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AVATAR HOLDINGS INC.
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
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INDENTURE
Dated as of January __, 1998
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$100,000,000*
__% Convertible Subordinated Notes due 2005
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* Plus up to an additional $15,000,000 aggregate principal amount of __%
Convertible Subordinated Notes issuable upon exercise of the over-allotment
option granted to the Underwriters of the Notes.
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TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................ 3
SECTION 1.01 Definitions............................................... 3
SECTION 1.02 Compliance Certificates and Opinions...................... 10
SECTION 1.03 Form of Documents Delivered to Trustee.................... 10
SECTION 1.04 Acts of Holders; Record Dates............................. 11
SECTION 1.05 Notices, Etc., to Trustee and Company..................... 12
SECTION 1.06 Notice to Holders; Waiver................................. 13
SECTION 1.07 Conflict with Trust Indenture Act......................... 13
SECTION 1.08 Effect of Headings and Table of Contents.................. 13
SECTION 1.09 Successors and Assigns.................................... 13
SECTION 1.10 Separability Clause....................................... 14
SECTION 1.11 Benefits of Indenture..................................... 14
SECTION 1.12 GOVERNING LAW............................................. 14
SECTION 1.13 Legal Holidays............................................ 14
SECTION 1.15 Limitation on Individual Liability........................ 14
ARTICLE II.
SECURITY FORMS......................................................... 15
SECTION 2.01 Forms Generally........................................... 15
SECTION 2.03 Form of Reverse of Security............................... 18
SECTION 2.04 Form of Trustee's Certificate of Authentication........... 25
ARTICLE III.
THE SECURITIES......................................................... 25
SECTION 3.01 Title and Terms........................................... 25
SECTION 3.02 Denominations............................................. 26
SECTION 3.03 Execution, Authentication, Delivery and Dating............ 26
SECTION 3.04 Temporary Securities...................................... 27
SECTION 3.05 Registration, Registration of Transfer and Exchange....... 27
SECTION 3.06 Mutilated, Destroyed, Lost and Stolen Securities.......... 29
SECTION 3.07 Payment of Interest; Interest Rights Preserved............ 30
SECTION 3.08 Persons Deemed Owners..................................... 32
SECTION 3.09 Cancellation.............................................. 32
SECTION 3.10 Computation of Interest................................... 32
ARTICLE IV.
SATISFACTION AND DISCHARGE............................................. 32
SECTION 4.01 Satisfaction and Discharge of Indenture................... 32
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SECTION 4.02 Application of Trust Money................................ 34
SECTION 4.03 Reinstatement............................................. 34
ARTICLE V.
REMEDIES............................................................... 35
SECTION 5.01 Events of Default......................................... 35
SECTION 5.02 Acceleration of Maturity; Rescission and Annulment........ 37
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by
Trustee................................................... 38
SECTION 5.04 Trustee May File Proofs of Claim.......................... 39
SECTION 5.05 Trustee May Enforce Claims Without Possession of
Securities................................................ 40
SECTION 5.06 Application of Money Collected............................ 40
SECTION 5.07 Limitation on Suits....................................... 40
SECTION 5.08 Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert....................... 41
SECTION 5.09 Restoration of Rights and Remedies........................ 41
SECTION 5.10 Rights and Remedies Cumulative............................ 42
SECTION 5.11 Delay or Omission Not Waiver.............................. 42
SECTION 5.12 Control by Holders........................................ 42
SECTION 5.13 Waiver of Past Defaults................................... 43
SECTION 5.14 Undertaking for Costs..................................... 43
ARTICLE VI.
THE TRUSTEE............................................................ 43
SECTION 6.01 Certain Duties and Responsibilities....................... 44
SECTION 6.02 Notice of Defaults........................................ 45
SECTION 6.03 Certain Rights of Trustee................................. 45
SECTION 6.04 Not Responsible for Recitals or Issuance of Securities.... 46
SECTION 6.05 May Hold Securities....................................... 46
SECTION 6.06 Money Held in Trust....................................... 47
SECTION 6.07 Compensation and Reimbursement............................ 47
SECTION 6.08 Disqualification; Conflicting Interests................... 48
SECTION 6.09 Corporate Trustee Required; Eligibility................... 48
SECTION 6.10 Resignation and Removal; Appointment of Successor......... 48
SECTION 6.11 Acceptance of Appointment by Successor.................... 49
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business.................................................. 50
SECTION 6.13 Preferential Collection of Claims Against Company......... 50
SECTION 6.14 Appointment of Authenticating Agent....................... 50
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ARTICLE VII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY...................... 53
SECTION 7.01 Company to Furnish Trustee Names and Addresses of Holders. 53
SECTION 7.02 Preservation of Information; Communication to Holders..... 53
SECTION 7.03 Reports by Trustee........................................ 53
SECTION 7.04 Reports by Company........................................ 54
ARTICLE VIII.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE................... 54
SECTION 8.01 Company May Consolidate, Etc., Only on Certain Terms...... 54
SECTION 8.02 Successor Substituted..................................... 55
ARTICLE IX.
SUPPLEMENTAL INDENTURES................................................ 55
SECTION 9.01 Supplemental Indentures Without Consent of Holders........ 55
SECTION 9.02 Supplemental Indentures with Consent of Holders........... 56
SECTION 9.03 Execution of Supplemental Indentures...................... 57
SECTION 9.04 Effect of Supplemental Indentures......................... 57
SECTION 9.05 Conformity with Trust Indenture Act....................... 57
SECTION 9.06 Reference in Securities to Supplemental Indentures........ 57
ARTICLE X.
COVENANTS.............................................................. 58
SECTION 10.01 Payment of Principal, Premium and Interest............... 58
SECTION 10.02 Maintenance of Office or Agency.......................... 58
SECTION 10.03 Money for Security Payments to Be Held in Trust.......... 58
SECTION 10.04 Statement by Officers as to Default...................... 60
SECTION 10.05 Existence................................................ 60
SECTION 10.06 Waiver of Certain Covenants.............................. 60
ARTICLE XI.
REDEMPTION OF SECURITIES............................................... 60
SECTION 11.01 Right of Redemption...................................... 61
SECTION 11.02 Applicability of Article................................. 61
SECTION 11.03 Election to Redeem; Notice to Trustee.................... 61
SECTION 11.04 Selection by Trustee of Securities to be Redeemed........ 61
SECTION 11.05 Notice of Redemption..................................... 62
SECTION 11.06 Deposit of Redemption Price.............................. 62
SECTION 11.07 Securities Payable on Redemption Date.................... 63
SECTION 11.08 Securities Redeemed in Part.............................. 63
SECTION 11.09 Conversion Arrangements on Call for Redemption........... 64
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ARTICLE XII.
SUBORDINATION OF SECURITIES............................................ 64
SECTION 12.01 Securities Subordinated to Senior Indebtedness........... 64
SECTION 12.02 Payment Over of Proceeds Upon Dissolution, Etc........... 64
SECTION 12.03 Acceleration of Securities............................... 65
SECTION 12.04 No Payment When Senior Indebtedness in Default........... 66
SECTION 12.05 Subrogation to Rights of Holders of Senior Indebtedness.. 67
SECTION 12.06 Obligations of the Company Unconditional................. 68
SECTION 12.07 Trustee to Effectuate Subordination...................... 68
SECTION 12.08 No Waiver of Subordination Provisions.................... 68
SECTION 12.09 Notice to Trustee........................................ 69
SECTION 12.10 Reliance on Judicial Order or Certificate of Liquidating
Agent.................................................... 69
SECTION 12.11 Trustee Not Fiduciary for Holders of Senior Indebtedness. 70
SECTION 12.12 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights......................... 70
SECTION 12.13 Article Applicable to Paying Agents...................... 70
SECTION 12.14 Rights with Respect to Conversion and Certain Payments... 71
SECTION 12.15 Certain Conversions Deemed Payment....................... 71
ARTICLE XIII.
CONVERSION OF SECURITIES............................................... 72
SECTION 13.01 Conversion Privilege and Conversion Price................ 72
SECTION 13.02 Exercise of Conversion Privilege......................... 72
SECTION 13.03 Fractions of Shares...................................... 73
SECTION 13.04 Adjustment of Conversion Price........................... 74
SECTION 13.05 Notice of Adjustments of Conversion Price................ 78
SECTION 13.06 Notice of Certain Corporate Action....................... 79
SECTION 13.07 Company to Reserve Common Stock.......................... 80
SECTION 13.08 Taxes on Conversions..................................... 80
SECTION 13.09 Covenant as to Common Stock.............................. 80
SECTION 13.10 Cancellation of Converted Securities..................... 81
SECTION 13.11 Provisions of Consolidation, Merger or Sale of Assets.... 81
SECTION 13.12 Trustee's Disclaimer..................................... 81
ARTICLE XIV.
