of
of Act Indenture
------- ----------
(S)303(1)................................................... 1.01(4)
(4)................................................... 6.08(d)(1)
(5)................................................... 6.08(d)(2)
(6)................................................... 6.08(d)(6)
(10)................................................... 1.01
(12)................................................... 6.08(d)(5)
6.13(e)
(13)................................................... 1.01
(16)................................................... 6.08(d)(4)
6.08(e)(1)
(S)310(a)(1)................................................ 6.09
(a)(2)................................................ 6.09
(a)(3)................................................ Not Applicable
(a)(4)................................................ Not Applicable
(b)................................................... 6.08
6.10
(S)311(a)................................................... 6.13(a),(b),(c)
6.13(e)
(b)................................................... 6.13(d),(e)
(b)(2)................................................ 7.03(a)(2)
7.03(b)
(S)312(a)................................................... 7.01
7.02(a)
(b)................................................... 7.02(b)
(c)................................................... 7.02(c)
(S)313(a)................................................... 7.03(a)
(b)................................................... 7.03(b)
(c)................................................... 7.03(a)
7.03(b)
(d)................................................... 7.03(c)
(S)314(a)................................................... 7.04
(b)................................................... Not Applicable
(c)(1)................................................ 1.02
(c)(2)................................................ 1.02
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e)................................................... 1.02
---------------
/*/This Table is not part of the Indenture.
viii
TABLE SHOWING REFLECTION OF
TRUST INDENTURE ACT OF 1939/*/
SECTION SECTION of
of Act Indenture
------- ----------
(S)315(a)................................................... 6.01(a)
6.01(c)
(b)................................................... 6.02
7.03(a)(6)
(c)................................................... 6.01(b)
(d)................................................... 6.01
(d)(1)................................................ 6.01(a)
(d)(2)................................................ 6.01(c)(2)
(d)(3)................................................ 6.01(c)(3)
(e)................................................... 5.14
(S)316(a)................................................... 5.02
(a)(1)(A)............................................. 5.02
5.12
(a)(1)(B)............................................. 5.13
(a)(2)................................................ Not Applicable
(b)................................................... 5.08
(S)317(a)(1)................................................ 5.03
(a)(2)................................................ 5.04
(b)................................................... 10.03
(S)318(a)................................................... 1.07
THIS INDENTURE dated as of April 3, 1986, is made and entered into between
Recognition Equipment Incorporated, a Delaware corporation (hereinafter called
the "Company"), and MBank Dallas, National Association, as Trustee (hereinafter
called the "Trustee").
The Company has duly authorized the creation of an issue of its 7 1/4%
Convertible Subordinated Debentures Due 2011 (hereinafter called the
"Debentures") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Debentures, when executed and issued by
the Company and authenticated and delivered by the Trustee hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms have been done.
Now, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debentures
by the Holders thereof, it is mutually covenanted and agreed, for the benefit of
each other party and for the equal and proportionate benefit of all Holders of
the Debentures, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the term "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one
or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof;
(2) all references in this instrument to designated "Articles,"
"SECTIONS" and other subdivisions are to the designated Articles, SECTIONS
and other subdivisions of this Indenture. The words "herein",
2
"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;
(3) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(4) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein; and
(5) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles.
Certain terms, used principally in Article VI and Article XIV, are defined
in those Articles.
"Act" when used with respect to any Debentureholder has the meaning
specified in SECTION 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition
''control'' when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authorized Newspaper" means a newspaper of general circulation in New
York, New York, printed in the English language and customarily published on
each Business day, whether or not published on Saturdays, Sundays or holidays.
"Board of Directors" means either the Board of Directors of the Company or
the Executive Committee of that Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
3
"Business day" means each day which is neither a Saturday, Sunday nor other
day on which banking institutions in the pertinent Place of Payment are
authorized or required by law to remain closed.
"Common Stock" means the Common Stock, $.25 par value per share, of the
Company, as the same exists at the date of the execution of this Indenture or as
such stock may be constituted from time to time.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Company" means the corporation named as the "Company" in the first
paragraph of this instrument, until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President, a Senior Vice President or a
Vice President, and by its Treasurer, an Assistant Treasurer, and Assistant
Controller, Secretary, or an Assistant Secretary, and delivered to the Trustee.
"Current Market Price" when used with reference to the Common Stock means
the price of a share of Common Stock on the relevant date, determined on the
basis of the last reported sale price as finally reported in the New York Stock
Exchange Composite Tape for such day (or if the Common Stock is not then listed
on that Exchange in such other transactions reports as may be designated by the
Board of Directors of the Company for the purpose here of) or, if there is no
such reported sale on the day in question, on the basis of the average of the
closing bid and asked quotations or, if no such quotations are available, the
fair market price as determined by the Company which determination shall be
conclusive and shall be described in an Officers' Certificate.
4
"Debentureholder", "Registered Holder" or "Holder" when used with respect
to any Debenture means the Person in whose name such Debenture is registered on
the Debenture Register.
"Debenture Register" and "Debenture Registrar" have the respective meanings
specified in SECTION 3.05.
"Event of Default" has the meaning specified in Article V.
"indebtedness" of a corporation means any and all obligations which in
accordance with generally accepted accounting principles would be included on
the liabilities side of a balance sheet of such corporation on the date as of
which indebtedness is to be determined.
"Independent" when used with respect to any specified Person means such a
Person who (1) is in fact independent, (2) does not have any direct financial
interest or any material indirect financial interest in the Company or in any
other obligor upon the Debentures or in any Affiliate of the Company or of such
other obligor, and (3) is not connected with the Company or such other obligor
or any Affiliate of the Company or of such other obligor, as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
appointed by a Company Order and approved by the Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read this definition and that the signer is Independent within the meaning
hereof.
"Interest Payment Date" means the Stated Maturity of an instalment of
interest on the Debentures.
"Maturity" when used with respect to any Debenture means the date on which
the principal of such Debenture becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President, a Senior Vice President or a Vice President, and by the
Treasurer, an Assistant Treasurer, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
5
"Opinion of Counsel" means a written opinion of counsel, who may (except as
otherwise expressly provided in this Indenture) be counsel for the Company, and
who shall be acceptable to the Trustee.
"Outstanding" when used with respect to Debentures means, as of the date of
determination, all Debentures theretofore authenticated and delivered under this
Indenture, except:
(i) Debentures theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Debentures for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
in trust for the Holders of such Debentures, provided that, if such
Debentures are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provIsion therefor satisfactory to the
Trustee has been made; and
(iii) Debentures in exchange for or in lieu of which other Debentures
have been authenticated and delivered pursuant to this Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of Debentures Outstanding have given any request, demand,
authentication, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authentication, direction, notice,
consent or waiver, only Debentures which the Trustee knows to be so owned shall
be so disregarded. Debentures so owned which have been pledged in good faith
'hay 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 Debentures and
that the pledgee is not the Company or any other obligor upon the Debentures or
any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debentures on behalf of
the Company.
6
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means a city or any political subdivision thereof
designated as such in SECTION 3.01.
"Predecessor Debentures" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture, and for the purposes of this definition, any Debenture
authenticated and delivered under SECTION 3.06 in lieu of a lost, destroyed or
stolen Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Debenture.
"Redemption Date" when used with respect to any Debenture to be redeemed
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Debenture to be redeemed
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the date specified in SECTION 3.01.
"Responsible Officer" when used with respect to the Trustee means the
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the chairman of
the trust committee, the president or any vice-president (however titled), any
trust officer or assistant trust officer of the Trustee customarily performing
corporate trust functions.
"Senior Indebtedness" means (a) the principal of, premium, if any, and
interest on (i) indebtedness (other than the Debentures) of the Company for
money borrowed evidenced by bonds, notes, debentures or similar obligations,
including any guaranty by the Company of any indebtedness for money borrowed of
any other person, whether any such indebtedness or guaranty is outstanding on
the date of this Indenture or is hereafter created, assumed or incurred, (ii)
any obligation of the Company, as lessee or guarantor, to pay rent under a lease
of real or personal property, which obligation, in the judgment of the
Independent certified public accountants employed by the Company, is required to
be capitalized on the balance sheet
7
of the Company in accordance with generally accepted accounting principles,
whether outstanding on the date of this Indenture or hereafter incurred, (iii)
indebtedness incurred, assumed or guaranteed by the Company (whether outstanding
on the date of this Indenture or hereafter created, assumed or incurred) in
connection with the acquisition or improvement of any property or asset or the
acquisition by the Company or a Subsidiary of any other business, unless, in
each case referred to in clauses (i), (ii) and (iii) above, by the terms of the
instrument creating or evidencing the indebtedness it is provided that such
indebtedness is not Senior Indebtedness with respect to the Debentures or ranks
on a parity with the Debentures and is entitled to like rights of subrogation,
or is subordinated to, or is otherwise not superior in right of payment to, the
Debentures, and (b) any other indebtedness, liability or obligation, contingent
or otherwise, of the Company (any such indebtedness, liability or obligation
being hereinafter in this definition referred to as an "Obligation"), and any
guaranty, endorsement or other contingent obligation in respect of an Obligation
of another, which is created, assumed or incurred by the Company after the date
of this Indenture and which, when created, assumed or incurred, is specifically
designated by the Company as Senior Indebtedness for the purposes here of in the
instrument creating or evidencing such Obligation or in the instrument creating
or evidencing the Company's liability with respect to the Obligation of another,
and (c) any refundings, renewals or extensions of any indebtedness, liability or
obligation described in clauses (a) and (b) above; provided, however, that
Senior Indebtedness shall not in any case include (i) indebtedness incurred in
connection with the purchase of materials or services in the ordinary course of
business or indebtedness representing amounts recorded as accounts payable on
the books of the Company and (ii) indebtedness of the Company under the
Company's 11% Convertible Subordinated Debentures Due February 15, 2006, issued
under an Indenture dated as of February 15, 1981, between the Company and First
National Bank in Dallas, as Trustee, for which MBank Dallas, National
Association, is the successor trustee.
"Special Record Date" for the payment of any Defaulted Interest (as defined
in SECTION 3.07) means the date fixed by the Trustee pursuant to SECTION 3.07.
"Stated Maturity" when used with respect to any Debenture or any instalment
of interest thereon means the date specified in such Debenture
8
as the fixed date on which the principal or such instalment of interest is due
and payable.
"Subsidiary" means any corporation of which at least 50% of the outstanding
capital stock or other equity interests having by the terms thereof ordinary
voting power to elect at least 50% of the board of directors, managers or
trustees of such corporation, irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency, is at the time
directly or indirectly owned or controlled by the Company, or by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provision of this Indenture, and thereafter "Trustee" shall mean such
successor Trustee.
"Trust Indenture Act" or "TEA" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as otherwise
provided in SECTION 9.05.
SECTION 1.02. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including all covenants the compliance with which constitute a condition
precedent),if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent (including all covenants
the compliance with which constitute a condition precedent), if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include
9
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
At the request of the Trustee, any such certificate or opinion shall
specifically address any particular condition precedent.
SECTION 1.03. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, or, insofar as it relates to accounting matters,
upon a certificate or opinion of, or representations by, Independent public
accountants, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company,
10
unless such Counsel knows, or in the exercise or reasonable care should know,
that the certificate or opinion or representation with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Debentureholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Debentureholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Debentureholders 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, and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Debentureholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to SECTION 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this SECTION.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by (i) the affidavit of a witness of such execution or
by (ii) the certificate of any notary public or other officer authorized by law
to take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(c) The ownership of Debentures shall be proved by the Debenture Register.
11
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Debenture shall bind the Holder of every
Debenture issued upon the transfer thereof or in exchange therefor or in lieu
thereof, in respect of anything done or suffered to be done by the Trustee or
the Company in reliance there on, whether or not notation of such action is made
upon such Debenture.
SECTION 1.05. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Debentureholders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Debentureholder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its principal corporate trust office,
or
(2) the Company by the Trustee or by any Debentureholder shall be
sufficient for every purpose hereunder if in writing and mailed or
delivered, with postage or delivery charges prepaid, to the Company
addressed to it, in the case of mailing, at P.O. Box 660204, Dallas, Texas
75266-0204, or, in the case of delivery, at 0000 Xxxx Xxxxxxxxx Xxxx,
Xxxxxx, Xxxxx 00000 or at any other address previously furnished in writing
to the Trustee by the Company.
SECTION 1.06. Notices to Debentureholders; Waiver.
Where this Indenture provides for notice to Debentureholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed or delivered, with postage or delivery
charges prepaid, to each Debentureholder affected by such-event, at his address
as it appears on the Debenture Register, not later than the latest date, and not
earlier than the earliest' date, prescribed for the giving of such notice. In
any case where notice to Debentureholders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Debentureholder shall affect the sufficiency of such notice with respect to
other Debentureholders. If a notice or communIcation is mailed or delivered in
the manner provided within the time prescribed, it is duly given whether or not
a Debentureholder receives such
12
notice or communication. 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 Debentureholders 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. If the Company mails
or delivers a notice or communication to Debentureholders, the Company shall
mail or deliver a copy of such notice or communication to the Trustee at the
same time.
In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in an Authorized Newspaper or Authorized Newspapers as
required by this Indenture, thee such method of publication or notification as
shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
SECTION 1.07. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
any of the provisions of TIA, such required provision shall control.
SECTION 1.08. Effect of Headings and Table of Contents.
The Article and SECTION headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
In case any provision in this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
13
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Debentureholders, any benefit or any legal or equitable right, remedy or
claim under this Indenture, other than the rights of the holders of Senior
Indebtedness under Article XIII hereof.
SECTION 1.12. Governing Law.
This Indenture shall be construed in accordance with and governed by the
laws of the State of Texas.
SECTION 1.13. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders not inconsistent with the provisions here of. The Debenture
Registrar, Paying Agent or Conversion Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 1.14. Non-Business Days.
If a payment date is not a Business day at a Place of Payment, payment may
be made at the place on the next succeeding Business day, and no interest shall
accrue for the intervening period.
ARTICLE II
FORM OF DEBENTURE
SECTION 2.01. Form Generally.
The Debentures and the certificate of authentication shall be in
substantially the forms set forth in SECTION 2.02, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon, as may be
required to comply with the rules of any securities exchange, or as may,
consistently herewith, be determined by the officers executing such Debentures,
as evidenced by their signing of the Debentures.
The definitive Debentures shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved or printed
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Debentures may be listed or as may be
14
appropriate under the circumstances, all as determined by the officers executing
such Debentures, as evidenced by their execution of such Debentures.
SECTION 2.02. Form of Debenture.
[FORM OF FACE OF DEBENTURE]
REGISTERED REGISTERED
NUMBER $
SEE REVERSE FOR
CERTAIN DEFINITIONS
RECOGNITION EQUIPMENT INCORPORATED
DEBENTURE
RECOGNITION EQUIPMENT INCORPORATED, a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Company"), for value received, hereby promises to pay to
or registered assigns,
the principal sum of Dollars on
April 15, 2011 (herein referred to as the "Stated Maturity" of said principal
sum), and to pay interest on said principal sum from April 3, 1986 (herein
referred to as the "Accrual Date") until the Stated Maturity thereof at the rate
of 7 1/4% per annum, such interest being payable semi-annually on April 15 and
October 15 in each year, commencing October 15, 1986 (herein referred to as the
"Interest Payment Dates"), with respect to interest accrued on this Debenture
from the immediately preceding Interest Payment Date or, in the case of the
first Interest Payment Date, from the Accrual Date, to the current Interest
Payment Date, to the registered holder of this Debenture at the close of
business on the first day of the month immediately preceding such Interest
Payment Date (herein referred to as the "Regular Record Date"); provided,
however, that if this Debenture or any portion hereof is redeemed by the Company
in accordance with the provisions of the Indenture, interest on this Debenture
or the portion hereof so redeemed shall only be paid to the applicable
Redemption Date. Any instalment of interest which is payable but not paid on an
Interest Payment Date shall forthwith cease to be payable to the registered
holder hereof on the relevant Regular Record Date and thereafter such interest
shall continue to accrue on the principal sum hereof at the rate of 7 1/4% per
15
annum and shall be payable, with respect to interest accrued on this Debenture
from the last Interest Payment Date on which an instalment of interest was paid
or, if no installments of interest have been paid, from the Accrual Date, to the
date such interest is ultimately paid, only to the registered holder of this
Debenture on the date fixed by the Trustee therefor. The principal of (and
premium, if any) and interest on this Debenture are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts at the office or agency of the
Company in the Borough of Manhattan, The City of New York, and at such other
offices or agencies as the Company may from time to time designate; provided,
that interest may be paid, at the option of the Company, by check mailed to the
Person entitled thereto at his address appearing on the Debenture Register. Any
interest not punctually paid or duly provided for shall be payable as provided
in said Indenture.
Reference is made to the further provisions of this Debenture 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.
Unless the certificate of authentication here on has been executed by the
Trustee by the manual signature of one of its authorized officers, this
Debenture shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, RECOGNITION EQUIPMENT INCORPORATED has caused this
instrument to be signed in its corporate name by the facsimile signature of its
President or one of its Vice Presidents and by its Secretary or an Assistant
Secretary by his signature or a facsimile thereof, and a facsimile of its
corporate seal to be affixed hereunto or imprinted hereon.
Dated ............................
RECOGNITION EQUIPMENT
INCORPORATED
[Seal]
By..............................
President
Attest:
By...........................
Secretary
16
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Debentures referred to in the within-mentioned
Indenture.
MBANK DALLAS, NATIONAL ASSOCIATION,
as Trustee
By..............................
Authorized Signature
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To Recognition Equipment Incorporated
The undersigned holder of this Debenture hereby irrevocably exercises the
option to convert this Debenture (or portion hereof below designated) into
shares of Common Stock of RECOGNITION EQUIPMENT INCORPORATED in accordance with
the terms of the Indenture referred to in this Debenture, and directs that the
shares deliverable upon the conversion, and any Debenture representing the
unconverted portion of this Debenture, be registered in the name of and
delivered to the undersigned, together with any check in payment for any
fractional share, unless a different name has been indicated below. If shares
and any Debenture are to be registered in the name of any such other person, the
undersigned will pay all transfer taxes payable with respect thereto.
Dated:........................
..............................
Signature
..............................
Social Security
or Other Taxpayer
Identification Number
If shares and any Debenture are to be registered in the name of a person or
persons other than the above-signed holder, please print each such person's name
and address (including zip code):
................................................................................
................................................................................
................................................................................
Portion to be converted (if less than all): $ ,000.
17
[FORM OF REVERSE OF DEBENTURE]
RECOGNITION EQUIPMENT INCORPORATED
7 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2011
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its 7 1/4% Convertible Subordinated Debentures Due 2011
(hereinafter called the "Debentures"), limited, except as provided in the
Indenture referred to below, in aggregate principal amount to $51,750,000,
issued and to be issued under an indenture dated as of April 3, 1986
(hereinafter called the "Indenture"), between the Company and MBank Dallas,
National Association, as Trustee (hereinafter called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Company, the Trustee, and the Holders of the
Debentures, and the terms upon which the Debentures are, and are to be,
authenticated and delivered.
The Debentures may be redeemed, at the option of the Company, as a whole or
from time to time in part, on any date prior to Maturity, upon not less than 20
nor more than 60 days' prior notice, given as provided in the Indenture, at the
following Redemption Prices, expressed in percentages of the principal amount,
together with accrued interest to the Redemption Date:
If redeemed on or before April 15, 1987: 107.250%; and if redeemed during
the 12-month period beginning April 16 of each year indicated below:
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
1987..... 106.525% 1992....... 102.900%
1988..... 105.800 1993....... 102.175
1989..... 105.075 1994....... 101.450
1990..... 104.350 1995....... 100.725
1991..... 103.625
and thereafter at 100% of the principal amount thereof, plus, in each case,
accrued interest to the date fixed for redemption; provided, however, that the
Debentures may not be redeemed prior to April 22, 1989, unless, for a period of
20 successive Business days ending within five days of the date of
18
notice of redemption, the Current Market Price for the Common Stock has exceeded
150% of the then effective conversion price of the Debentures.
The Debentures are also subject to redemption through the operation of the
Sinking Fund provided for in the Indenture, on April 15, 1996, and on each April
15 thereafter to and including April 15, 2010, on notice as set forth above, at
a Sinking Fund Redemption Price equal to 100% of the principal amount thereof,
together with accrued interest to the Redemption Date.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture may be registered for transfer on the Debenture Register
of the Company, upon surrender of this Debenture for registration of transfer at
the office or agency for the Company in the Borough of Manhattan, The City of
New York, or at such other office or agency as the Company may from time to time
designate, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Debenture Registrar duly executed
by, the registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
The Debentures are issuable only as registered Debentures in the
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture, and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentation for registration of transfer of this Debenture
the Company, the Trustee and any agent of the Company may treat the Person in
whose name this Debenture is registered as the owner here of for all purposes,
whether or not this Debenture be overdue, and neither the Company, the Trustee
nor any agent shall be affected by notice to the contrary.
19
If an Event of Default, as defined in the Indenture, shall occur, the
principal of all the Debentures may be declared due and payable in the manner
and with the effect provided in the Indenture.
The indebtedness evidenced by the Debentures is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
Subject to the provisions of the Indenture, the Holder of this Debenture is
entitled, at his option, at any time prior to the close of business on April 15,
2011 (or, if this Debenture or any portion hereof shall be called for redemption
on a Redemption Date which is prior to such date and the Company shall not
thereafter default in making payment of the Redemption Price, then with respect
to this Debenture or such portion hereof, until and including but not later than
the close of business on the third Business day immediately preceding the
Redemption Date), to convert the principal amount of this Debenture or any
portion of such principal amount (which shall be $1,000 or an integral multiple
thereof) into fully paid and nonassessable shares of Common Stock, as said
shares shall be constituted at the date of conversion, at a conversion price
equal to $16.75 aggregate principal amount of this Debenture for each share of
Common Stock (or at the current adjusted conversion price if an adjustment has
been made as provided in the Indenture), by surrender of this Debenture to the
Company at its office or agency in the Borough of Manhattan, The City of New
York, or at such other office or agency as the Company may from time to time
designate accompanied, if required by the Company or Trustee, by proper
instruments of transfer. If this Debenture, or any part here of, is surrendered
for conver-
20
sion at any time after the Regular Record Date with respect to an Interest
Payment Date and before such Interest Payment Date, then (unless the Company is
in default in the payment of interest), this Debenture, or any part hereof
surrendered for conversion, shall be accompanied by cash in an amount equal to
the interest that would have accrued on this Debenture, or any portion hereof
surrendered for conversion, from the date of conversion to such Interest Payment
Date at the rate of 714% per annum. Subject to the foregoing, no adjustment is
to be made on conversion for interest accrued hereon or for dividends on
securities issued on conversion. As provided in the Indenture, the conversion
price is subject to adjustment in certain events. No fractions of shares or
scrip representing fractions of shares will be delivered on conversion, but an
adjustment in cash will be made for any fractional interest as provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures under the Indenture at
any time by the Company with the consent of the Holders of 66%% in aggregate
principal amount of the Debentures at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate
principal amount of the Debentures at the time Outstanding, on behalf of the
Holders of all the Debentures, to waive compliance by the Company with certain
provisions of the Indenture and certain defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Debenture shall
be conclusive and binding upon such Holder and upon all future Holders of this
Debenture and of any Debenture issued upon the registration of transfer here of
or in exchange herefor or in lieu hereof whether or not a notation of such
consent or waiver is made upon this Debenture.
Except with respect to the rights of the holders of Senior Indebtedness set
forth in this Debenture and in the Indenture, no reference herein to the
Indenture and no provision of this Debenture or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of (and premium, if any) and interest on this Debenture at the
time, place and rate, and in the coin or currency, herein prescribed.
No recourse shall be had for the payment of the principal of (or premium,
if any) or the interest on this Debenture, or 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, stockholder, officer
or director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and
21
as part of the consideration for the issue here of, expressly waived and
released.
All the terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
[FORM OF ASSIGNMENT]
The form of assignment shall be in a form acceptable to the Company and the
Trustee.
ARTICLE III
THE DEBENTURES
SECTION 3.01. Title and Terms.
The aggregate principal amount of Debentures which may be authenticated and
delivered under this Indenture is limited to $51,750,000, except for Debentures
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of other Debentures, as provided herein.
The Debentures shall be known and designated as the "7%% Convertible
Subordinated Debentures Due 2011" of the Company. Their Stated Maturity shall be
April 15, 2011, and they shall bear interest as set forth below, payable semi-
annually on April 15 and October 15 of each year, at the rate set forth in the
preceding sentence, until payment of the principal thereof shall be made or duly
provided for.