RIGHT TO REQUIRE REPURCHASE............................................ 82
SECTION 14.01 Right to Require Repurchase.............................. 82
SECTION 14.02 Notice; Method of Exercising Repurchase Right............ 82
SECTION 14.03 Withdrawal of Repurchase Notice.......................... 83
SECTION 14.04 Deposit of Repurchase Price.............................. 84
SECTION 14.05 Securities Not Repurchased on Repurchase Date............ 84
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SECTION 14.06 Securities Repurchased in Part........................... 84
SECTION 14.07 Certain Definitions...................................... 85
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Certain Sections of this Indenture relating to
Sections 310 through 318 of the Trust Indenture Act of 1939:
Section 310(a)(1) 6.09
(a)(2) 6.09
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) 6.09
(b) 6.08
Section 311(a) 6.13
(b) 6.13
Section 312(a) 7.01
7.02(a)
(b) 7.02(b)
(c) 7.02(c)
Section 313(a) 7.03(a)
(b) 7.03(a)
(c) 7.03(a)
(d) 7.03(b)
Section 314(a) 7.04
(a)(4) 10.04
(b) Not Applicable
(c)(1) 1.02
(c)(2) 1.02
(c)(3) Not Applicable
(d) Not Applicable
(e) 1.02
Section 315(a) 6.01
(b) 6.02
(c) 6.01
(d) 6.01
(e) 5.14
Section 316(a)(1)(A) 5.02
5.12
(a)(1)(B) 5.13
(a)(2) Not Applicable
(b) 5.08
(c) 1.04(c)
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Section 317(a)(1) 5.03
(a)(2) 5.04
(b) 10.03
Section 318(a) 1.07
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Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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INDENTURE, dated as of January__, 1998 between AVATAR HOLDINGS INC., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal executive offices at 000
Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000, and THE CHASE MANHATTAN BANK, a
New York banking corporation, as Indenture Trustee (herein called the
"Trustee").
Whereas, the Company has duly authorized the creation of an issue of its
__% Convertible Subordinated Notes due 2005 (herein called the "Securities") 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.
Whereas, all things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, 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 Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION a. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
i. the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
ii. 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;
iii. all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally
accepted accounting principles, and, except as otherwise
herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation
required and permitted hereunder shall mean United States
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accounting principles as are generally accepted at the date of
this Indenture; and
iv. the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
Certain terms used in Articles XII, XIII and XIV are defined in such
Articles.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling, 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.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Global Security to the extent applicable
to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities.
The terms "Beneficial Owner" and "beneficially owns" are determined in
accordance with Rule 13d-3, promulgated by the Commission under the Exchange
Act.
"Board of Directors" means either the board of directors of the Company or
any duly authorized 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.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated to close by law or executive order.
"Change in Control" has the meaning specified in Section 14.06.
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"Closing Date" means _____________, 1998.
"Commission" means the Securities and Exchange Commission as from time to
time constituted, created under the Exchange Act, or, if at 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 at such time.
"Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Section 13.11, shares issuable on conversion of Securities shall
include only shares of the class designated as Common Stock of the Company at
the date of this Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided, that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Chief Financial Officer, Controller, its Treasurer
or an Assistant Treasurer, or its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated Subsidiary" means a Subsidiary of the Company whose
financial statements are included in the most recent annual consolidated
financial statements of the Company and its Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall principally be administered,
which office at the date hereof is located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
"Credit Facility" means, in each case as amended, restated, modified,
renewed, increased, refunded, replaced or refinanced in whole or in part from
time to time, the Revolving Credit Agreement dated August 27, 1996 between the
Company and BHF Bank, Grand Cayman Branch, as Lender.
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"Current Market Price" has the meaning specified in Section 13.04.
"DTC" means The Depository Trust Company, a New York limited purpose trust
company.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depositary" means, with respect to any Global Securities, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as a Depositary for such Global Securities (or any successor
securities clearing agency so registered).
"Designated Senior Indebtedness" means Senior Indebtedness (a) under any
debt facility with banks or other lenders which provides for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables) or letters of credit to the Company or (b) the principal amount of
which is $25.0 million or more and that has been designated by the Company as
"Designated Senior Indebtedness."
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"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, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and to
govern this instrument and any such supplemental indenture, respectively.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity thereof or by declaration of
acceleration, redemption or otherwise.
"Obligations" in respect of Senior Indebtedness means any principal,
interest, premiums, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any such indebtedness.
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"Officers' Certificate" means a certificate, in form reasonably
satisfactory to the Trustee, signed by the Chairman of the Board, the Chief
Executive Officer, the President or a Vice President, and by the Chief Financial
Officer, Controller, the Treasurer or an Assistant Treasurer, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 10.04 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion, in form reasonably
satisfactory to the Trustee, of counsel, who may be counsel for or an employee
of the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(a) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment
or redemption of which moneys in the necessary
amount have been theretofore deposited with the
Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such
Securities; provided, that if such Securities, or
portions thereof, 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
(c) Securities which have been paid pursuant to
Section 3.06 or in exchange for or in lieu of
which other Securities have been authenticated and
delivered pursuant to this Indenture, other than
any such Securities in respect of which there
shall have been presented to the Trustee proof
satisfactory to it that such Securities are held
by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of 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, authorization, direction, notice,
consent or waiver,
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only Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of 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 Securities on behalf of the
Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or government or
any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Record Date" means either a Regular Record Date or a Special Record
Date, as applicable.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture on the
applicable Redemption Date.
"Regular Record Date", for the interest payable on any Interest Payment
Date means March 15 or September 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Indebtedness.
"Repurchase Date" has the meaning specified in Section 14.01.
"Repurchase Notice" has the meaning specified in Section 14.02.
"Repurchase Price" has the meaning specified in Section 14.01.
"Responsible Officer" means, when used with respect to the Trustee, the
chairman of the Board of Directors, any vice chairman of the Board of Directors,
the chairman of the trust
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committee, the chairman of the executive committee, any vice chairman of the
executive committee, the president, any vice president (whether or not
designated by numbers or words added before or after the title "vice
president"), the cashier, the secretary, the treasurer, any senior trust
officer, any trust officer, any assistant trust officer, any assistant cashier,
any assistant secretary, any assistant treasurer, or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.05.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on (a) all indebtedness of the Company for money borrowed, whether
outstanding on the date of execution of this Indenture or hereafter created,
incurred or assumed, except any such other indebtedness that by the terms of the
instrument or instruments by which such indebtedness was created or incurred
expressly provides that it (i) is junior in right of payment to the Securities
or (ii) ranks pari passu in right of payment with the Securities, and (b) any
amendments, renewals, extensions, modifications, refinancings and refundings of
the foregoing. For the purposes of this definition, "indebtedness for money
borrowed" when used with respect to the Company means (i) any obligation of, or
any obligation guaranteed by, the Company for the repayment of borrowed money
(including without limitation fees, penalties or other obligations in respect
thereof), whether or not evidenced by bonds, debentures, notes or other written
instruments, (ii) any deferred payment obligation of, or any such obligation
guaranteed by, the Company for the payment of the purchase price of property or
assets evidenced by a note or similar instrument, and (iii) any obligation of,
or any such obligation guaranteed by, the Company for the payment of rent or
other amounts under a lease of property or assets which obligation is required
to be classified and accounted for as a capitalized lease on the balance sheet
of the Company under generally accepted accounting principles.
"Significant Subsidiary" means at any time a Subsidiary that is at that
time a "significant subsidiary" of the Company within the meaning of Rule
1.02(w) of Regulation S-X under the Securities Act as in effect on the date of
this Indenture.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries or
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by the Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"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 provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
SECTION b. 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 such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
i. a statement that each individual or firm signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
ii. 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;
iii. a statement that, in the opinion of each such individual or
such firm, he has or they have made such examination or
investigation as is necessary to enable him or them to express
an informed opinion as to whether or not such covenant or
condition has been complied with; and
iv. a statement as to whether, in the opinion of each such
individual or such firm, such condition or covenant has been
complied with.
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SECTION c. 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 Person may certify to
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 certification or Opinion of
Counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion 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 of public officials or 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, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations 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 d. Acts of Holders; Record Dates.
(1) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this
Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in
person or by agents 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 Holders 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.
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(2) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the
affidavit of a witness of such execution or by a
certificate of a 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 signer acting in a capacity
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.
(3) The Company may fix any day as the record date for the
purpose of determining the Holders entitled to give or
take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first
solicitation of a Holder made by any Person in respect
of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action
or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided
pursuant to Section 7.01) prior to such first
solicitation or vote, as the case may be. With regard to
any record date, only the Holders on such date (or their
duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action. Notwithstanding
the foregoing, the Company shall not set a record date
for, and the provisions of this paragraph shall not
apply with respect to, any Act by the Holders pursuant
to Section 5.01, 5.02 or 5.12.
(4) The ownership of Securities shall be proved by the
Security Register.
(5) Any Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer
therefor or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done
by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such
Security.
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(6) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with
regard to any particular Security may do so with regard
to all or any part of the principal amount of such
Security or by one or more duly appointed agents each of
which may do so pursuant to such appointment with regard
to all or any different part of such principal amount.
SECTION e. Notices, Etc., to Trustee and Company.
Any Act of Holders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
i. the Trustee by any Holder 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
Corporate Trust Office, Attention: Corporate Trustee
Administration, or at any other address previously furnished
in writing to the Holders and the Company by the Trustee; or
ii. the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company, addressed to it
at the address of its principal executive offices specified in
the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; three Business Days after
being deposited in the mail, first class, registered or certified with postage
prepaid, if mailed; when answered back if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by nationally recognized overnight air courier guaranteeing next day
delivery.
SECTION f. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing to each Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. All
such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered;
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three Business Days after being deposited in the mail, first class, registered
or certified with postage prepaid, if mailed; when answered back if telexed;
when receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by nationally recognized overnight air courier
guaranteeing next day delivery.
In the case of any notice this Indenture provides shall be given by mail,
if, by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION g. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture if this Indenture were subject thereto, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified
or to be excluded, as the case may be.
SECTION h. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION i. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the
Trustee shall bind each of their respective successors and assigns, whether so
expressed or not.
SECTION j. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION k. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Holders of Securities and, with respect to Article XII, the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION l. GOVERNING LAW.
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THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION m. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repurchase
Date or Stated Maturity of any Security or the last date on which a Holder has
the right to convert his Securities shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal and premium if any, or conversion of the
Securities need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest Payment
Date or Redemption Date, Repurchase Date or at the Stated Maturity, or on such
last day for conversion; provided, that no interest shall accrue for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date or
Stated Maturity, as the case may be, to the next succeeding Business Day.
SECTION n. No Security Interest Created.
Nothing in this Indenture or in the Securities, express or implied, shall
be construed to constitute a security interest under the Uniform Commercial Code
or similar legislation, as now or hereafter enacted and in effect in any
jurisdiction where property of the Company or its Subsidiaries is or may be
located.
SECTION o. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture or in any Security, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or any successor Person, 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,
directors or employees, as such, of the Company or any successor Person, 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 Security or implied therefrom; and that any and all such
personal liability of every name and nature, 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, director or employee, 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 Security or implied therefrom, are
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hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issuance of such Security. Each and
every Holder of the Securities, by receiving and holding the same, agrees to the
provisions of this Section and waives and releases any and all such recourse,
claim and liability.
ARTICLE 2.
SECURITY FORMS
SECTION a. Forms Generally.
The Securities (including the Conversion Notice and the Option of Holder
to Elect Purchase upon a Change of Control) and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article,
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 any organizational document, any
applicable law or with the rules of any securities exchange on which the
Securities are listed or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
The definitive Securities (other than a Global Security) may be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing the Securities, as evidenced by their
execution of such Securities.
SECTION b. Form of Face of Security.
A legend in substantially the following form shall appear on the face of
each Global Security:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
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INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
AVATAR HOLDINGS INC.
__% Convertible Subordinated Note due 2005
Cusip No.
No. ________ $___________
Avatar Holdings Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to __________________________, or registered
assigns, the principal sum of ________________ Dollars on [___________], 2005,
and to pay interest thereon from and including the date of original issuance of
Securities pursuant to the Indenture or from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on April 1 and October 1 in each year, commencing April 1, 1998 at
the rate of __% per annum, until the principal hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be March 15 or September 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture. Notice
of a Special Record Date shall be given to Holders of Securities not less than
10 days prior to such Special Record Date. Payment of the principal of and
premium, if any, and interest on this Security will be made (i) in respect of
Securities held of record by the Depositary or its nominee in same day funds on
or prior to the respective payment dates and (ii) in respect of Securities held
of record by Holders other than the Depositary or its nominee at the offices of
the Trustee in New York, New York (or such other office maintained for that
purpose pursuant to Section 10.02 of the Indenture), in each case in such coin
or currency of the Xxxxxx
00
00
Xxxxxx xx Xxxxxxx as of the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest in respect of Securities held of record by Holders other
than the Depositary or its nominee may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _________________ AVATAR HOLDINGS INC.
By _________________________
Name
Title
Attest:
________________________
Name
Title
SECTION c. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company designated as its [___]% Convertible Subordinated Notes due 2005 (herein
called the "Securities"), limited in aggregate principal amount to $115,000,000
(including $15,000,000 principal amount of the Securities issuable upon exercise
of an underwriters' over-allotment option), issued and to be issued under an
Indenture, dated as of January __, 1998 (herein called the "Indenture"), between
the Company and The Chase Manhattan Bank, as Indenture Trustee (herein 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, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior
Indebtedness and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
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Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time after 60 days
following the date of original issuance of Securities pursuant to the Indenture
and on or before the close of business on [____________], 2005 or in case this
Security or a portion hereof is called for redemption, then in respect of this
Security or such portion hereof until and including, but (unless the Company
defaults in making the payment due upon redemption) not after, the close of
business on the second Business Day immediately preceding the Redemption Date,
to convert this Security (or any portion of the principal amount hereof which is
$1,000 or an integral multiple thereof), at the principal amount hereof, or of
such portion, into fully paid and non-assessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock at a conversion
price equal to $[_______] principal amount for each share of Common Stock (or at
the current adjusted conversion price if an adjustment has been made as provided
in Article XIII of the Indenture) by surrender of this Security, duly endorsed
or assigned to the Company or in blank, to the Company at its office or agency
maintained for that purpose pursuant to Section 10.02 of the Indenture,
accompanied by written notice to the Company in the form provided in this
Security (or such other notice as is acceptable to the Company) that the Holder
hereof elects to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
case such surrender shall be made during the period from the close of business
on any Regular Record Date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date (unless this Security or
portion thereof being converted has been called for redemption on a Redemption
Date occurring within such period), also accompanied by payment in New York
Clearing House funds, or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted. Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made upon conversion on account of any interest
accrued hereon or on account of any dividends on the Common Stock issued upon
conversion. No fractional shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional share the Company shall
pay a cash adjustment as provided in the Indenture. The conversion price is
subject to adjustment as provided in Article XIII of the Indenture. In addition,
the Indenture provides that in case of certain consolidations or mergers to
which the Company is a party or the sale or transfer of the properties and
assets substantially as an entirety of the Company in one transaction or a
series of related transactions, the Indenture shall be amended, without the
consent of any Holders of Securities, so that this Security, if then
outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger,
sale or transfer by a holder of the number of shares of Common Stock into which
this Security might have been converted immediately prior to such consolidation,
merger, sale or transfer (assuming such holder of Common Stock failed to
exercise any rights of election
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and received per share the kind and amount received per share by a plurality of
non-electing shares).
The Securities are subject to redemption upon not less than 30 and not
more than 60 days' notice by mail, at any time on or after April 1, 2001, as a
whole or in part, at the election of the Company, at the Redemption Prices set
forth below (expressed as percentages of the principal amount), plus accrued and
unpaid interest to the Redemption Date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on an
Interest Payment Date that is on or prior to the Redemption Date).
If redeemed during the 12-month period beginning October 1, in the year
indicated, the redemption price shall be:
Redemption
Year Price
---- -----------
2001 ................... %
2002 ................... %
2003 ................... %
2004 ................... %
2005 ................... %
If all accrued interest on the Securities has not been paid, the
Securities may not be redeemed in part and the Company may not purchase or
acquire any Security otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Securities.
In certain circumstances involving the occurrence of a Change in Control
(as defined in the Indenture), the Holder hereof shall have the right to require
the Company to repurchase this Security at 100% of the principal amount hereof,
together with accrued and unpaid interest to the Repurchase Date, but interest
installments whose Stated Maturity is on or prior to such Repurchase Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture. The Holder
shall have the right to withdraw its election to exercise the repurchase right
by delivering a written notice of withdrawal in accordance with the terms of the
Indenture.
In the event of redemption, conversion or repurchase of this Security in
part only, a new Security or Securities for the unredeemed, unconverted or
unrepurchased portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
Any Securities called for redemption, unless surrendered for conversion by
the close of business on the second Business Day immediately preceding the date
fixed for redemption, are subject to being purchased from the Holder of such
Securities at the redemption price by one or
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more investment banking firms or other purchasers who may agree with the Company
to purchase such Securities and convert them into Common Stock.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared due and payable in the manner and with the effect
provided in Article V of the Indenture.
The Indenture provides that no Holder of any Securities may enforce any
remedy under the Indenture except in the case of failure of the Trustee to act
after notice of default and after request of the Holders of 25% in principal
amount of Outstanding Securities and the offer to the Trustee of indemnity
satisfactory to it; provided, however, that such provision shall not prevent the
Holder hereof from enforcing payment of the principal of and premium, if any,
and interest on this Security after the same shall have become due.
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 Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding, and, under certain limited circumstances, by the Company and the
Trustee without the consent of the Holders. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security 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 Security at the times, place and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in Article
XIII of the Indenture.
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As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in fully registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange except as provided in the Indenture, and the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, except as provided in this Security, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on this Security shall be computed on the basis of a 360-day year
of twelve 30- day months.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Indenture and this
Security shall be governed by and construed in accordance with the laws of the
State of New York without regard to the conflicts of laws principles thereof. To
the extent this Security conflicts with a provision of the Indenture, the
Indenture governs.
FORM OF CONVERSION NOTICE
TO: AVATAR HOLDINGS INC.
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof
(which is $1,000 principal amount or an integral multiple thereof)
designated below, into shares of Common Stock of Avatar Holdings Inc. in
accordance with the terms of the Indenture referred to in this Security,
and directs that the shares issuable and
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deliverable upon the conversion, together with any check in payment for a
fractional share and any Security representing any unconverted principal
amount hereof, be issued and delivered to the registered owner hereof
unless a different name has been indicated below. If this Notice is being
delivered on a date after the close of business on a Regular Record Date
and prior to the close of business on the related Interest Payment Date,
this Notice is accompanied by payment in New York Clearing House funds, or
other funds acceptable to the Company, of an amount equal to the interest
payable on such Interest Payment Date on the principal of this Security to
be converted (unless this Security has been called for redemption within
such period). If shares or any portion of this Security not converted are
to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Any
amount required to be paid by the undersigned on account of interest
accompanies this Security.