Each Debenture shall be dated the date of its authentication and, except as
otherwise provided in this SECTION 3.01, shall bear interest, payable semi-
annually on April 15 and October 15 of each year, commencing October 15, 1986,
from the immediately preceding Interest Payment Date to which interest on the
Debenture has been paid or, if no interest has been paid on the Debentures, from
April 3, 1986 to the current Interest Payment Date; provided, however, that with
respect to any Debenture or portion thereof redeemed by the Company in
accordance with Article XI, interest on such Debenture or portion thereof so
redeemed shall only be paid to the applicable Redemption Date. Each Debenture
authenticated after the Regular Record Date for any Interest Payment Date but
prior to such Interest Payment Date shall be dated the date of its
authentication but, if there is
22
no existing default in the payment of interest on the Debentures, such
Debentures shall bear interest from such Interest Payment Date; provided,
however, that if and to the extent that the Company shall default in the payment
of the interest due on any Interest Payment Date, then all such Debentures shall
bear interest from the immediately preceding Interest Payment Date to which
interest has been paid, unless no interest has been paid on the Debentures, in
which case from April 3, 1986 to the current Interest Payment Date.
The term "Regular Record Date" as used with respect to a semi-annual
Interest Payment Date shall mean the close of business on the April 1 or October
1, as the case may be, next preceding such Interest Payment Date, whether or not
such April 1 or October 1 is a Business day.
The Person in whose name any Debenture is registered at the Regular Record
Date with respect to any Interest Payment Date shall be entitled to receive the
interest payable on such Interest Payment Date (unless such Debenture has been
called for redemption on a Redemption Date which is prior to such Interest
Payment Date) notwithstanding the cancellation of such Debenture upon any
registration of transfer or exchange thereof or conversion thereof subsequent to
such Regular Record Date and prior to such Interest Payment Date; provided,
however, that if and to the extent the Company shall default in the payment of
the interest due on any Interest Payment Date, such Defaulted Interest shall be
paid as provided in SECTION 3.07.
The principal of (and premium, if any) and interest on the Debentures shall
be payable at the office or agency of the Company in the Borough of Manhattan,
The City of New York, and at such other location as the Company may from time to
time designate (each such place being herein called a "Place of Payment");
provided, that interest may be paid, at the option of the Company, by check
mailed to the Person entitled thereto at his address last appearing on the
Debenture Register.
The Debentures shall be redeemable, and shall be entitled to the benefit of
and be redeemable out of the Sinking Fund, all as provided in Article XI.
The Debentures shall be subordinated in right of payment to certain other
indebtedness of the Company as provided in Article XIII.
23
The Debentures shall be convertible into Common Stock as provided in
Article XIV.
SECTION 3.02. Denominations.
The Debentures shall be issuable as registered Debentures without coupons
in the denominations of $1,000 and any integral multiple thereof.
SECTION 3.03. Execution, Authentication and Delivery.
The Debentures shall be executed on behalf of the Company by its Chairman
of the Board, its President, any Senior Vice President or any Vice President in
each case under its corporate seal reproduced thereon, with such corporate seal
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures executed by the Company to the
Trustee, and the Trustee shall authenticate and deliver such Debentures as in
this Indenture provided and not otherwise.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Debentures which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Debentures in lieu of which they
24
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officer executing such Debentures may determine, as
evidenced by his signing of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchange-able for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company at a Place of Payment, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Debentures, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount ~f definitive Debentures of authorized
denominations. Until so exchanged, the temporary Debentures shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debentures.
SECTION 3.05. Registration, Registration of Transfer and Exchange.
The Company shall cause to be maintained an office or agency where the
Debentures may be presented for transfer or exchange (herein sometimes referred
to as the "Debenture Registrar"). The Debenture Registrar may prescribe
reasonable regulations for the registration of Debentures and the registration
of transfers or exchanges of Debentures. The Debenture Registrar shall keep a
register (the "Debenture Register") of the Debentures and of their transfer and
exchange. The Trustee is hereby initially appointed "Debenture Registrar" for
the purpose of registering Debentures and transfers or exchanges of Debentures
as herein provided. The Company may from time to time change the place at which
the Debenture Register shall be kept and designate one or more additional
successor or other Debenture Registrars.
Upon surrender for registration of transfer of any Debenture at the office
or agency of the Company in a Place of Payment, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
25
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Debentures
which the Debentureholder making the exchange is entitled to receIve.
All Debentures issued in exchange for or upon transfer of Debentures shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Debentures surrendered for
such exchange or transfer.
Every Debenture presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Debenture Registrar duly executed, by the Holder thereof or his attorney
duly authorized in writing.
No service charge to the Debentureholders shall be made for any
registration of transfer or exchange of Debentures, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Debentures, other than exchanges pursuant to SECTION 3.04 or SECTION 9.06 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Debenture during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Debentures
selected for redemption hereunder and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Debenture
so selected for redemption in whole or in part; provided, however, that nothing
herein shall be deemed to restrict the right to convert any Debenture or portion
thereof at any time in accordance with Article XIV.
SECTION 3.06. Mutilated, Lost, Destroyed or Wrongfully Taken Debentures.
If any mutilated Debenture is surrendered to the Trustee, or if the Company
and the Trustee receive a claim from a holder that a Debenture has been lost,
destroyed or wrongfully taken, and there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee that
such Debentures have been acquired by a bona
26
fide purchaser, and if the requirements of the Company and the Trustee are met,
the Company shall execute and upon its request the Trustee shall authenticate
and deliver, in exchange for any such mutilated Debenture or in lieu of any such
allegedly lost, destroyed or wrongfully taken Debenture, a new Debenture of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, allegedly lost, destroyed or wrongfully taken
Xxxxxxxxx has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this SECTION 3.06, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this SECTION 3.06 in lieu of any
allegedly lost, destroyed or wrongfully taken Debenture shall constitute an
original additional contractual obligation of the Company, whether or not the
allegedly lost, destroyed or wrongfully taken Debenture shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debentures duly
issued hereunder.
The provisions of this SECTION 3.06 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, allegedly lost, destroyed or wrongfully taken
Debentures.
SECTION 3.07. Payment of Interest: Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Debenture (or one or more Predecessor Debentures) is registered on the
Regular Record Date for such interest specified in SECTION 3.01.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called
27
"Defaulted Interest") shall forthwith cease to be payable to the Registered
Holder on the relevant Regular Record Date by virtue of having been such Holder;
and such Defaulted Interest may be paid by the Company, at its election in each
case; as provided in paragraph (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Debenture and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as provided
in this paragraph (1). Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 nor less than ten days prior to the date of the proposed payment
and not less than ten days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed or delivered,
with postage or delivery charges prepaid, to each Debentureholder at his
address as it appears in the Debenture Register not less than ten days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Debentures (or their respective Predecessor Debentures) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following paragraph (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon
28
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
paragraph (2), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this SECTION 3.07 each Debenture
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Debenture shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Debenture.
SECTION 3.08. Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Debenture, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name any Debenture is registered as the owner of such Debenture
for the purpose of receiving payment of principal of (and premium, if any), and
(subject to SECTION 3.07) interest on, such Debenture and for all other purposes
whatsoever, whether or not such Debenture be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 3.09. Cancellation.
All Debentures surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee for cancellation and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Debentures previously authenticated and delivered here-under which the Company
may have acquired in any manner whatsoever, and all Debentures so delivered
shall be promptly canceled by the Trustee. No Debenture shall be authenticated
in lieu of or in exchange for any Debentures canceled as provided in this
SECTION 3.09, except as expressly permitted by this Indenture. All canceled
Debentures held by the Trustee shall be delivered to the Company.
SECTION 3.10. Authentication and Delivery of Original Issue.
Forthwith upon the execution and delivery of this Indenture, or from time
to time thereafter, Debentures up to the aggregate principal amount of
$51,750,000 may be executed by the Company and delivered to the Trustee
29
for authentication, and shall thereupon be authenticated and delivered by the
Trustee upon Company Order, without any further action by the Company; provided,
however, that the Company shall not execute or deliver to the Trustee for
authentication Debentures in excess of the aggregate principal amount of
$45,000,000 except upon exercise of the underwriters' over-allotment option set
forth in the Underwriting Agreement dated March 26, 1986 relating to the
Debentures.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Debentures herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture (except for those surviving obligations specified
below), when
(1) either
(A) all Debentures theretofore authenticated and delivered (other
than (i) Debentures which have been lost, destroyed or wrongfully
taken and which have been replaced or paid as provided in SECTION
3.06, and (ii) Debentures for which money for their payment has
theretofore been deposited in trust or segregated and held in trust
pursuant to the Indenture and thereafter repaid to the Company or
discharged from such trust, as provided in SECTION 10.03) have been
delivered to the Trustee for cancellation; or
(B) all such Debentures not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
30
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of clause (i), (ii) or (iii) above, has
deposited or caused to be deposited irrevocably with the Trustee, as trust
finds in trust for the purpose, an amount sufficient to pay and discharge
the entire indebtedness on such Debentures not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and interest
to the date of such deposit (in the case of Debentures which have become
due and payable), or to the Stated Maturity or Redemption Date, as the case
may be, and at the time of such deposit Article XIII does not prevent
payment of such Debentures;
(2) the Company has paid or caused to be paid all other sums payable
thereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Moneys deposited pursuant to this SECTION 4.01 are not subject to the
subordination provisions of Article XIII if, at the time of such deposit,
Article XIII does not prevent payment of the Debentures.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company under SECTIONS 3.05, 3.06, 6.07, 6.10, 6.11, 10.01,
10.02, 10.03 and Article XIV shall survive until the Debentures are no longer
Outstanding, and thereafter the obligations of the Company under SECTION 6.07
and the last paragraph of SECTION 10.03 shall survive.
SECTION 4.02. Application of Trust Money.
All money deposited with the Trustee pursuant to SECTION 4.01 shall be held
in trust and applied by it, in accordance with the provisions of the Debentures
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), a- the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such
31
money has been deposited with the Trustee; but such money need not be segregated
from other funds except to the extent required by law.
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default.
"Event of Default", wherever used herein means any one of the following
events (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 or whether or not it shall be occasioned by
the provisions of Article XIII):
(a) default in the due and punctual payment of any interest upon any
of the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or
(b) failure on the part of the Company to duly observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture contained for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Debentures at the time Outstanding; or
(c) entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, liquidation, arrangement,
adjustment or composition of or in respect of the Company under the Federal
Bankruptcy Code or any other applicable Federal or state law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a period of 60
consecutive days; or
(d) institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
32
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable Federal or state law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(e) default in the due and punctual payment of the principal of (and
premium, if any, on) any Debenture as and when the same shall become due
and payable either at maturity, upon redemption by declaration as
authorized by this Indenture, or otherwise; or
(f) default in making any Sinking Fund Payment (as defined in SECTION
11.01), as and when the same shall become due and payable.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Debentures Outstanding may declare the principal of all the Debentures to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Debentureholders), and upon any such declaration such
principal shall become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article V provided, the Holders of a majority
in principal amount of the Debentures Outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Debentures
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures.
33
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne by
the Debentures, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the principal
of Debentures which have become due solely by such acceleration, have been
cured or waived as provided in SECTION 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any instalment of interest on
any Debenture when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Debenture at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable on such
Debentures for principal (and premium, if any) and interest, with interest upon
the overdue principal (and premium, if any) and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest, at the rate borne by the Debentures; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustees, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and
34
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Debentures
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Debentureholders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Debentures
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 the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Debentureholders allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Debentureholder to make such payments to the Trustee, and in the event
35
that the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under SECTION 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Debentureholder any
plan of reorganization, arrangement, adjustment or composition, affecting the
Debentures or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Debentureholder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Debentures
All rights of action and claims under this Indenture or the Debentures may
be prosecuted and enforced by the Trustee without the possession of any of the
Debentures or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Debentures in respect of which such judgment has been
recovered.
SECTION 5.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article V shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Debentures, and the notation
thereon of the payment if only partially paid and upon surrender thereof~ff
fully paid:
FIRST: To the payment of all amounts due the Trustee under SECTION 6.07:
SECOND: Subject to the provisions of Article XIII hereof, to the payment of
the amounts then due and unpaid upon the Debentures for principal (and premium,
if any) and interest, in respect of which or for the
36
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Debentures, for principal (and premium, if any) and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 5.07. Limitation on Suits.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60 day period by the Holders of a majority in
principal amount of the Outstanding Debentures;
it being understood and intended that no one or more Holders of Debentures shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Debentures or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders of Debentures.
37
SECTION 5.08. Unconditional Right of Debentureholders to Receive Principal,
Premium and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any
Debenture shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to SECTION 3.07)
interest on such Debenture on the respective Stated Maturities expressed in such
Debenture (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment and the right to convert
such Debenture in accordance with Article XIV and such rights shall not be
impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies.
If the Trustee or any Debentureholder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Debentureholder, then and in every such case the Company,
the Trustee and the Debentureholders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the
Debentureholders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shale, 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.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debenture to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of
38
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the Trustee or to the Debentureholders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Debentureholders, as the case may be.
SECTION 5.12. Control by Debentureholders.