Dated: _________________________
_________________________
Signature(s)
(Sign exactly as your name appears on the face of
this Security)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a national stock
exchange if shares of Common Stock
are to be delivered, or Securities to be
issued, other than to and in the name of
the registered owner.
_________________________________
Signature Guarantee
Fill in for registration of shares of
Common Stock if they are to be delivered,
or Securities if they are to be issued,
other than to and in the name of the
registered owner:
______________________________
(Name)
______________________________
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(Street Address)
______________________________
(City, State and zip code)
(Please print name and address)
Register: _____ Common Stock
_____ Securities
(Check appropriate line(s)).
Principal amount to be converted (if less than all):
$__________,000
_________________________________
Social Security or other Taxpayer
Identification Number of owner
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FORM OF OPTION OF HOLDER TO ELECT PURCHASE
UPON A CHANGE IN CONTROL
TO: AVATAR HOLDINGS INC.
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Avatar Holdings Inc. (the "Company") as to
the occurrence of a Change in Control with respect to the Company and requests
and instructs the Company to repay the entire principal amount of this Security,
or the portion thereof designated below (which is $1,000 principal amount or an
integral multiple thereof), in accordance with the terms of the Indenture
referred to in this Security at the Repurchase Price.
Principal amount to be repurchased
(if less than all):
$_______________________________
Signature(s): ___________________________
Date: ___________________ ___________________________
(Sign exactly as your name
appears on the face of this
Security)
Tax Identification No.: ___________________________
Signature Guarantee: ____________________________________
(commercial bank, trust company or
member firm of a national securities
exchange)
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SECTION d. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By ____________________________
Authorized Officer
ARTICLE 3.
THE SECURITIES
SECTION a. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $115,000,000 (including
$15,000,000 aggregate principal amount of Securities that may be sold by the
Company pursuant to the over-allotment option granted pursuant to the
Underwriting Agreement, dated January __, 1998, among the Company, CIBC
Xxxxxxxxxxx Corp. and SBC Warburg Dillon Read Inc.), except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Section 3.04, 3.05, 3.06, 9.06,
11.08, 13.02 or 14.05.
The Securities shall be known and designated as the "[___]% Convertible
Subordinated Notes due 2005" of the Company. Their Stated Maturity shall be
[_________], 2005 and they shall bear interest at the rate of [___]% per annum,
from the date of original issuance of Securities pursuant to this Indenture or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, as the case may be, payable semi-annually on April 1 and
October 1 commencing April 1, 1998, until the principal thereof is paid or made
available for payment.
The principal of and premium, if any, and interest on the Securities shall
be payable (i) in respect of Securities held of record by the Depositary or its
nominee in same day funds on or prior to the respective payment dates and (ii)
in respect of Securities held of record by Holders other than the Depositary or
its nominee at the offices of the Trustee in New York, New York (or at such
other office or agency of the Company maintained for such purpose pursuant to
Section 10.02); provided, however, that at the option of the Company payment of
interest to Holders of record other than the Depositary may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
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The Securities shall be redeemable as provided in Article XI.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article XII.
The Securities shall be convertible as provided in Article XIII.
The Securities shall be subject to repurchase at the option of the Holder
as provided in Article XIV.
SECTION b. Denominations.
The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION c. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, its President, its Chief Financial
Officer or one of its Vice Presidents, under its corporate seal or a facsimile
thereof reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities 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 Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall either at one time or from time to time pursuant to such
instructions as may be described therein authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is
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entitled to the benefits of the Indenture. The Trustee may appoint an
Authenticating Agent pursuant to the terms of Section 6.14.
SECTION d. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities. Every such temporary Security shall be executed by
the Company and shall be authenticated and delivered by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Security or Securities in lieu of which it is issued.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor one or more definitive Securities of a like
principal amount of authorized denominations. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
SECTION e. Registration, Registration of Transfer and Exchange.
(1) The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register
maintained in such office or in any other office or
agency designated pursuant to Section 10.02 being herein
sometimes referred to as the "Security Register") in
which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the
registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided. At all
reasonable times the Security Register shall be open for
inspection by the Company.
Upon surrender for registration of transfer of any Security at an office
or agency of the Company designated pursuant to Section 10.02 for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or
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transferees, one or more new Securities of any authorized denomination and of a
like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at the office or agency
maintained for that purpose. Whenever Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
(2) All Securities issued upon any registration of transfer
or exchange of Securities shall be the valid obligations
of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the
Securities surrendered upon such registration of
transfer or exchange. Every Security presented or
surrendered for registration of transfer or for 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 Company and the
Security Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing, and, in the
case of a transfer, with an appropriate guarantee of
signature.
No service charge shall be made for any registration or transfer or
exchange of Securities except as provided in Section 3.06. 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 Securities, other than exchanges pursuant to Sections 3.04, 9.06,
11.08, 13.02 or 14.05 not involving any transfer.
The Company shall not be required to (i) issue, register the transfer of
or exchange any Security during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.04 and ending at the close of business
on the day of such mailing, (ii) register the transfer of or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (iii) to register the
transfer or exchange of any Securities surrendered for conversion or repurchase
upon the occurrence of a Change in Control.
The provisions of clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security or
a nominee thereof and delivered
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to such Depositary or a nominee thereof or custodian therefor, and each such
Global Security shall constitute a single Security for all purposes of this
Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
has ceased to be a clearing agency registered under the Exchange Act at a time
when the Depositary is required to be so registered to act as depositary, in
each case unless the Company has approved a successor Depositary within 90 days,
(B) there shall have occurred and be continuing an Event of Default with respect
to such Global Security or (C) the Company in its sole discretion determines
that such Global Security will be so exchangeable or transferable.
(3) Subject to clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued in
exchange for a Global Security or any portion thereof shall be registered in
such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of , or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security,
unless such Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
(5) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders thereof. Neither the Company nor the Trustee will have any
responsibility or obligation to the Depositary or any of its Agent Members with
respect to (i) the accuracy of any records maintained by the Depositary, (ii)
the payment by the Depositary or any Agent Members of any amount due to any
owner of beneficial interests in a Global Security in respect of any Securities,
(iii) the delivery of any notice by the Depositary or any Agent Member, or (iv)
any other action taken by the Depositary or any Agent Members.
SECTION f. Mutilated, Destroyed, Lost and Stolen Securities.
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If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
replacement Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a replacement
Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Security under this Section, 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 replacement Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION g. Payment of Interest; Interest Rights Preserved.
Interest on any Security 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 Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest. Payment of
interest will be made (i) in respect of Securities held by the Depositary or its
nominee, in same day funds on or prior to the respective Interest Payment Dates
and (ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee, at the office of the Trustee in New York, New York or
at such other office or agency of the Company as it shall maintain for that
purpose pursuant to Section 10.02, provided, however, that, at the option of the
Company, interest on any Security held of record by Holders other than the
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Depositary or its nominee may be paid by mailing checks to the addresses of the
Holders thereof as such addresses appear in the Securities Register.
If the Company shall be required by law to deduct any taxes from any sum
of interest payable hereunder to a Holder, (i) the Company shall make such
deductions and shall pay the full amount deducted to the relevant taxing
authority in accordance with applicable law and (ii) the amount of such
deduction shall be treated for purposes hereof as a payment of interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the 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 Clause (1) or (2) below:
i. The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or
their respective Predecessor Securities) 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
Security 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 in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
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ii. 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 Securities may be listed,
and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued,
and to accrue, which were carried by such other Security.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date, provided,
however, that Securities so surrendered for conversion (except in the case of
Securities or portions thereof called for redemption on a Redemption Date
occurring within such period) shall be accompanied by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount
being surrendered for conversion. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable.
SECTION h. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and premium, if any, and
(subject to Section 3.07) interest on such Security and for all other purposes
whatsoever, whether or not such Security 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 i. Cancellation.
All Securities surrendered for payment, redemption, repurchase,
registration of transfer, exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall
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be promptly canceled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be disposed of as directed by a Company Order.
SECTION j. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
ARTICLE 4.
SATISFACTION AND DISCHARGE
SECTION a. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as expressly provided for in this Article IV), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
i. either
1) all Securities theretofore
authenticated and delivered (other
than (i) Securities which have been
destroyed, lost or stolen and which
have been replaced or paid as provided
in Section 3.06 and (ii) Securities
for whose payment money has
theretofore been deposited in trust or
segregated and held in trust by the
Company 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
2) all such Securities not theretofore
delivered to the Trustee for
cancellation
(a) have become due and payable, or
(b) will become due and payable at their Stated
Maturity within one year, or
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(c) 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,
or
(d) are delivered to the Trustee for conversion in
accordance with Article XIII,
and the Company, in the case of (B)(i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount in cash sufficient (without consideration of any
investment of such cash) to pay and discharge the entire indebtedness on such
Securities 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 Securities which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be; provided that the Trustee is irrevocably
instructed to apply such amount to said payments with respect to the Securities;
ii. the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
iii. 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.
Notwithstanding the satisfaction and discharge of this Indenture, the
following rights or obligations under the Securities and this Indenture shall
survive until otherwise terminated or discharged hereunder: (a) Article XIII,
Article XIV and the Company's obligations under Sections 3.04, 3.05, 3.06, 10.02
and 10.03, in each case with respect to any Securities described in subclause
(B) of Clause (1) of this Section, (b) this Article IV, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, including the
obligations of the Company to the Trustee under Section 6.07, and the
obligations of the Company to any Authenticating Agent under Section 6.14 and
(d) if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the rights of Holders of any Securities
described in subclause (B) of Clause (1) of this Section to receive, solely from
the trust fund described in such subclause (B), payments in respect of the
principal of, and premium (if any) and interest on, such Securities when such
payment are due.
SECTION b. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, 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 Securities and this
Indenture, to the payment, either directly or through any
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Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
premium, if any, and interest for whose payment such money has been deposited
with the Trustee. All moneys deposited with the Trustee pursuant to Section 4.01
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
SECTION c. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article IV by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article IV until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust with respect to the Securities;
provided, however, that if the Company makes any payment of principal of or any
premium or interest on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of the
Securities to receive such payment from the money so held in trust.
ARTICLE 5.
REMEDIES
SECTION a. 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
occasioned by the provisions of Article XII or 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);
i. default in the payment of the principal of or premium, if any,
on any Security at its Maturity, whether or not such payment
is prohibited by the provisions of Article XII; or
ii. default in the payment of any interest upon any Security when
it becomes due and payable, whether or not such payment is
prohibited by the provisions of Article XII, and continuance
of such default for a period of 30 days; or
iii. failure to provide timely notice of a Change in Control as
required in accordance with the provisions of Article XIV; or
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iv. default in the payment of the Repurchase Price in respect of
any Security on the Repurchase Date therefor in accordance
with the provisions of Article XIV, whether or not such
payment is prohibited by the provisions of Article XII; or
v. default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with),
and continuance of such default or breach for a period of 30
days after there has been given, by registered or certified
mail, 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 Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
vi. default under one or more bonds, notes, debentures or other
evidences of indebtedness for money borrowed by the Company or
any Consolidated Subsidiary or under one or more mortgages,
indentures or instruments under which there may be issued or
by which there may be secured or evidenced any indebtedness
for money borrowed by the Company or any Consolidated
Subsidiary, whether such indebtedness now exists or shall
hereafter be created, which default individually or in the
aggregate shall constitute a failure to pay the principal of
indebtedness in excess of $10 million when due and payable
after the expiration of any applicable grace period with
respect thereto or shall have resulted in indebtedness in
excess of $10 million becoming or being declared due and
payable prior to the date on which it would otherwise have
become due and payable, without such indebtedness having been
discharged, or such acceleration having been rescinded or
annulled, within a period of 30 days after there shall have
been given, by registered or certified mail, 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 Outstanding
Securities a written notice specifying such default and
requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default"
hereunder; or
vii. a final judgment or final judgments for the payment of money
against the Company or any Consolidated Subsidiary the entry
by a court or courts of competent jurisdiction of which remain
undischarged for a period (during which execution shall not be
effectively stayed, the posting of any required bond not being
deemed an execution for purposes hereof)
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of 30 days, provided that the aggregate amount of all such
judgments exceeds $10 million (net of amounts to which the
Company or such Subsidiary is entitled pursuant to insurance
policies which can reasonably be expected to be paid in the
ordinary course); or
viii. the filing or commencement of an involuntary case or other
proceeding against the Company or any Significant Subsidiary
of the Company seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or thereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial
part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period
of 90 days; or an order for relief shall be entered against
the Company or any Significant Subsidiary of the Company under
the federal bankruptcy laws as now or hereafter in effect; or
ix. the filing or commencement by the Company or any Significant
Subsidiary of the Company of a voluntary case or other
proceeding seeking liquidation, reorganization or other
similar relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect, or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or the Company or any
Significant Subsidiary of the Company shall consent to any
such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for
the benefit of creditors.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 5.01, a record date shall automatically and without any other action by
any Person be set for the purpose of determining the Holders of Outstanding
Securities entitled to join in such Notice of Default, which record date shall
be the close of business on the day the Trustee receives such Notice of Default.
The Holders of Outstanding Securities on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
Notice of Default, whether or not such holders remain Holders after such record
date; provided that unless such Notice of Default shall have become effective by
virtue of the Holders of the requisite principal amount of Outstanding
Securities on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such Notice of
Default shall automatically and without any action by any Person be canceled and
of no further force or effect.
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SECTION b. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than as specified in subparagraph (8) or (9)
of Section 5.01) 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
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal plus
any interest accrued on the Securities to the date of declaration shall become
immediately due and payable. If an Event of Default specified in subparagraph
(8) or (9) of Section 5.01 occurs and is continuing, then the principal of,
premium, if any, and accrued and unpaid interest, if any, on all of the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder of
Securities.
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 provided, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
i. the Company has paid or deposited with the Trustee a sum
sufficient to pay
1) all overdue interest on all
Securities,
2) the principal of and premium, if any,
on any Securities which have become
due otherwise than by such declaration
of acceleration and interest thereon
at the rate borne by the Securities,
3) to the extent that payment of such
interest is lawful, interest upon
overdue interest at the rate borne by
the Securities, and
4) all sums paid or advanced by the
Trustee and each predecessor Trustee,
their respective agents and counsel
hereunder and the reasonable
compensation, expenses, disbursements
and advances of the Trustee and each
predecessor Trustee, their respective
agents and counsel;
and
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ii. all Events of Default, other than the nonpayment of the
principal of, premium, if any, and interest on the Securities
that has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section
5.13.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Trustee of any declaration of acceleration, or any
rescission and annulment of any such declaration, pursuant to this Section 5.02,
a record date shall automatically and without any other action by any Person be
set for the purpose of determining the Holders of Outstanding Securities
entitled to join in such declaration or rescission and annulment, as the case
may be, which record date shall be the close of business on the day the Trustee
receives such declaration, or rescission and annulment, as the case may be. The
Holders of Outstanding Securities on such record date (or their duly appointed
agents), and only such persons, shall be entitled to join in such declaration,
or rescission and annulment, as the case may be, whether or not such Holders
remain Holders after such record date; provided that unless such declaration, or
rescission and annulment, as the case may be, shall have become effective by
virtue of Holders of the requisite principal amount of Outstanding Securities on
such record date (or their duly appointed agents) having joined therein on or
prior to the 90th day after such record date, such declaration, or rescission
and annulment, as the case may be, shall automatically and without any action by
any Person be canceled and of no further force or effect.
SECTION c. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
i. default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default
continues for a period of 30 days, or
ii. default is made in the payment of the principal of or premium,
if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and premium, if any, and on any overdue interest, at the rate
borne by the Securities, 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 Trustee and
each predecessor Trustee, their respective agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 6.07.
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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 unpaid and may
prosecute any such proceeding to judgment or final decree, and may enforce the
same against the Company (or any other obligor upon the Securities) 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 Securities),
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
Holders 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 d. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have the claims of the Holders and the Trustee allowed in any such proceeding.
In particular, the Trustee shall be authorized to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it and each predecessor Trustee
for the reasonable compensation, expenses, disbursements and advances of the
Trustee and each predecessor Trustee and their respective agents and counsel,
and any other amounts due the Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the Creditors'
Committee.
SECTION e. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities 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
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and advances of the Trustee and each predecessor Trustee and their respective
agents and counsel, be for the ratable benefit of the Holders of the Securities
in respect of which such judgment has been recovered.
SECTION f. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article 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 Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To payment of all amounts due the Trustee under Section 6.07;
SECOND: Subject to Article XII, to the payment of the amounts then
due and unpaid for principal of and premium, if any, and interest on the
Securities in respect of which or for the 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 Securities for principal
and premium, if any, and interest, respectively; and
THIRD: The balance, if any, to the Company or any other Person or
Persons determined to be entitled thereto.
SECTION g. Limitation on Suits.
No Holder of any Security 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
i. such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
ii. the Holders of not less than 25% in principal amount of the
Outstanding Securities 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;
iii. such Holder or Holders have offered to the Trustee reasonable
indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request;
iv. the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any
such proceeding; and
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v. 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
Securities;
it being understood and intended that no one or more Holders 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,
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.
SECTION h. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any
Security 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 Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date or, in the case
of a repurchase pursuant to Article XIV, on the Repurchase Date) and to convert
such Security in accordance with Article XIII and to institute suit for the
enforcement of any such payment and right to convert, and such rights shall not
be impaired without the consent of such Holder.
SECTION i. Restoration of Rights and Remedies.
If the Trustee or any Holder 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 Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION j. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in Section 3.06, 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 shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION x. Xxxxx or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security 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 Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION l. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities 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
i. such direction shall not be in conflict with any rule of law
or with this Indenture; and
ii. the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
iii. subject to the provisions of Section 6.01, the Trustee shall
have the right to decline to follow any such direction if the
Trustee in good faith shall determine that the action so
directed would involve the Trustee in personal liability or
would be unduly prejudicial to Holders not joining in such
direction.
Upon receipt by the Trustee of any direction, a record date shall
automatically and without any other action by any Person be set for the purpose
of determining the Holders of Outstanding Securities entitled to join in such
direction, which record date shall be the close of business on the day the
Trustee receives such direction. The Holders of Outstanding Securities on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such direction, whether or not such holders remain Holders
after such record date; provided that unless such direction shall have become
effective by virtue of the Holders of the requisite principal amount of
Outstanding Securities on such record date (or their duly appointed agents)
having joined therein on or prior to the 90th day after such record date, such
direction shall automatically and without any action by any Person be canceled
and of no further force or effect.