The Holders of a majority in principal amount of the Outstanding Debentures
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) such direction shall not be prejudicial to Holders not joining
therein or expose the Trustee to personal liability.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Debentures may on behalf of the Holders of all the Debentures waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debenture, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Debenture affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent there on.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture by
his acceptance thereof shall be deemed to have agreed, that any court
39
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this SECTION 5.14 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding in the aggregate more than 10% in principal amount of
the Outstanding Debentures, or to any suit instituted by any Debentureholder for
the enforcement of the payment of the principal of (or premium, if any) or
interest on any Debenture on or after the respective Stated Maturities expressed
in such Debenture (or in the case of redemption, on or after the Redemption
Date) or for the enforcement of a right to the conversion of any Debenture.
SECTION 5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied
40
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such 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) In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) 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
(1) this subsection (c) shall not be construed to limit the effect of
subsection (a) of this SECTION 6.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) 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 under SECTION 5.12 received by the Trustee.
(d) No provisions of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
41
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of paragraphs (a),
(b) and (c) of this SECTION 6.01.
SECTION 6.02. Notice of Default.
Within 90 days after the occurrence of any default hereunder, the Trustee
shall transmit by mail to all Debentureholders, as their names and addresses
appear in the Debenture Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any Debenture or the making of any Sinking Fund
payment when due, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
Debentureholders; and provided, further, that in the case of any default of the
character specified in SECTION 5.01 (b) no such notice to Debentureholders shall
be given until at least 60 days after the occurrence thereof. For the purpose of
this SECTION 6.02, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default.
SECTION 6.03. Certain Rights of Trustee.
Except as otherwise provided in SECTION 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
42
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Debentureholders pursuant to this Indenture, unless such
Debentureholders shall have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(f) 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, direction, consent, order, bond,
debenture or other paper or document but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(h) the Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized by this
Indenture or within its rights and powers hereunder.
43
SECTION 6.04. No Responsibility for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Debentures. The Trustee shall not be accountable for the use or
application by the Company of Debentures or the proceeds thereof.
SECTION 6.05. May Hold Debentures.
The Trustee, any Paying Agent, Debenture Registrar or any other agent of
the Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Debentures and, subject to SECTION 6.08 and SECTION
6.13, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Debenture Registrar or such other agent.
SECTION 6.06. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributa-
44
ble to its negligence or bad faith, all such reimbursements shall be made
with interest at the rate borne by the Debentures; and
(3) to indemnify the Trustee for, and to hold it 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 trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent.
The Company need not reimburse any expense or indemnity against any loss or
liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this SECTION 6.07, the
Trustee shall have a lien prior to the Debentures on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Debentures.
When the Trustee incurs expenses or renders services after an Event of
Default specified in SECTION 5.01(c) or (d) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Federal Bankruptcy Code or any other applicable Federal
or state law.
SECTION 6.08. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this SECTION 6.08, it shall, within 90 days after ascertaining that
it has such conflicting interest, either eliminate such conflicting interest or
resign in the manner and with the effect hereinafter specified in this Article
VI.
(b) In the event that the Trustee shall fail to comply with the provisions
of subsection (a) of this SECTION 6.08, the Trustee shall, within ten days after
the expiration of such 90-day period, transmit by mail notice
45
of such failure to the Debentureholders as their names and addresses appear in
the Debenture Register.
(c) For the purposes of this SECTION 6.08, the Trustee shall be deemed to
have a conflicting interest if
(1) the Trustee is trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other indenture is
a collateral trust indenture under which the only collateral consists of
Debentures issued under this Indenture, provided that there shall be
excluded from the operation of this paragraph (1) (A) the Indenture dated
as of February 15, 1981 between the Company and First National Bank in
Dallas, as Trustee, for which MBank Dallas, National Association, is the
successor trustee, pursuant to which the Company's 11% Convertible
Subordinated Debentures due February 15, 2006 were issued and (B) any other
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are
outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are hereafter
qualified under the TIA, unless the Commission shall have found and
declared by order pursuant to SECTION 305(b) or SECTION 307(c) of the
TIA that differences exist between the provisions of this Indenture of
the provisions of such other indenture or indentures which are so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture and
such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture and such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under one or more of such other indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Debentures or an underwriter for the Company;
46
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the Company
who is currently engaged in the business of underwriting, except that (i) one
individual may be a director or an executive officer, or both, of the Trustee
and a director or an executive officer, or both, of the Company but may not be
at the same time an executive officer of both the Trustee and the Company; (ii)
if and so long as the number of directors of the Trustee in office is more than
nine, one additional individual may be a director or an executive officer, or
both, of the Trustee and a director of the Company; and (iii) the Trustee may be
designated by the Company or by any underwriter for the Company to act in the
capacity of transfer agent, registrar, custodian, paying agent, fiscal agent,
escrow agent, or depositary, or in any other similar capacity, or, subject to
the provisions of paragraph (1) of this subsection (c), to act as trustee,
whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is beneficially
owned either by the Company or by any director, partner, or executive officer
thereof, or 20% or more of such voting securities is beneficially owned,
collectively, by any two or more of such persons; or 10% or more of the voting
securities of the Trustee is beneficially owned either by an underwriter for the
Company or by any director, partner or executive officer thereof, or is
beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral security
for an obligation which is in default (as hereinafter in this subsection (c)
defined), (i) 5% or more of the voting securities, or 10% or more of any other
class of security, of the Company not including the Debentures issued under this
Indenture and securities issued under any other indenture under which the
Trustee is also trustee, or (ii) 10% or more of any class of security of an
underwriter for the Company;
47
(7) the Trustee is the beneficial owner of, or holds as collateral security
for an obligation which is in default (as hereinafter in this subsection (c)
defined), 5% or more of the voting securities of any person who, to the
knowledge of the Trustee, owns 10% or more of the voting securities of, or
controls directly or indirectly or is under direct or indirect common control
with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral security
for an obligation which is in default (as hereinafter in this subsection (c)
defined), 10% or more of any class of security of any person who, to the
knowledge of the Trustee, owns 50% or more of the voting securities of the
Company; or
(9) the Trustee owns, on May 15 in any calendar year, in the capacity of
executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of 25%
or more of the voting securities, or of any class of security, of any person,
the beneficial ownership of a specified percentage of which would have
constituted a conflicting interest under paragraph (6), (7), or (8) of this
subsection (c). As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator, or testamentary trustee of
an estate which included them, the provisions of the preceding sentence shall
not apply, for a period of two years from the date of such acquisition, to the
extent that such securities included in such estate do not exceed 25% of such
voting securities or 25% of any such class of security. Promptly after May 15 in
each calendar year, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such May 15. If the
Company fails to make payment in full of the principal of (or the premium, if
any), or interest on, any of the Debentures when and as the same becomes due and
payable, and such failure continues for 30 days thereafter, the Trustee shall
make a prompt check of its holdings of such securities in any of the above-
mentioned capacities as of the date of the expiration of such 30-day period, and
after such date, notwithstanding the foregoing provisions of this paragraph (9),
all such securities so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure shall continue,
be considered as though beneficially
48
owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this
subsection (c).
The specification of percentages in paragraphs (5) to (9), inclusive, of
this subsection (c) shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (c)
only (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed to be "in default"
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (iii) the Trustee shall not be deemed to be
the owner or holder of (A) any security which it holds as collateral security,
as trustee or otherwise, for an obligation which is not in default as defined in
clause (ii) above, or (B) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (C) any security
which it holds as agent for collection, or as custodian, escrow agent, or
depositary, or in any similar representative capacity.
(d) For the purposes of this SECTION 6.08:
(1) The term "underwriter" when used with reference to the Company means
every person who, within three years prior to the time as of which the
determination is made, has purchased from the Company with a view to, or has
offered or sold for the Company in connection with, the distribution of any
security of the outstanding at such time, or has participated or has had a
direct or indirect participation in any such undertaking, or has participated or
has had a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest was limited
to a commission from an underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission.
49
(2) The term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organIzation
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph (3), the term "trust" shall include only
a trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Debentures.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this SECTION 6.08 shall be calculated in accordance with the following
provIsions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this SECTION 6.08 (each of
whom is referred to as a "person" in this subsection (e)) means such amount
of the outstanding voting securities of such person as entitles the holder
or holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
50
(2) A specified percentage of a class of securities of a person means such
percentage of the aggregate amount of securities of the class outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of shares
if relating to capital shares, and the number of units if relating to any other
kind of security.
(4) The term "outstanding" means issued and not held by or for the account
of the issuer. The following securities shall not be deemed outstanding within
the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced by
such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another security
if both securities confer upon the holder or holders thereof substantially the
same rights and privileges; provided, however, that, in the case of secured
evidences of indebtedness, all of which are issued under a single indenture,
differences in the interest rates or maturity dates of various series thereof
shall not be deemed sufficient to constitute such series different classes and
provided, further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not be deemed
sufficient
51
to constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof or of the District of Columbia, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or state authority. If such corporation publishes reports of condition
at least annually, pursuant, to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this SECTION 6.09,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this SECTION 6.09, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article VI.
SECTION 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under SECTION 6.11.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of a
majority in principal amount of the Outstanding Debentures delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with SECTION 6.08(a) after
written request therefor by the Company or by any Debentureholder who has
been a bona fide Holder of a Debenture for at least six months, or
52
(2) the Trustee shall cease to be eligible under SECTION 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Debentureholder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to SECTION 5.14, any Debentureholder who has been a
bona fide Holder of a Debenture 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.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company
by a Board Resolution shall promptly appoint a successor Trustee. If within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Debentures delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Debentureholders and
accepted appointment in the manner hereinafter provided, any Debentureholder who
has been a bona fide Holder of a Debenture for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing or delivering
written notice of such event, with postage or delivery charges prepaid, to the
Debentureholders as their names and addresses appear in the Debenture Register.
Each notice shall include the name of the successor Trustee and the address of
its principal corporate trust office.
53
SECTION 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute and deliver to
the Company an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on request of the Company or the successor Trustee, such retiring Trustee
shale, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article VI.
SECTION 6.12. 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 all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Debentures.
54
SECTION 6.13. Limitation of Rights of Trustee as Creditor.
(a) Except as otherwise expressly provided in this SECTION 6.13, if the
Trustee in its individual capacity shall be or shall become a creditor, directly
or indirectly, secured or unsecured, of the Company within four months prior to
a default, as defined in subsection (e) of this SECTION 6.13, or subsequent to
such a default, then, unless and until such default shall be cured, the Trustee
shall set apart and hold in a special account for the benefit of the Trustee
individually, the Holders of the Debentures and the holders of other indenture
securities (as defined in subsection (e) of this SECTION 6.13):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection (a), or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composItion thereof, or otherwise, after the beginning of such four months'
period, or any amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(3) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
(ii) the proceeds of the bona fide sale of any such claim by the Trustee to
a third person, and (iii) distributions made in cash, securities or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganIzation pursuant to the Federal
Bankruptcy Code or applicable state law;
55
(4) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four months' period;
(5) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any claim, if such claim was created after the beginning of such four
months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default as defined in
subsection (c) of this SECTION 6.13 would occur within four months; or
(6) to receive payment on any claim referred to in paragraph (4) or
(5) of this subsection (a), against the release of any property held as
security for such claim as provided in paragraph (4) or (5) of this
subsection (a), as the case may be, to the extent of the fair value of such
property.
For the purposes of paragraphs (4), (5) and (6) of this subsection (a),
property substituted after the beginning of such four months' period for
property held as security at the time of such substitution shall, to the extent
of the fair value of the property released, have the same status as the property
released, and, to the extent that any claim referred to in any such paragraphs
(4), (5) and (6) of this subsection (a) is created in renewal of or in
substitution for or for the purpose of repaying or refunding any preexisting
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
(b) If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Debentureholders and the holders of other indenture
securities in such manner that the Trustee, the Debentureholders and the holders
of such indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Code or applicable state law, the same percentage of their
respective claims figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and
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before crediting to the respective claims of the Trustee and the Debenture-
holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable state law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
subsection (b), with respect to any claim, the term "dividends" shall include
any distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable state law, whether such distribution is made in cash, securities, or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Debentureholders, and
the holders of other indenture securities, in accordance with the provisions of
this subsection (b), the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to
give to the provisions of this subsection (b) due consideration in determining
the fairness of the distributions to be made to the Trustee and the
Debentureholders and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary to liquidate
or to appraise the value of any securities or other property held in such
special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this subsection (b) as a
mathematical formula.
(c) Any Trustee which has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this SECTION 6.13
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this SECTION 6.13 if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four months' period; and
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(ii) such receipt of property or reduction of claim occurred within four
months after such resignation or removal.
(d) There shall be excluded from the operation of this
SECTION 6.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Debentureholders as provided in SECTIONS
7.03(a), (b) and (c);
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (e) of this
SECTION 6.13;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of SECTION 25 (a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the Company;
or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptance or obligations which fall within the
classification of self-liquidating paper as defined in subsection (e) of
this SECTION 6.13.
(e) For the purposes of this SECTION 6.13 only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Debentures or upon other
indenture securities when and as such principal or interest becomes due and
payable.
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(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this SECTION 6.13, and (iii)
under which a default exists at the time of the apportionment of the funds
and property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale or the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Debentures.
ARTICLE VII
DEBENTUREHOLDERS LIST AND REPORTS BY TRUSTEE
AND COMPANY
SECTION 7.01. Company to Furnish Trustee Names and Addresses of
Debentureholders.
The Company will furnish or cause to be furnished to the Trustee (a) semi-
annually, not more than 15 days after each Regular Record Date, a list in such
form as the Trustee may reasonably require, of the names and addresses of the
Debentureholders as of such Regular Record Date, and (b) at such other times as
the Trustee may request in writing, within 30 days after receipt by the Company
of any such request, a list of similar form
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and content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Debenture
Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to Debentureholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Debentures contained in the
most recent list furnished to it as provided in SECTION 7.01 and the names and
addresses of Holders of Debentures received by the Trustee in its capacity as
Debenture Registrar.
The Trustee may destroy any list furnished to it as provided in SECTION
7.01 upon receipt of a new list so furnished.
(b) If three or more Holders of Debentures (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof satisfactory to it that each such applicant has owned a
Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Debentures with respect to their rights under
this Indenture or under the Debentures and is accompanied by a copy of the form
of proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five business days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with SECTION 7.02(a), or
(ii) inform such applicants as to the approximate number of Holders of
Debentures whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with SECTION 7.02(a), and as to the
approximate cost of mailing to such Debentureholders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Debentureholder whose name and address appear in the information
preserved at the time by the Trustee in accordance with SECTION
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7.02(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the Commission together with
a copy of the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best interests
of the Holders of Debentures or would be ill violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of the Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders of Debentures in accordance with
SECTION 7.02 (b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under SECTION 7.02 (b).
SECTION 7.03. Reports by Trustee.
(a) The term "reporting date", as used in this SECTION 7.03 means May 15.
Within 60 days after the reporting date in each year, the Trustee shall transmit
by mail to all Debentureholders, as their names and
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addresses appear in the Debenture Register, a brief report dated as of such
reporting date with respect to:
(1) its eligibility under SECTION 6.09 and its qualifications under
SECTION 6.08, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said SECTIONS, a written
statement to such effect;
(2) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the reporting date, and for
the reimbursement of which it claims or may claim a lien or charge, prior
to that of the Debentures, on any property or funds held or collected by it
as Trustee, except that the Trustee shall not be required (but may elect)
to report such advances if such advances so remaining unpaid aggregate not
more than 1/2 of 1% of the principal amount of the Debentures Outstanding
on the reporting date:
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Debentures) to the Trustee in its individual capacity, on the reporting
date, with a brief description of any property held as collateral security
therefor, except an indebtedness based upon a creditor relationship arising
in any manner described in SECTION 6.13(b) (2), (3), (4) or (6);
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the reporting date;
(5) any additional issue of Debentures which the
Trustee has not previously reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Debentures, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with SECTION 6.02.
(b) the Trustee shall transmit by mail to all Debentureholders, as their
names and addresses appear in the Debenture Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted
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pursuant to subsection (a) of this SECTION 7.03 (or if no such report has yet
been so transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Debentures, on property or funds held or collected by it as Trustee, and
which it has not previously reported pursuant to this subsection (b) except that
the Trustee shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of the Debentures Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with each stock exchange upon which
the Debentures may be listed and also with the Commission. The Company will
notify the Trustee when the Debentures are listed on any stock exchange.
SECTION 7.04. Reports by Company.
The Company will
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may for time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to SECTION 13 or SECTION 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said SECTIONS, it
will file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to SECTION 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to
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compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit by mail to all Holders of Debentures as their names and
addresses appear in the Debenture Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to subsections (a) and
(b) of this SECTION 7.04 as may be required by rules and regulations
prescribed from time to time by the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person, unless
(a) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America or any state or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest on all the
Debentures and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed and all applicable
provisions of Article XIV shall be complied with by such corporation or
Person, as the case may be;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing; and
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(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article VIII and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 8.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with SECTION 8.01, the successor corporation formed by such consolidation or
into which the Company is merged or to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein; provided, however, that no
such conveyance or transfer shall have the effect of releasing the Person named
as the "Company" in the first paragraph of this instrument or any successor
corporation which shall theretofore have become such in the manner prescribed in
this Article VIII from its liability as obligor and maker on any of the
Debentures.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Debenture holders.
Without the consent of the Holders of any Debentures, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
herein and in the Debentures contained; or
(b) to add to the covenants of the Company, for the benefit of the
Holders of the Debentures, or to surrender any right or power herein
conferred upon the Company; or
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(c) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such other provisions
shall not adversely affect the interests of the Holders of the Debentures;
or
(d) to secure payment of the Debentures equally and ratably with
certain other liens as and to the extent required by this Indenture; or
(e) to make provision with respect to the conversion rights of Holders
of Debentures pursuant to SECTION 14.06 hereof.
SECTION 9.02. Supplemental In dentures With Consent of Debentureholders.
With the consent of the Holders of not less than 66%% in principal amount
of the Outstanding Debentures, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may 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 modifying in any manner the rights of
the Holders of the Debentures under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby:
(a) change the Stated Maturity of the principal of, or any instalment
of interest on, any Debenture, or reduce the principal amount thereof or
the interest there on or any premium payable upon the redemption thereof,
or change the coin or currency in which any Debenture or the interest there
on is payable or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case
of redemption, on or after the Redemption Date) or increase the principal
amount of Debentures to be redeemed by any Sinking Fund Payment (as defined
in SECTION 11.01(b)); or
(b) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or
66
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(c) modify any of the provisions of this SECTION 9.02 or SECTION 5.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Debenture affected thereby; or
(d) adversely affect the right to convert the Debentures as provided
in Article XIV hereof.
It shall not be necessary for any Act of Debentureholders under this
SECTION 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.03. Execution of Supplemental In dentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture the Trustee shall be entitled to
receive, and (subject to SECTION 6.01) shall be fully protected in relying upon
an Officers' Certificate and Opinion of Counsel as to compliance with conditions
precedent and stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but 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.
SECTION 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the TIA as then in effect.
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SECTION 9.06. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Debentures.
SECTION 9.07. Modification of Subordination Provisions.
No supplemental indenture shall directly or indirectly modify any provision
of this Indenture so as to affect adversely the nature, manner or extent of the
subordination of the Debentures provided for in Article XIII hereof without the
written consent of the holders of all Senior Indebtedness then outstanding.
ARTICLE X
COVENANTS
SECTION 10.01. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and premium, if
any) and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
SECTION 10.02. Maintenance of Office or Agency.
The Company will maintain one or more offices or agencies in each Place of
Payment where Debentures may be presented or surrendered for payment, where
Debentures may be surrendered for registration of transfer or for exchange or
for conversion and where notices and demands to or upon the Company in respect
of the Debentures and this Indenture may be served. The Company hereby initially
designates the principal corporate trust office of Manufacturers Hanover Trust
Company of New York and the principal corporate trust office of the Trustee as
its agencies in the Borough of Manhattan, The City of New York and in Dallas,
Texas, respectively, and
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Manufacturers Hanover Trust Company of New York and the Trustee are hereby
appointed as the Company's agents at such offices, for such purposes. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain such office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the principal corporate
trust office of the Trustee, and the Company hereby appoints the Trustee its
agent to receive all such presentations, surrenders, notices and demands.
SECTION 10.03. Money for Debenture Payments to be Held iv Trust.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of (and premium, if any) or interest
on, any of the Debentures, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and will promptly notify the
Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of (and premium, if any) or interest on, and
Debentures, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium or interest,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this
SECTION 10.03, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Debentures in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
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(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures) in the making of any payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Any money deposited with the Trustee or any Paying Agent or then held by
the Company in trust for the payment of the principal of (and premium, if any)
or interest on any Debenture and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Debenture shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once in an Authorized Newspaper in
each Place of Payment, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 10.04. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year (which on the date hereof ends on October 31, or any
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other date designated by the Company as the end of a fiscal year of the
Company), commencing following the end of fiscal year 1986 of the Company, a
written statement signed by the Chairman of the Board, the President, a Senior
Vice President or a Vice President and by the Treasurer, an Assistant Treasurer,
the Secretary, an Assistant Secretary or an Assistant Controller of the Company,
stating, as to each signer thereof, that
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision and
(2) to the best of his knowledge, based on such review, the Company
has fulfilled all its obligations under this Indenture throughout such
year, and no Event of Default exists or, if there has been a failure in the
fulfillment of any such obligation or an Event of Default exists,
specifying each such failure or existing Event of Default known to him and
the nature and status thereof.
ARTICLE XI
REDEMPTION OF DEBENTURES; SINKING FUND
SECTION 11.01. Right of Redemption; Sinking Fund.
(a) Subject to the provisions of Article XIII hereof, the Company may, at
its option, redeem all, or from time to time any part, of the Debentures on any
date prior to Maturity by payment of the applicable Redemption Price set forth
in the form of Debenture contained in SECTION 2.02 hereof, together with accrued
interest to the Redemption Date; provided, however, that the Company may not
redeem any of the Debentures prior to April 22, 1989 unless, for a period of 20
successive Business days ending within five days of the date of notice of
redemption, the Current Market Price for the Common Stock has exceeded 150% of
the then effective conversion price of the Debentures.
(b) The Company covenants to pay to the Trustee or any Paying Agent, for
application on April 15 in each year commencing with the year 1996 to and
including the year 2010 (hereinafter called a "Sinking Fund Payment Date"), as
and for a mandatory Sinking Kind for the redemption of Debentures, a sum
(hereinafter called the "Sinking Fund Payment") in cash sufficient in each
instance to redeem, at 100% of the principal amount
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thereof, together with accrued interest to the Redemption Date (said percentage
of principal amount being hereinafter called the "Sinking Fund Redemption
Price") Debentures in the principal amount of $2,250,000 (or such lesser amount
equal to the total principal amount of Debentures then Outstanding); provided,
however, that the obligation of the Company to make any Sinking Fund Payment in
cash may, at the option of the Company, and as specified by it in an Officers'
Certificate delivered to the Trustee on or before the February 15 next preceding
any such April 15, be reduced and satisfied to the extent of the aggregate
principal amount of (i) any Debentures delivered to the Trustee by the Company
for cancellation prior to such February 15, (ii) any Debentures redeemed prior
to such February 15 otherwise than through the operation of the Sinking Fund,
and (iii) any Debentures converted into Common Stock pursuant to Article XIV
here of and delivered to the Trustee for cancellation prior to such February 15
and in each case under clauses (i), (ii) and (iii) not theretofore made the
basis for the reduction of a Sinking Fund Payment, and each such Officers'
Certificate shall contain a statement that such Debentures have not theretofore
been made the basis for the reduction of a Sinking Fund Payment.
(c) As soon as practicable after February 15, in each year commencing with
1996, the Trustee shall take the action herein specified to call for redemption
on the next succeeding April 15, at the Sinking Fund Redemption Price, together
with accrued interest to the Redemption Date, an amount of Debentures sufficient
to exhaust, as nearly as practicable, the sums then held by it in the Sinking
Fund or to be paid to it prior to such April 15 for the Sinking Fund pursuant to
SECTION 11.01 (b); provided, however, that if such sums aggregate less than
$225,000, such action shall not be taken unless the Company shall so request the
Trustee in writing. The Company hereby irrevocably authorizes the Trustee to
give notice in the name of the Company of the redemption of such Debentures, in
the manner and with the effect specified in this Article XI, and stating in such
notice that such redemption is for the Sinking Fund.
(d) The Company's obligation to make a Sinking Fund Payment shall
automatically be reduced by an amount equal to the Sinking Fund Redemption Price
allocable to any Debentures or portions thereof called for redemption pursuant
to SECTION 11.01 (c) on any April 15 and converted into Common Stock pursuant to
Article XIV hereof; provided, that if the Trustee
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is not the conversion agent for the Debentures, the Company or such conversion
agent shall give the Trustee written notice prior to the Redemption Date of the
principal amount of Debentures or portions thereof so converted.
SECTION 11.02. Applicability of Article.
Redemption of Debentures at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article XI.
SECTION 11.03. Election to Redeem; Notice to Trustee.
In case of any redemption at the election of the Company of less than all
the Debentures, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee) notify the Trustee of such Redemption Date and of the principal amount
of Debentures to be redeemed.