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SECTION m. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
i. in the payment of the principal of or premium, if any, or
interest on any Security (including, without limitation,
pursuant to any optional redemption or repurchase obligation
hereunder); or
ii. 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 Security 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 thereon.
SECTION n. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided, that this Section
shall not be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company, in any suit
instituted by the Trustee, a suit by a Holder pursuant to Section 5.08, or a
suit by a Holder or Holders of more than 10% in the principal amount of the
Outstanding Securities.
ARTICLE 6.
THE TRUSTEE
SECTION a. 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 covenants or obligations shall be read into this Indenture
against the Trustee; and
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(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 person would exercise or use under the circumstances in the conduct of
his or her 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 willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
(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;
(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 of a majority in principal amount of
the Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Indenture; and
(4) no provision 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 it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it against such risk or liability
is not reasonably assured to it.
(d) 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 this Section.
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SECTION b. Notice of Defaults.
If a default or Event or Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder a notice of the
default or Event of Default within 60 days after it occurs; provided, however,
that, except in the case of a default in payment of principal of, premium, if
any, or interest on any Securities, the Trustee may withhold notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of Securities. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default.
SECTION c. Certain Rights of Trustee.
Subject to the provisions of Section 6.01:
(1) 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, note, other
evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) 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;
(3) 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;
(4) 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;
(5) 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
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direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity satisfactory to
it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request
or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness 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;
(7) 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
(8) the Trustee shall not be deemed to have knowledge or
notice of any default or Event of Default hereunder
unless a Responsible Officer of the Trustee assigned to
and working in its Corporate Trustee Administration
Department shall have actual knowledge thereof or the
Trustee shall have received written notice thereof in
accordance with Section 1.05 from the Company, any
Holder, any holder of Senior Indebtedness or any
Representative.
SECTION d. Not Responsible for Recitals or Issuance of Securities.
The statements and recitals contained herein and in the Securities and in
any other document in connection with the sale of the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee and any Authenticating Agent assume no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee and any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION e. May Hold Securities.
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The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION f. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder need not
be segregated from other funds except to the extent required by law. The Trustee
or any Paying Agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION g. Compensation and Reimbursement.
The Company agrees:
i. to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder
(including its services as Security Registrar or Paying Agent,
if so appointed by the Company) as may be mutually agreed upon
in writing by the Company and the Trustee (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
ii. except as otherwise expressly provided herein, to reimburse
the Trustee and each predecessor Trustee promptly upon its
request for all reasonable expenses, disbursements and
advances incurred or made by or on behalf of it in connection
with the performance of its duties under any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel and all
other persons not regularly in its employ and its duties as
Security Registrar or Paying Agent, if so appointed by the
Company) except to the extent any such expense, disbursement
or advance may be attributable to its negligence or bad faith;
and
iii. to indemnify the Trustee and each predecessor Trustee (each,
an "indemnitee") 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 Indenture or the trusts
hereunder and its duties hereunder (including its services as
Security Registrar or Paying Agent, if so appointed by the
Company). The Trustee shall notify the Company promptly of any
claim asserted against it
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for which it may seek indemnity. The Company need not pay for
any settlement made without its written consent.
As security for the performance of the obligations of the Company under
this Section 6.07, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities, and the
Securities are hereby subordinated to such prior lien. The obligations of the
Company under this Section to compensate and indemnify the Trustee and any
predecessor Trustee and to pay or reimburse the Trustee and any predecessor
Trustee for expenses, disbursements and advances, and any other amounts due the
Trustee or any predecessor Trustee under Section 6.07, shall constitute an
additional obligation hereunder and shall survive the satisfaction and discharge
of this Indenture.
SECTION h. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION i. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that (i) is eligible pursuant to the Trust Indenture Act to act as such and (ii)
has (or, in the case of a corporation included in a bank holding company system,
whose related bank holding company has) a combined capital and surplus of at
least $50,000,000. If such Person publishes reports of conditions at least
annually, pursuant to law or to the requirements of a Federal or state
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person 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, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION j. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this
Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with
the applicable requirements of Section 6.11.
(2) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of
acceptance by a successor Trustee required by Section
6.11 shall not have been
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delivered to the resigning 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.
(3) The Trustee may be removed at any time by an Act of the
Holders of a majority in principal amount of the
Outstanding Securities delivered to the Trustee and to
the Company.
(4) If at any time:
i. the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for the last six
months, or
ii. 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 Holder, or
iii. 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 Holder who has been a bona fide
Holder of a Security 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.
(5) 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
and such successor Trustee shall comply with the
requirements of Section 6.11. 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 Securities delivered
to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the
applicable requirements of Section 6.11 become the
successor Trustee and supersede the successor Trustee
appointed by the Company. If no
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successor Trustee shall have been so appointed by the
Company or the Holders and accepted appointment in the
manner required by Section 6.11, any Holder who has been
a bona fide Holder of a Security 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.
(6) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a
successor Trustee to all Holders in the manner provided
in Section 1.06. Each notice shall include the name of
the successor Trustee and the address of its Corporate
Trust Office.
SECTION k. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee 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 shall, 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.
SECTION l. Merger, Conversion, Consolidation or Succession to
Business.
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 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,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities 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 Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
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SECTION m. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION n. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents acceptable to
and at the expense of the Company which shall be authorized to act on behalf of
the Trustee to authenticate Securities issued upon exchange, registration of
transfer, partial conversion or partial redemption or pursuant to Section 3.06,
and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a Person organized and doing business under
the laws of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party,
or any Person succeeding to the corporate agency or corporate trust business of
an Authenticating Agent, shall continue to be an Authenticating Agent, provided
such Person shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be
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acceptable to the Company and shall mail notice of such appointment by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment under this Section shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible to act as such under the provisions of
this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including, among other duties, the duties to authenticate
Securities when presented to it in connection with exchanges, registrations of
transfer or redemptions or conversions thereof or pursuant to Section 3.06; it
will keep and maintain, and furnish to the Trustee from time to time as
requested by the Trustee, appropriate records of all transactions carried out by
it as Authenticating Agent and will furnish the Trustee such other information
and reports as the Trustee may reasonably require; and it will notify the
Trustee promptly if it shall cease to be eligible to act as Authenticating Agent
in accordance with the provisions of this Section. Any Authenticating Agent by
the acceptance of its appointment shall be deemed to have agreed with the
Trustee to indemnify the Trustee against any loss, liability or expense incurred
by the Trustee and to defend any claim asserted against the Trustee by reason of
any acts or failures to act of such Authenticating Agent, but such
Authenticating Agent shall have no liability for any action taken by it in
accordance with the specific written direction of the Trustee.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
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This is one of the Securities referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
As Trustee
By:_________________________
As Authenticating Agent
By:_________________________
Authorized Officer
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ARTICLE 7.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION a. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee:
(1) 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
Holders as of such Regular Record Date, and
(2) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company
of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time
such list is furnished.
Notwithstanding the foregoing, so long as the Trustee is the Security Registrar,
no such list shall be required to be furnished.
SECTION b. Preservation of Information; Communication to Holders.
(1) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of
Holders contained in the most recent list furnished to
the Trustee as provided in Section 7.01 and the names
and addresses of Holders received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy
any list furnished to it as provided in Section 7.01
upon receipt of a new list so furnished.
(2) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or
under the Securities, and the corresponding rights and
duties of the Trustee, shall be as provided by the Trust
Indenture Act.
(3) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any agent of
either of them shall be held accountable by reason of
any disclosure of information as to names and addresses
of Holders made pursuant to the Trust Indenture Act or
otherwise in accordance with this Indenture.
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SECTION c. Reports by Trustee.
(1) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided
pursuant thereto.
Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than 60 days following May 15
in each calendar year, commencing in 1998 and shall be dated as of such May 15.
(2) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with
each stock exchange upon which the Securities are
listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are
listed on any stock exchange.
SECTION d. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE 8.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION a. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person in one transaction or a series of related transactions, and the
Company shall not permit any Person to consolidate with or merge into the
Company, unless:
i. in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person in one
transaction or a series of related transactions, the Person
formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company
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substantially as an entirety shall be a corporation,
partnership, limited liability company or trust, shall be
organized and validly existing under the laws of the United
States of America, any State thereof 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 Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be
performed or observed and shall have provided for conversion
rights in accordance with Section 13.11 to the extent
applicable;
ii. 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 occurred
and be continuing;
iii. such consolidation, merger, conveyance, transfer or lease does
not adversely affect the validity or enforceability of the
Securities; and
iv. the Company or the successor Person has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction
have been complied with.
SECTION b. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in one
transaction or a series of related transactions in accordance with Section 8.01,
the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a transfer by
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE 9.
SUPPLEMENTAL INDENTURES
SECTION a. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, 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:
i. to cause this Indenture to be qualified under the Trust
Indenture Act; or
ii. to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
iii. to add to the covenants of the Company for the benefit of the
Holders or an additional Event of Default, or to surrender any
right or power conferred herein or in the Securities upon the
Company; or
iv. to provide collateral for or guarantors of Securities; or
v. to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
vi. to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the
Securities; or
vii. to cure any ambiguity or omission, to correct or supplement
any provision herein or in the Securities which may be
defective or inconsistent with any other provision herein or
in the Securities, or to make any other provisions with
respect to matters or questions arising under this Indenture
which shall not be inconsistent with the provisions of this
Indenture; provided, that such action pursuant to this Clause
(7) shall not adversely affect the interests of the Holders in
any material respect and the Trustee may rely upon an Opinion
of Counsel to that effect.