SECTION 11.04. Selection by Trustee of Debentures to be Redeemed.
If less than all the Debentures are to be redeemed, the particular
Debentures to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Debentures not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Debentures of a denomination larger than $1,000. The
portions of the principal of Debentures so selected for partial redemption shall
be equal to $1,000 or an integral multiple thereof. If any Debenture selected
for partial redemption is converted in part before the termination of the
conversion right with respect to the portion of the Debenture so selected, the
converted portion of such Debenture shall be deemed to be the portion selected
for redemption.
The Trustee shall promptly notify the Company in writing of the Debentures
selected for redemption and, in the case of any Debenture selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debentures shall
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relate, in the case of any Debenture redeemed or to be redeemed only in part, to
the portion of the principal of such Debenture which has been or is to be
redeemed.
SECTION 11.05. Notice of Redemption.
Notice of redemption shall be mailed or delivered, with postage or delivery
charges prepaid, not less than 20 nor more than 60 days prior to the Redemption
Date, to each Holder of Debentures to be redeemed, at his address appearing in
the Debenture Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Debentures are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the Debentures to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture, and that interest thereon shall cease
to accrue from and after said date,
(5) the place where such Debentures are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in each Place of Payment,
(6) if such be the case, that such Debentures are to be redeemed
through operation of the Sinking Fund, and
(7) the current conversion price or conversion rate of such
Debentures, the place or places where such Debentures may be surrendered
for conversion, that Holders who wish to convert must comply with the
eleventh paragraph on the reverse of the Debentures and the time at which
the right to convert such Debentures will terminate in accordance with this
Indenture.
Notice of redemption of Debentures to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company.
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SECTION 11.06. Deposit of Redemption Price.
Prior to any Redemption Date or Sinking Fund Payment Date, as the case may
be, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in SECTION 10.03) an amount of money in immediately available funds
sufficient to pay the Redemption Price, together with accrued interest to the
Redemption Date or Sinking Fund Payment Date, as the case may be, of all the
Debentures which are to be redeemed on that date.
SECTION 11.07. Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, together with accrued interest thereon to
the Redemption Date and from and after such date (unless the Company shall
default in the payment of the Redemption Price) such Debentures shall cease to
bear interest. Upon surrender of such Debentures for redemption in accordance
with said notice, such Debentures shall be paid by the Company at the Redemption
Price, together with accrued interest thereon to the Redemption Date.
Installments of interest on any Debenture called for redemption, the Stated
Maturity of which installments is on or prior to the Redemption Date, shall be
payable (but without interest thereon, unless the Company shall default in the
payment thereof) to the Holders of such Debentures registered as such on the
relevant Regular Record Dates according to their terms and the provisions of
SECTION 3.07.
If any Debenture called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Debentures.
SECTION 11.08. Debentures Redeemed in Part.
Any Debenture which is to be redeemed only in part shall be surrendered at
a Place of Payment (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder
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thereof or his attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Debenture without service charge, a new Debenture or Debentures, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Debenture so surrendered.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Debenture, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors, as such, of the Company or
of any successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Debentures
or implied therefrom. Any and all such personal liability, either at common law
or in equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, stockholder, officer or director, as
such, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Debentures or implied therefrom, are hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issue of such Debentures.
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ARTICLE XIII
SUBORDINATION OF DEBENTURES
SECTION 13.01. Agreement of Subordination.
The Company covenants and agrees, and each holder of Debentures, by his
acceptance thereof, likewise covenants and agrees, that the indebtedness
evidenced by the Debentures and the payment of the principal thereof and
premium, if any, and interest thereon shall be subordinate and subject in right
of payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full of all Senior Indebtedness. The provisions of this Article XIII
are made for the benefit of the holders of Senior Indebtedness, and such holders
shall, at any time, be entitled to enforce such provisions against the Company
or any Debentureholder.
SECTION 13.02. Priority of Senior Indebtedness on Distribution.
(a) In the event of (i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relative to the Company or its creditors or its property, (ii) any
proceeding for voluntary liquidation, dissolution or other winding up of the
Company whether or not involving insolvency or bankruptcy proceedings, and (iii)
any assignment for the benefit of creditors or any other marshalling of the
assets of the Company, then, and in any such event, all Senior Indebtedness
(including interest accruing on such Senior Indebtedness after the date of
filing of a petition or other action commencing any such proceeding) shall first
be paid in full before any payment or distribution of any character, whether in
cash, securities or other property (other than shares of stock of the Company,
as reorganized or readjusted, or securities of the corporation provided for by a
plan of reorganization or readjustment, the payment of which is subordinated to
the payment of the Senior Indebtedness), shall be made on account of the
Debentures; and any payment or distribution of any character, whether in cash,
securities or other property, which would otherwise, but for the provisions of
this SECTION 13.02, be payable or deliverable in respect of the Debentures shall
be paid or delivered directly to the holders of Senior Indebtedness (or their
duly authorized representatives or the trustee or trustees under any indenture
pursuant to which any Senior Indebtedness is outstanding), in the proportions in
which they hold the same, until all Senior Indebtedness shall have
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been paid in full. In case, despite the foregoing provisions, any payment or
distribution shall, in any such event, be paid or delivered to any Holder of the
Debentures or to the Trustee for their benefit before all Senior Indebtedness
shall have been paid in full, such payment or distribution shall be held in
trust for and so paid and delivered to the holders of Senior Indebtedness (or
their duly authorized representatives or the trustee or trustees under any
indenture pursuant to which any Senior Indebtedness is outstanding), in the
proportions in which they hold the same, until all Senior Indebtedness shall
have been paid in full.
(b) The Company shall give prompt written notice to the Trustee of any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, assignment, marshalling of assets or similar proceeding of the
Company within the meaning of this SECTION 13.02. Upon any payment or
distribution of assets of the Company referred to in this Article XIII, the
Trustee, subject to the provisions of Article VI (as between itself and the
Debentureholders), any Paying Agent and the holders of the Debentures shall be
entitled to rely upon a certificate of the trustee in bankruptcy, receiver,
assignee for the benefit of creditors or other liquidating agent making such
payment or distribution, delivered to the Trustee or to the holders of
Debentures, for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed there on and all other facts pertinent thereto or
to this Article XIII.
(c) In the event that the Trustee determines that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
SECTION 13.02, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, as to the extent to which such person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such person under this SECTION 13.02, 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.
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SECTION 13.03. Subrogation of the Debentures.
Subject to the payment in full of all Senior Indebtedness, the Holders of
the Debentures shall be subrogated equally and ratably with the holders of all
other subordinated indebtedness of the Company that by its terms or by the terms
of this Indenture ranks on a parity with the Debentures and is entitled to like
rights of subrogation (such subordinated indebtedness being hereinafter in this
SECTION 13.03 referred to as ap~~~ passu indebtedness") to the rights of the
holders of Senior Indebtedness to receive payments or distributions of assets of
the Company made on Senior Indebtedness until the principal of and premium, if
any, and interest on the Debentures shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Debentures or a pari passu indebtedness, or the Trustee or the trustee with
respect to any pari passu indebtedness, would be entitled except for the
provisions of this Article XIII, and no payment over pursuant to the provisions
of this Article XIII to the holders of Senior Indebtedness by the Holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than the holders of Senior Indebtedness, and the Holders of Debentures or of
pari passu indebtedness, be deemed to be a payment by the Company to or on
account of Senior Indebtedness, it being understood that the provisions of this
Article XIII are and are intended solely for the purpose of defining the
relative rights of the Holders of the Debentures, the holders of other pari
passu indebtedness and the holders of Senior Indebtedness.
SECTION 13.04. No Impairment of Obligation to Pay.
Nothing contained in this Article XIII or elsewhere in this Indenture, or
in the Debentures, is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures, as and when the same shall become due and
payable in accordance with their terms, or to affect the relative rights of the
Holders of the Debentures and other creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or
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the holder of any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article XIII of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon exercise of any such
remedy.
SECTION 13.05. No Payments During Defaults on Senior Indebtedness.
In the event and during the continuation of any default or event of default
in respect of any Senior Indebtedness or under any agreement under which any
Senior Indebtedness was issued continuing beyond the period of grace, if any,
specified in such agreement, then, unless and until such default shall have been
cured or waived or shall have ceased to exist, no payment shall be made by the
Company and, except as provided in SECTION 13.09, no application of funds shall
be made by the Trustee or any Paying Agent with respect to the principal of (or
premium, if any) or interest on the Debentures or as a Sinking Fund for the
Debentures except that the Company's obligation to make Sinking Kind Payments
may be reduced in accordance with the provisions of clauses (i), (ii), and (iii)
of paragraph (b) of SECTION 11.01. Nothing in this SECTION 13.05 shall prevent
the Company from making, or the Trustee or any Paying Agent from receiving or
applying, any payment in connection with the redemption of Debentures if notice
of such redemption has been mailed pursuant to Article kl hereof prior to the
happening of such default with respect to any Senior Indebtedness.
SECTION 13.06. Right of Company to Make Payments at Any Time.
Nothing contained in this Article XIII or elsewhere in this Indenture, or
in any of the Debentures, shall prevent the Company from making payment of
principal of (or premium, if any) or interest on the Debentures or as a Sinking
Kind for the Debentures at any time except under the conditions described in
SECTION 13.02 or SECTION 13.05. Except in the circumstances described in the
preceding sentence, nothing contained in this Article XIII or elsewhere in this
Indenture, or in any of the Debentures, shall prevent the application by the
Trustee or any Paying Agent of any moneys deposited with it hereunder for the
purpose of the payment of or on account of the principal of (or premium, if any)
or interest on the Debentures or as a Sinking
Kind for the Debentures and, in any case, the
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Trustee or any Paying Agent may make any such application unless and until the
Trustee or such Paying Agent, respectively, shall have received the notice
provided for in SECTION 13.09 at the time specified therein.
SECTION 13.07. Certain Holders of Senior Indebtedness.
The Trustee, any paying or conversion agent, or Debenture Registrar may be
holders of Senior Indebtedness and shall be entitled to all the rights set forth
in this Article XIII in respect of any Senior Indebtedness at any time held by
it, to the same extent as any holder of Senior Indebtedness, and nothing in
SECTION 6.13 or elsewhere in this Indenture shall deprive the Trustee, any
Paying Agent, Debenture Registrar or conversion agent of any of its rights as
such holder. Nothing in this Article XIII shall apply to claims of or payments
to the Trustee under or pursuant to SECTION 6.07.
SECTION 13.08. Trustee to Effectuate Subordination.
Each holder of Debentures by his acceptance thereof authorizes and directs
the Trustee in his behalf to take such action as may be necessary or appropriate
to effectuate, as between Holders of the Debentures and holders of Senior
Indebtedness, the subordination as provided in this Article XIII and appoints
the Trustee his attorney-in-fact for any and all such purposes.
SECTION 13.09. Trustee Not Charged With Knowledge of Prohibition.
Notwithstanding any of the provisions of this Article XIII or any other
provision of this Indenture, neither the Trustee nor any Paying Agent shall at
any time be charged with knowledge of any default or event of default with
respect to any Senior Indebtedness as specified in SECTION 13.02 or SECTION
13.05 or the existence of any facts which would prohibit the making of any
payment of moneys to or by the Trustee or any Paying Agent, respectively, unless
and until the Trustee or such Paying Agent, respectively, shall have received
written notice thereof signed by an officer of the Company or by a holder of
Senior Indebtedness who shall have been certified by the Company or otherwise
established to the reasonable satisfaction of the Trustee to be such holder, or
by the trustee under any indenture pursuant to which Senior Indebtedness shall
be outstanding; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of SECTION 6.01 (as between itself and the
Debentureholders), or
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such Paying Agent, respectively, shall be entitled in all respects to assume
that no such default or event of default has occurred and that no such facts
exist; provided that if the Trustee or any Paying Agent shall not have received
with respect to such moneys the notice provided for in this SECTION 13.09 at
least ten days prior to the date upon which by the terms hereof any such moneys
may become payable for any purpose (including, without limitation, the payment
of either the principal of or premium, if any, or interest on any Debenture),
then, anything herein contained to the contrary notwithstanding, the Trustee or
such Paying Agent, respectively, shall have full power and authority to receive
such moneys and to apply the same to the purpose for which they were received,
and shall not be affected by any notice to the contrary which may be received by
it on or after such date; and provided that, if prior to the date of the mailing
of the notice of redemption of any Debentures pursuant to Article XI, the
Trustee or any Paying Agent shall not have received such notice with respect to
any moneys which may become payable in connection with the redemption of such
Debentures, then, anything herein contained to the contrary notwithstanding, the
Trustee or such Paying Agent, respectively, shall have full power and authority
to receive any moneys which may be paid to it for such purpose and to apply the
same to the redemption of such Debentures, and shall not be affected by any
notice to the contrary which may be received by it on or after such date of
mailing.
SECTION 13.10. Noncompliance Not to Affect Subordination.
(a) No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder of
Senior Indebtedness, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder of Senior Indebtedness may have or be otherwise charged with.
(b) Without limiting the generality of paragraph (a) of this SECTION 13.10,
the holders of Senior Indebtedness may, without affecting in any manner the
subordination of the payment of the principal of and premium, if any, and
interest on the Debentures, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment,
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change or extend the time of payment of, or renew or alter, any Senior
Indebtedness, or release any person liable for the payment of the Senior
Indebtedness or any security therefor, or amend or supplement any instrument
pursuant to which any Senior Indebtedness is issued, or exercise or refrain from
exercising any other of their rights under the Senior Indebtedness including,
without limitation, the waiver of default or event of default thereunder, all
without notice to or assent from the Holders of the Debentures or the Trustee.
SECTION 13.11. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.
The Trustee shall not have any fiduciary duty to any holder of Senior
Indebtedness, and shall not be liable to any such holder if it shall pay over or
distribute to the Holders of the Debentures or to the Company or to any other
person, moneys or assets to which any holder of Senior Indebtedness shall be
entitled pursuant to this Article XIII or otherwise.
SECTION 13.12. Parity With 11% Convertible Subordinated Debentures.
The indebtedness evidenced by the Debentures issued hereunder shall not be
"senior indebtedness" as such term is defined in the Indenture dated as of
February 15, 1981 between the Company and First National Bank in Dallas, as
Trustee, for which MBank Dallas, National Association, is the successor trustee,
but shall rank on a parity with the debentures issued under such Indenture and
shall be entitled to like rights of subrogation.
ARTICLE XIV
CONVERSION OF DEBENTURES
SECTION 14.01. Conversion Privilege.
Subject to and upon compliance with the provisions of this Article XIV, the
Holder of any Debenture shall have the right, at his option, at any time prior
to the close of business on April 15, 2011 (or if such day is not a Business
day, on the immediately preceding Business day), or in case such Debenture or
portion thereof is called for redemption, then, in respect of such Debenture or
portion thereof called for redemption, until and including but not later than
the close of business on the third Business day immediately preceding the
Redemption Date (unless the Company shall
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default in the payment of the Redemption Price thereof, in which case at any
time prior to the close of business on the date of actual redemption), to
convert the principal amount of such Debenture, or any portion of such principal
amount (which shall be $1,000 or an integral multiple thereof), into fully paid
and nonassessable shares of Common Stock (as such Common Stock shall then be
constituted) at the Conversion Price in effect at the Date of Conversion (as
defined in SECTION 14.02).
SECTION 14.02. Manner of Exercise of Conversion Privilege
In order to exercise the conversion privilege set forth in SECTION 14.01,
the Holder of any Debenture to be converted in whole or in part shall surrender
such Debenture to the Company during usual business hours at any of its offices
or agencies maintained for the purpose as provided in SECTION 10.02, and at the
time of such surrender shall give written notice, in substantially the form set
forth on the reverse of such Debenture, to the Company at such office or agency
that the Bolder elects to convert such Debenture or the portion thereof
specified in such notice. Such notice shall also state the name or names (with
address or addresses) in which the certificate or certificates for shares of
Common Stock which shall be deliverable upon such conversion shall be
registered. If any Debenture, or part thereof, is surrendered for conversion at
any time after the Regular Record Date with respect to an Interest Payment Date
and before such Interest Payment Date, then such Debenture, or part thereof
surrendered for conversion, shall be accompanied by cash in an amount equal to
the interest that would have accrued on such Debenture, or part thereof
surrendered for conversion, from the Date of Conversion (as defined in this
SECTION 14.02) to such Interest Payment Date at the rate of 714% per annum;
provided, however, that no such payment need be made if there shall exist at the
Date of Conversion a default in the payment of interest on the Debenture. The
funds so delivered shall be paid to the Company on or after such Interest
Payment Date unless the Company shall default in the payment of interest due on
such Interest Payment Date, in which event such funds shall be repaid to the
Holder delivering the same. As promptly as practicable after the receipt of such
notice and the surrender of such Debenture as aforesaid, the Company shall,
subject to the provisions of SECTION 14.08, issue and deliver at such office or
agency to such Holder, or on his written order, a certificate or certificates
for the number of full shares of Common Stock deliverable on such conversion of
such Debenture
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or portion thereof in accordance with the provisions of this Article XIV and
cash, as provided in SECTION 14.03, in respect of any fraction of a share of
Common Stock otherwise deliverable upon such conversion. In case any Debenture
of a denomination greater than $1,000 shall be surrendered for partial
conversion, the Company shall, subject to the provisions of SECTION 14.08,
execute and register and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Debenture so surrendered, without charge
to such Holder, except as provided in SECTION 14.08, a new Debenture or
Debentures of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the Debentures so surrendered. Such conversion shall
be deemed to have been effected immediately prior to the close of business on
the date (herein called the "Date of Conversion") on which such notice shall
have been received by the Company and such Debenture shall have been surrendered
as aforesaid, and the person or persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become on the Date of Conversion the holder
or holders of record of the shares represented thereby; provided, however, that
any such surrender on any date when the stock transfer books of the Company
shall be closed shall constitute the person or persons in whose name or names
the certificate or certificates for such shares are to be issued as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall nevertheless be at the Conversion Price in effect at the close
of business, and such Debenture shall cease to bear interest, on the Date of
Conversion. Subject to the aforesaid requirement for a payment in the event of a
conversion after a Regular Record Date and before the related Interest Payment
Date, no payment or adjustment shall be made upon conversion on account of any
interest accrued on any Debenture converted or for dividends or distributions on
any shares of Common Stock delivered upon conversion of any Debenture.
SECTION 14.03. Fractional Shares.
No fractions of shares of Common Stock or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of Debentures. If more
than one Debenture shall be surrendered for conversion at one time by the same
Holder, the number of full shares of Common Stock which shall be deliverable
upon conversion thereof shall be computed
85
on the basis of the aggregate principal amount of the Debentures (or specified
portions thereof to the extent permitted hereby) so surrendered. If any fraction
of a share of Common Stock would, except for the provisions of this SECTION
14.03, be deliverable on the conversion of any Debenture or Debentures (or
specified portions thereof), the Company shall make payment in lieu thereof in
an amount of cash equal to the value of such fraction computed on the basis of
the Current Market Price of the Common Stock on the last Business day prior to
the Date of Conversion.
SECTION 14.04. Conversion Price.
The initial Conversion Price per share of Common Stock deliverable upon
conversion of the Debentures shall be as specified in the form of Debenture
hereinabove recited.
SECTION 14.05. Adjustment of Conversion Price.
The conversion price (herein called the "Conversion Price") shall be
subject to adjustment from time to time as follows:
(a) In case the Company shall (1) pay a dividend in shares of Common
Stock to holders of any class of capital stock of the Company, (2) make a
distribution in shares of Common Stock to holders of any class of capital
stock of the Company, (3) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock or (4) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, the Conversion Price in effect immediately prior to such
action shall be adjusted so that the Holder of any Debenture thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock which he would have owned immediately following such
action had such Debentures been converted immediately prior thereto. An
adjustment made pursuant to this subsection (a) shall become effective
immediately after the record date in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case
of a subdivision or combination.
(b) In case the Company shall issue rights or warrants to all holders
of Common Stock entitling them (for a period commencing no earlier than the
record date for the determination of holders of Common Stock entitled to
receive such rights or warrants and expiring not more than 45 days after
such record date) to subscribe for or
86
purchase shares of Common Stock (or securities convertible into Common
Stock) at a price per share less than the current market price (as
determined pursuant to subsection (d) below) of the Common Stock on such
record date, the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on such record
date, plus the number of shares of Common Stock which the aggregate
offering price of the offered shares of Common Stock (or the aggregate
conversion price of the convertible securities so offered) would purchase
at such current market price, and of which the denominator shall be the
number of shares of Common Stock so outstanding on such record date plus
the number of additional shares of Common Stock offered (or into which the
convertible securities so offered are convertible). Such adjustment shall
become effective immediately after such record date.
(c) In case the Company shall distribute to substantially all holders of
Common Stock shares of any class of stock other than Common Stock, evidences of
indebtedness or other assets (other than cash dividends out of retained
earnings), or shall distribute to substantially all holders of Common Stock
rights or warrants to subscribe to securities (other than those referred to in
subsection (b) above), then in each such case the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of such distribution by
a fraction of which the numerator shall be the current market price (determined
as provided in subsection (d) below) of the Common Stock on the record date
mentioned below less the then fair market value (as determined by the Board of
Directors of the Company, whose determination shall be conclusive evidence of
such fair market value) of the portion of the assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock, and of
which the denominator shall be such current market price of the Common Stock.
Such adjustment shall become effective immediately after the record date for the
determination of the holders of Common Stock entitled to receive such
distribution. Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants (other than those
87
referred to in subsection (b) above) ("Rights") pro rata to holders of
Common Stock, the Company may, in lieu of making any adjustment pursuant to this
SECTION 14.05, make proper provision so that each holder of a Debenture who
converts such Debenture (or any portion thereof) after the record date for such
distribution and prior to the expiration or redemption of the Rights shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion (the "Conversion Shares"), a number of
Rights to be determined as follows: (i) if such conversion occurs on or prior to
the date for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights to
which a holder of a number of shares of Common Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in accordance with
the terms and provisions of and applicable to the Rights; and (ii) if such
conversion occurs after the Distribution Date, the same number of Rights to
which a holder of the number of shares of Common Stock into which the principal
amount of the Debenture so converted was convertible immediately prior to the
Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) For the purpose of any computation under subsections (b) and (c) above,
the current market price of the Common Stock on any date shall be deemed to be
the average of the Current Market Prices of the Common Stock for 30 consecutive
trading days commencing 45 trading days before the date in question.
(e) In any case in which this SECTION 14.05 shall require that an
adjustment be made immediately following a record date, the Company may elect to
defer the effectiveness of such adjustment (but in no event until a date later
than the effective time of the event giving rise to such adjustment), in which
case the Company shall, with respect to any Debenture converted after such
record date and before such adjustment shall have become effective (i) defer
paying any cash payment pursuant to SECTION 14.03 or delivering to the Holder of
such Debenture the number of shares of Common Stock and other capital stock of
the Company deliverable upon such conversion in excess of the number of shares
of Common Stock and other capital stock of the Company
88
deliverable thereupon only on the basis of the Conversion Price prior to
adjustment, and (ii) not later than five business days after such adjustment
shall have become effective, pay to the Holder of such Debenture the appropriate
cash payment pursuant to SECTION 14.03 and issue to such Holder the additional
shares of Common Stock and other capital stock of the Company deliverable
on such conversion.
(f) No adjustment in the Conversion Price shall be required unless such
adjustment would result in an increase or decrease of at least 1% thereof,
provided, however, that any adjustments which by reason of this subsection (f)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article XIV shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be. Except as provided in subsections (a) and (b) above, the Conversion Price
shall not be adjusted for the issuance of Common Stock at less than either the
Current Market Price or the current Conversion Price, whether upon exercise of
present or future options, the conversion of present or future convertible
securities, or otherwise. Anything in this SECTION 14.05 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required under this SECTION 14.05, as it
in its discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights or warrants to purchase
stock or securities, or distribution of other assets (other than cash dividends)
hereafter made by the Company to the holders of Common Stock shall not be
taxable.
(g) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly (i) file with the Trustee and each office or agency
maintained for the purpose of conversion of Debentures as provided in SECTION
10.02 an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness of
such adjustment, and (ii) mail or cause to be mailed to the Holders of the
Debentures at their last addresses as they shall appear on the Debenture
Register a notice of such adjustment.
89
SECTION 14.06. Effect of Reclassifications, Consolidations, Mergers or Sales on
Conversion Privilege.
If any of the following shall occur, namely: (i) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of
Debentures (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation or merger to which the Company is a party
other than a merger in which the Company is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name, or par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination) in, outstanding
shares of Common Stock or (iii) any sale or conveyance of all or substantially
all of the property or business of the Company as an entirety, then the Company,
or such successor or purchasing corporation, as the case may be, shall
as a condition precedent to such reclassification, change, consolidation,
merger, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Debenture then outstanding shall
have the right to convert such Debenture into the kind and amount of shares of
stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of such
Debenture immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. Such supplemental indenture shall provide for
adjustments of the Conversion Price which shall be as nearly equivalent as may
be practicable to the adjustments of the Conversion Price provided for in this
Article XIV. The foregoing, however, shall not in anyway affect the right a
holder of a Debenture may otherwise have, pursuant to clause (ii) of the last
sentence of subsection (c) of SECTION 14.05, to receive Rights upon conversion
of a Debenture. If, in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger, sale
or conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Debentures
90
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this SECTION 14.06 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders of the Debentures upon the
conversion of their Debentures after any such reclassification, change,
consolidation, merger, sale or conveyance or to any adjustment to be made with
respect thereto, but may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
SECTION 14.07. Notice of Certain Events.