SECTION b. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the
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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 under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected thereby,
i. change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or
any premium payable upon the redemption thereof, or change the
place of payment where, or the coin or currency in which, any
Security or any premium or interest thereon 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
adversely affect the right to convert any Security as provided
in Article XIII (except as permitted by Section 9.01(5) or to
require repurchase of Securities pursuant to the provisions of
Article XIV, or to modify, directly or indirectly, the
provisions of this Indenture with respect to the subordination
of the Securities, in a manner adverse to the Holders, or
ii. reduce the percentage in principal amount of the Outstanding
Securities, 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 certain defaults hereunder and
their consequences provided for in this Indenture, or
iii. modify any of the provisions of this Section 9.02, Section
5.13 or Section 10.06, 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 Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION c. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article 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 an Opinion of Counsel stating that the execution of
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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 adversely affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
SECTION d. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, 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 Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION e. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION f. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 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 Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and (at the specific direction of the Company) authenticated and
delivered by the Trustee in exchange for Outstanding Securities.
SECTION g. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 9.02, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental indenture
or, in lieu thereof, a copy of such supplemental indenture.
ARTICLE 10.
COVENANTS
SECTION a. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of and premium, if
any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
SECTION b. Maintenance of Office or Agency.
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The Company will maintain in New York, New York an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, where Securities may be surrendered
for exchange or conversion and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of any such office or agency. If at any time the Company shall fail to
maintain any such required 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 Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in New York, New York
for such purposes. The Company will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the location of any such
other office or agency.
SECTION c. Money for Security Payments to Be Held in 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 Securities, 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 action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on or
prior to 11:00 a.m. (New York City time) on each due date of the principal of
and premium, if any, or interest on any Securities, deposit with a Paying Agent
a sum in same day funds sufficient to pay the principal and any premium and
interest so becoming due, such sum to be held as provided by the Trust Indenture
Act, and (unless such Paying Agent is the Trustee) the Company will promptly
notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee or the
Company 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,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act and this Indenture applicable to it as a Paying Agent and hold all
sums held by it for the payment of principal of or any premium or interest on
the Securities 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; (ii) give the Trustee notice of any
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default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities; and (iii) at any time during the
continuance of any default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in
trust by such Paying Agent for payment in respect of the Securities, and account
for any funds disbursed.
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
money.
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 Security 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 Security 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 a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York, New York,
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 d. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
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SECTION e. Existence.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises and the existence, rights (charter
and statutory) and franchises of each Significant Subsidiary; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION f. Waiver of Certain Covenants.
Subject to Article VIII, the Company may omit in any particular instance
to comply with any covenant or condition set forth in Section 10.05, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities shall, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
ARTICLE 11.
REDEMPTION OF SECURITIES
SECTION a. Right of Redemption.
The Securities may be redeemed at the election of the Company, in whole or
from time to time in part, upon not less than 30 and not more than 60 days'
notice to each Holder by mail, at any time on or after April 1, 2001, at the
Redemption Prices specified in the form of Security hereinbefore set forth,
together with accrued and unpaid interest, to the Redemption Date; provided,
however, that if all accrued interest on the Securities has not been paid, (i)
the Securities may not be redeemed in part and (ii) the Company may not purchase
or acquire any Security other than pursuant to a purchase or exchange offer to
all holders of the Securities.
SECTION b. Applicability of Article.
Redemption of Securities at the election of the Company as permitted by
any provision of this Indenture shall be made in accordance with such provision
and this Article.
SECTION c. Election to Redeem; Notice to Trustee.
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The election of the Company to redeem any Securities pursuant to Section
11.01 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter period shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities to be redeemed. In
case of any redemption at the election of the Company of all the Securities, the
Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter period shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date.
SECTION d. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 65 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by lot or pro rata or by such other method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $1,000 or any integral multiple thereof) of the
principal amount of Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection. In any case
where more than one Security is registered in the same name, the Trustee in its
discretion may treat the aggregate principal amount so registered as if it were
represented by one Security.
The Trustee shall promptly notify the Company and each Security Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION e. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
the Trustee and to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
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(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal
amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be
redeemed and that (unless the Company shall default in
payment of the Redemption Price) interest thereon will
cease to accrue on and after said date,
(5) the conversion price, the date on which the right to
convert the Securities to be redeemed will terminate and
the place or places where such Securities may be
surrendered for conversion, and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Securities 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 and at the expense of the Company.
SECTION f. Deposit of Redemption Price.
At or prior to 11:00 a.m. (New York City time) on any Redemption Date, 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 same day funds sufficient to
pay the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date other than any Securities called
for redemption on that date which have been converted prior to the Redemption
Date.
If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.07) be paid to the Company upon Company Request or,
if then held by the Company, shall be discharged from such trust.
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SECTION g. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued and unpaid
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 3.07.
If any Security 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 Security.
SECTION h. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
an office or agency of the Company maintained for that purpose pursuant to
Section 10.02 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security without service charge, a new
Security or Securities, 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 Security so surrendered.
SECTION i. Conversion Arrangements on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange
for the purchase and conversion of any Securities surrendered for redemption by
an agreement with one or more investment banking firms or other purchasers to
purchase such Securities by paying to the Holders thereof, or to the Trustee or
Paying Agent in trust for such Holders, at or before 11:00 a.m. on the
Redemption Date, an amount not less than the Redemption Price, together with
interest accrued to the Redemption Date, payable by the Company on redemption of
such Securities. Notwithstanding anything to the contrary contained in this
Article XI, the obligation of the Company to pay the Redemption Price of such
Securities, together with interest accrued to the Redemption Date, shall be
satisfied and discharged to the extent such amount is so paid by such
purchasers. Pursuant to such an agreement, any Securities surrendered by the
Holder thereof for redemption or not duly surrendered for conversion by such
Holder shall be deemed acquired by such purchasers from such Holders and
surrendered by such purchasers for
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conversion, all as of immediately prior to the close of business of the
Redemption Date, subject to payment of the above amount as aforesaid.
ARTICLE 12.
SUBORDINATION OF SECURITIES
SECTION a. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the indebtedness represented
by the Securities and the payment of the principal of and premium, if any, and
interest on each and all of the Securities are hereby expressly made subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness. .
SECTION b. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding, relative to the Company or to its creditors, as such, or to a
substantial part of its assets, or (b) any proceeding for the liquidation,
dissolution or other winding up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any general
assignment for the benefits of creditors or any other marshaling of assets and
liabilities of the Company, then and in any such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all Obligations due
or to become due on or in respect of all Senior Indebtedness before the Holders
of the Securities are entitled to receive any payment or distribution of any
kind or character, whether in cash, property or securities, on account of
principal of or premium, if any, or interest on the Securities, and to that end
the holders of Senior Indebtedness shall be entitled to receive, for application
to the payment thereof, any payment or distribution of any kind or character,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of any kind or character in respect of the Securities,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Securities, before all Senior Indebtedness is paid in full, such payment or
distribution shall be held by the Trustee (if the Trustee has knowledge that
such payment or distribution is prohibited by this Section) or by such Holder in
trust for the holders of Senior Indebtedness, and shall be paid forthwith over
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and delivered to, the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include securities of the Company as
reorganized or readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, which securities are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article VIII shall not be
deemed a dissolution, winding up, liquidation, reorganization, general
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or which acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions set forth in Article VIII.
SECTION c. Acceleration of Securities.
Notwithstanding anything in this Indenture to the contrary, neither the
Trustee nor any Holder shall exercise any right either may have to accelerate
the maturity of the Securities at any time when payment of any amount owing on
the Securities is prohibited; provided, however, that such right may
nevertheless be exercised upon the earliest of (i) the acceleration of the
maturity of any Senior Indebtedness, (ii) the exercise by any holder of Senior
Indebtedness of any remedies available to it upon a default with respect to the
Senior Indebtedness, or (iii) the occurrence of an Event of Default described in
Section 5.01(8) or (9).
SECTION d. No Payment When Senior Indebtedness in Default.
(1) The Company may not make any payment (whether by
redemption, purchase, retirement, defeasance or
otherwise) to the Trustee or any Holder on account of
the principal of or premium, if any, or interest on the
Securities (other than payments and other distributions
made from any defeasance trust created pursuant to
Section 4.01 if the applicable deposit does not violate
Article IV of this Indenture) until all principal and
other Obligations with respect to the Senior
Indebtedness of the Company have been paid in full if:
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(i) a default in the payment of any principal of, premium, if any,
or interest on Senior Indebtedness occurs and is continuing beyond any
applicable grace period (a "Payment Default"); or
(ii) a default, other than a payment default, on Designated Senior
Indebtedness occurs and is continuing beyond any applicable grace period
(a "Nonpayment Default") that then permits holders of the Designated
Senior Indebtedness as to which such default relates to accelerate its
maturity, and the Trustee receives a notice of the default (a "Payment
Blockage Notice") from (1) the Company, (2) the lender under the Credit
Facility if such default relates to the Credit Facility or (3) the
holders, or a Representative of the holders, of at least 25% in principal
amount of such other Designated Senior Indebtedness if such default
relates to any other issue of Designated Senior Indebtedness; provided,
that if such Designated Senior Indebtedness is of the type referred to in
clause (b) of the definition thereof, the Payment Blockage Notice shall be
given by a Representative of the holders of at least 25% of such
Designated Senior Indebtedness. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section unless and until 365 days shall have elapsed
since the date of commencement of the payment blockage period resulting
from the immediately prior Payment Blockage Notice and all scheduled
payments of principal, premium, if any, and interest on the Securities
that have come due have been paid in full in cash. No nonpayment default
in respect of any Designated Senior Indebtedness that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice whether or not within a period of 365 days, unless such default
shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after receipt by
the Trustee of a Payment Blockage Notice, which, in either case, would
give rise to an event of default pursuant to any provisions under which an
event of default previously existed or was continuing shall constitute a
new event of default for this purpose).