In case:
(a) the Company shall declare a dividend (or any other distribution)
payable to the holders of Common Stock otherwise than in cash; or
(b) the Company shall authorize the granting to the holders of
substantially all the Common Stock of rights to subscribe for or purchase
any shares of stock of any class or of any other rights; or
(c) the Company shall authorize any reclassification or change of
Common Stock (other than a subdivision or combination of its outstanding
shares of Common Stock), or any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required, or the sale or conveyance of all or substantially all
the property or business of the Company; or
(d) there shall be proposed any voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, the Company shall cause to be filed with the Trustee and at each office or
agency maintained for the purpose of conversion of the Debentures as provided in
SECTION 10.02, and shall cause to be mailed to the Holders of the
91
Debentures at their last addresses as they appear on the Debenture Register, at
least 20 days before the date hereinafter in this SECTION 14.07 specified (or
the earlier of the dates hereinafter in this SECTION 14.07 specified, in the
event that more than one date is specified), a notice stating the date on which
(1) a record is expected to be taken for the purpose of such dividend,
distribution or rights, or if a record is not to be taken, the date as of which
the holders of Common Stock of record are to be entitled to such dividend,
distribution or rights are to be determined, or (2) such reclassification,
change, consolidation, merger, sale, conveyance, dissolution, liquidation or
winding-up is expected to become effective and the date, if any is to be fixed,
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
sale, conveyance, dissolution, liquidation or winding-up. Failure to send such
notice or any defect in it shall not affect the validity of such transaction.
SECTION 14.08. Taxes on Conversions.
The issue of stock certificates on conversions of the Debentures and of new
Debentures on partial conversions of the Debentures shall be made without charge
to the converting Debentureholder for any tax in respect of the issue thereof.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any registration of transfer involved in the issue and delivery of
Common Stock or any new Debenture in any name other than that of the Holders of
any Debenture converted, and the Company shall not be required to so issue or
deliver any stock certificate or new Debenture unless and until the Person or
Persons requesting the registration of transfer shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 14.09. Company to Reserve Common Stock.
The Company shall reserve, free from preemptive rights, out if its
authorized but unissued or treasury shares of Common Stock, sufficient shares of
Common Stock to provide for the conversion of all the Debentures as such
Debentures are from time to time presented for conversion.
92
The Company covenants that it will in good faith and as expeditiously as
possible secure registration with or approval of any governmental authority
under any Federal or state law regulating offer or delivery of shares of Common
Stock upon conversion of the Debentures and to list such shares with or upon any
stock exchange on which the Common Stock is listed as of the Date of Conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Company will take all corporate action which may, in the opinion of counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
delivered upon conversion of the Debentures will be validly issued, fully paid
and nonassessable by the Company and free from all taxes, liens, security
interests and charges with respect to the issuance thereof.
SECTION 14.10. Disclaimer of Responsibility for Certain Matters.
Neither the Trustee nor any conversion agent (other than the Company) shall
at any time be under any duty or responsibility to any Holder of a Debenture to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the Officers' Certificate referred to in
SECTION 14.05(g), 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 (other than the Company) shall be accountable
with respect to the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Debenture; and neither the Trustee nor
any conversion agent (other than the Company) makes any representation with
respect thereto. Neither the Trustee nor any conversion agent (other than the
Company) shall be responsible for any failure of the Company to make any cash
payment or to issue, register the transfer of or deliver any shares of Common
Stock or stock certificates or other securities or property upon the surrender
of any Debenture for the purpose of
93
conversion or to comply with any of the covenants of the Company contained in
this Article XIV.
SECTION 14.11. Return of Money Deposited for Converted Debentures.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of (premium, if any) and interest on, any Debentures and
which shall not be required for such purposes because of the conversion of such
Debentures, as provided in this Article XIV, shall after such conversion be
repaid to the Company by the Trustee or such other payIng agent.
SECTION 14.12. Cancellation of Converted Debentures.
All Debentures delivered to the Company or any conversion agent upon
conversion pursuant to this Article XIV, shall be delivered to the Trustee for
cancellation.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
RECOGNITION EQUIPMENT INCORPORATED
[CORPORATE SEAL]
By /s/ XXXXXXX X. XXXXX, XX.
Xxxxxxx X. Xxxxx, Xx., President
Attest:
/s/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx, Secretary
MBANK DALLAS, NATIONAL ASSOCIATION,
as Trustee
[CORPORATE SEAL]
By /s/ X. X. XXXXXXXXX
X. X. Xxxxxxxxx, Vice President
Attest:
/s/ XXXXXX XXXXXXXXX
Xxxxxx Xxxxxxxxx, Trust Officer
94
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
Before me, the undersigned authority, on this day personally appeared
Xxxxxxx X. Xxxxx, Xx. and Xxxxxx X. Xxxxx, President and Secretary,
respectively, of Recognition Equipment Incorporated, a corporation, known to me
to be the persons whose names are subscribed to the foregoing instrument and
acknowledged to me that they executed the same as the act of said corporation
for the purposes and consideration therein expressed and in the capacities
therein stated.
Given under my hand and seal of office this 3rd day of April, 1986.
[SEAL] /s/ XXXXX X. XXXX
Notary Public in and for
The State of Texas
My Commission Expires:
June 29, 1989
95
STATE OF TEXAS )
) ss.:
COUNTY OF DALLAS )
Before me, the undersigned authority, on this day personally appeared X. X.
Xxxxxxxxx and Xxxxxx Xxxxxxxxx, Vice President and Trust Officer, respectively,
of MBank Dallas, National Association, a national banking association, known to
me to be the persons whose names are subscribed to the foregoing instrument and
acknowledged to me that they executed the same as the act of said national
banking association for the purposes and consideration therein expressed and in
the capacities therein stated.
Given under my hand and seal of office this 3rd day of April, 1986.
[SEAL]
/s/ XXXXXXXXX X. XXXXXX
Notary Public in and for
The State of Texas
My Commission Expires:
November 28, 1988
FIRST SUPPLEMENTAL INDENTURE
This First Supplemental indenture, dated as of November l, 1987 (the
"Supplemental indenture") is entered into by and among Recognition Equipment
incorporated, a corporation organized and existing under the laws of the State
of Delaware (the "Company"), MBank Dallas, National Banking Association (the
"Resigning Trustee"), and MTrust Corp, a Texas trust company (the "Successor
Trustee") in order to supplement and amend that certain Indenture dated April 3,
1986, among the Issuer and the Resigning Trustee, as amended to date (the
"Indenture"). Terms used herein which are not separately defined are used as
defined in the Indenture.
WHEREAS, the Resigning Trustee hereby indicates its desire to resign as
Trustee and to have its affiliate, the Successor Trustee, succeed it in such
capacity, and the Company is willing to accept the resignation of the Resigning
Trustee and to appoint the Successor Trustee in its place pursuant to the terms
of this Supplemental Indenture;
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, the parties hereto, for themselves and the benefit of the holders of the
Debentures without, preference, priority or distinction among them, agree as
follows:
1. Resignation and Appointment of Successor Trustee, Paying Agent and
------------------------------------------------------------------
Registrar. The Resigning Trustee hereby confirms its resignation as Trustee,
---------
Paying Agent and Registrar under the Indenture, as of the effective date of this
Supplemental Indenture and the effectiveness of the appointment of the Successor
Trustee as the Successor Trustee, Paying Agent and Registrar under the
Indenture. The Company hereby appoints and designates the Successor Trustee as
the Successor Trustee, Paying Agent and Registrar under the Indenture as of the
effective date of this Supplemental Indenture.
2. Amendments to Permit Successor Trustee to Serve. If to the extent
-----------------------------------------------
required under the Indenture in order to permit the Successor Trustee to serve
and qualify as the Trustee, the Indenture is hereby amended as follows:
(a) Notwithstanding any provision in the Indenture to the contrary,
the types of organizations permitted to serve as Trustee under the
Indenture shall be expanded to include any corporation incorporated under
Chapter 388, Acts of the 55th Legislature, Regular Session, 1957 (Article
1513a, Vernon's Texas Civil Statutes), as amended; and
(b) Notwithstanding any provision in the Indenture to the contrary,
provided that the Trustee satisfies the minimum capitalization requirements
set forth in SECTION 310(a)(2) of the Trust indenture Act, the separate
eligibility requirements set forth herein with respect to the capital and
surplus of the Trustee shall be deemed to have been satisfied if the parent
corporation of the affiliated group of corporations (as defined by SECTION
1504 of the Internal Revenue Code of 1986) of which the Trustee is a member
has filed an undertaking, pursuant to the Texas Substitute Fiduciary Act of
May 25, 1987, CH. 207, 1987 Texas Laws, with the Banking Commissioner of
the State of Texas evidencing its irrevocable undertaking to be fully
responsible for the acts and omissions of the Trustee, and such parent
company and its subsidiaries satisfy such capital and surplus requirements
on a consolidated basis.
(c) Notwithstanding any provision in the Indenture to the contrary,
the Trustee shall not be required to maintain any office within any
designated city within the State of Texas so long as the Trustee maintains
at least one office within such state.
3. Further Assurances. Upon request of any party to this Supplemental
------------------
indenture, the other parties to this Supplemental Indenture shall execute and
deliver such further instruments and do such further acts as may reasonably be
necessary or advisable to more effectually carry out the purposes of this
Supplemental indenture.
4. Notices. If required by the Indenture, notices of this Supplemental
--------
Indenture, and the appointment of the Successor Trustee shall be delivered to
the holders of the Debentures.
5. Continuation. Except as supplemented hereby, the Indenture
-------------
remains in full force and effect in accordance with its terms.
6. Counterparts. This Supplemental Indenture may be executed in one or
------------
more counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Supplemental
Indenture to be effective as of November 1, 1987.
[ SEAL ] Recognition Equipment Incorporated
Attest:
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. X'Xxxxx
___________________ Name: Xxxxxx X. X'Xxxxx
-------------------
Title: Vice President & Chief
----------------------
Financial Officer
MBANK DALLAS, N.A.
[ SEAL ]
Attest:
/s/ By: /s/ Xxxxxxxx Xxxxx
____________________ Name: Xxxxxxxx Xxxxx
Title: Trust Officer
MTRUST CORP
[ SEAL ]
Attest:
/s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
____________________ Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Vice President
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
Before me, the undersigned authority, on this day personally appeared
Xxxxxx X. X'Xxxxx , Vice President and CFO of Recognition Equipment Incorporated
------------------ ---------------------- ----------------------------------
, who being by me first duly sworn declared that he/she is the person who signed
the foregoing document, and acknowledged to me that he/she executed the same for
the purposes and consideration therein expressed, in the capacity therein stated
and as the act and deed of said corporation.
Given under my hand and seal of office on this the 12th day of
December, 1987.
/s/ Xxxxx Xxx Xxxxxxxx
-----------------------------
Notary Public, State of Texas
My Commission Expires: NOTARY PUBLIC XXXXX XXX XXXXXXXX
STATE OF TEXAS Notary Public State of Texas
12-4-88 My Commission Expires
______________________
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
Before me, the undersigned authority, on this day personally appeared
Xxxxxxxx Xxxxx, a Trust Officer of MBank Dallas, N.A., who being by me first
duly sworn declared that he/she is the person who signed the foregoing document,
and acknowledged to me that he/she executed the same for the purposes and
consideration therein expressed, in the capacity therein stated and as the act
and deed of said corporation.
Given under my hand and seal of office on this the 30th day of
October, 1987.
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Notary Public, State of Texas
My Commission Expires: NOTARY PUBLIC XXXXXX X. XXXXXX
STATE OF TEXAS Notary Public State of Texas
______________________ My Commission Expires 1/8/91
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
Before me, the undersigned authority, on this day personally appeared
Xxxxxx X. Xxxxxxxxx, an Assistant Vice President of MTrust Corp, who being by me
first duly sworn declared that he is the person who signed the foregoing
document, and acknowledged to me that he/she executed the same for the purposes
and consideration therein expressed, in the capacity therein stated and as the
act and deed of said corporation.
Given under my hand and seal of office on this the 30 day of
October, 1987.
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Notary Public, State of Texas
My Commission Expires: NOTARY PUBLIC XXXXXX X. XXXXXX
STATE SEAL Notary Public State of Texas
_____________________ My Commission Expires 1/8/91