(2) The Company shall resume payments on and distributions
in respect of the Securities upon:
(1) in the case of a Payment Default, the date on which the default
is cured or waived, or
(2) in the case of a Nonpayment Default, the earliest of (x) the
date on which such Nonpayment Default is cured or waived, (y) the date the
applicable Payment Blockage Notice is retracted by written notice to the
Trustee from the Representative of the holders of the relevant Designated
Senior Indebtedness which have given that Payment Blockage Notice and (z)
179 days after the date on which the applicable
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Payment Blockage Notice is received by the Trustee, if the maturity of
such Designated Senior Indebtedness has not been accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
(3) In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the
Holder of any Security prohibited by the foregoing
provisions of this Section, then and in such event such
payment shall be paid over and delivered forthwith to
the Company; provided, however, that the Trustee shall
only be required to return to the Company such payment
or any portion thereof that is held by the Trustee.
The provisions of this Section shall not apply to any payment with respect
to which Section 12.02 would be applicable.
SECTION e. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Obligations in respect of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of Senior Indebtedness
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company which by its express terms is subordinated to
other indebtedness of the Company to substantially the same extent as the
Securities are subordinated and is entitled to like rights of subrogation) to
the rights of the holders of Senior Indebtedness to receive payments and
distributions applicable to the Senior Indebtedness until the principal of and
premium, if any, and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness to which the Holders of the Securities or the Trustee would
be entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION f. Obligations of the Company Unconditional.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the
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principal of and premium, if any, and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company or the Holders of the Securities and
creditors of the Company other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Indebtedness
to receive distributions otherwise payable or deliverable to the Trustee or such
Holder.
SECTION g. Trustee to Effectuate Subordination.
Each holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION h. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Trustee or the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Trustee or the Holders of the Securities to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; (iv) exercise or refrain from exercising any rights
against the Company and any other Person; and (v) apply any and all sums
received from time to time to the Senior Indebtedness.
SECTION i. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the
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Securities. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Indebtedness or from any Representative therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.01,
shall be entitled in all respects to assume that no such facts exist; provided
that, if prior to the second Business Day preceding the date upon which by the
terms hereof any monies become payable hereunder, or in the event of the
execution of an instrument pursuant to Section 4.01 acknowledging satisfaction
and discharge of this Indenture, then if prior to the second Business Day
preceding the date of such execution, the Trustee or any Paying Agent shall not
have received with respect to such monies the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Trustee or such Paying Agent shall have full power and authority to receive such
monies and 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.
Subject to the provisions of Section 6.01, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a Representative therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a Representative therefor). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION j. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution in respect of the Securities or Senior
Indebtedness referred to in this Article, the Trustee, subject to the provisions
of Section 6.01, and the Holders of the Securities shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or 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 thereon and all other facts pertinent
thereto or to this Article.
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SECTION k. Trustee Not Fiduciary for Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness and shall not be liable to any such holders if it shall,
in good faith, mistakenly pay over or distribute to Holders of Securities or to
the Company or to any other Person cash, property or securities to which holders
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read into this
Article against the Trustee.
SECTION l. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.
SECTION m. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 12.12 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION n. Rights with Respect to Conversion and Certain Payments.
Nothing contained in this Article or elsewhere in this Indenture, or in
any of the Securities, shall prevent (x) the application by the Trustee or any
Paying Agent (including the Company if it shall then be acting as Paying Agent)
of any moneys deposited with it hereunder to the payment of or on account of the
principal of and premium, if any, or interest on Securities, including without
limitation, redemptions or repurchases pursuant to Articles XI or XIV if, at the
time of such deposit (which deposit was not more than 10 days prior to the time
of such payment), such payment would not have been prohibited by the foregoing
provisions of this Article or (y) conversion of the Securities.
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SECTION o. Certain Conversions Deemed Payment.
For purposes of this Article only, (1) the issuance and delivery of junior
securities upon conversion of Securities in accordance with Article XII shall
not be deemed to constitute a payment or distribution on account of the
principal of, or premium, if any, or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of
principal of such Security. For purposes of this Section, the term "junior
securities" means (a) shares of any stock of any class of the Company and (b)
securities of the Company which are subordinated in right of payment to the
prior payment in full of all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same extent
as, or to a greater extent than, the Securities are so subordinated as provided
in this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of the Securities, the right, which is absolute and unconditional, of the Holder
of any Security to convert such Security in accordance with Article XIII.
SECTION p. No Suspension of Remedies.
Except as provided in Section 12.03, nothing contained in this Article
shall limit the right of the Trustee or the Holders of the Securities to take
any action to accelerate the maturity of the Securities pursuant to the
provisions described under Article V and as set forth in this Indenture or to
pursue any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the holders, from time to time, of Senior
Indebtedness to receive the cash, property or securities receivable upon the
exercise of such rights or remedies.
ARTICLE 13.
CONVERSION OF SECURITIES
SECTION a. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Security or any portion of the principal
amount thereof which equals $1,000 or any integral multiple thereof may be
converted at any time after 60 days following the date of original issuance of
Securities under this Indenture at the principal amount thereof, or of such
portion thereof, into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock, at the conversion
price, determined as hereinafter provided, in effect at the time of conversion.
Such conversion right shall expire at the close of business on [___________,
2005]. In case a Security or portion thereof is called for redemption, such
conversion right in respect of the Security or portion so called shall expire at
the close of
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business on the second Business Day immediately preceding the applicable
Redemption Date, unless the Company defaults in making the payment due upon
redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially [$_______]
per share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in Section 13.04.
SECTION b. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any Security
shall surrender such Security, duly endorsed or assigned to the Company or in
blank, at any office or agency of the Company maintained pursuant to Section
10.02, accompanied by written notice to the Company in the form provided in the
Security (or such other notice as is acceptable to the Company) at such office
or agency that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to be
converted. Securities surrendered for conversion during the period from the
close of business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business on such Interest Payment Date (except in the
case of Securities or portions thereof which have been called for redemption on
a Redemption Date occurring within such period) must be accompanied by payment
in New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of Securities being surrendered for conversion. Except as
provided in the immediately preceding sentence and subject to the last paragraph
of Section 3.07, no payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Securities surrendered for conversion or
on account of any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock as and
after such time. As promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 13.03.
A Security in respect of which a Holder has delivered a Repurchase Notice
pursuant to Section 14.02(b) exercising the option of such Holder to require the
Company to repurchase such Security may be converted only if such Repurchase
Notice is withdrawn by a written notice of withdrawal delivered in accordance
with Section 14.03.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the
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expense of the Company, a new Security or Securities of authorized denominations
in aggregate principal amount equal to the unconverted portion of the principal
amount of such Security.
SECTION c. Fractions of Shares.
No fractional share of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof) so surrendered. Instead
of any fractional share of Common Stock which would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction in an amount
equal to the same fraction of the Closing Price (as hereinafter defined) at the
close of business on the day of conversion (or, if such day is not a Trading Day
(as hereafter defined), on the Trading Day immediately preceding such day).
For purposes of this Indenture, "Closing Price" shall mean the closing
price per share of Common Stock as quoted on the composite tape of the principal
national securities exchange upon which the Common Stock is listed or on the
Nasdaq National Market or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way, in
either case on such principal national securities exchange or on the Nasdaq
National Market or, if the Common Stock is not listed or admitted to trading on
any national securities exchange or quoted on the Nasdaq National Market, the
average of the closing bid and asked prices in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose, or, if such prices are not available, the fair
market value set by, or in a manner established by, the Board of Directors of
the Company in good faith. For purposes of this Indenture, "Trading Day" shall
mean any day on which (i) trading in the Common Stock is not suspended on any
national securities exchange or association or over-the-counter market at the
close of business and (ii) the Common Stock has traded at least once on the
national securities exchange or association or over-the-counter market that is
the primary market for trading of the Common Stock.
SECTION d. Adjustment of Conversion Price.
(1) In case the Company shall (i) issue Common Stock as a
dividend or distribution on its capital stock, including
the Common Stock, (ii) combine its outstanding shares of
Common Stock into a smaller number of shares, (iii)
subdivide its outstanding shares of Common Stock into a
greater number of shares, or (iv) issue by
reclassification of its Common Stock any shares of
capital stock of the Company, the conversion price in
effect immediately prior to such action shall be
adjusted so that the holder of any Security thereafter
surrendered for conversion shall be entitled to receive
the
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number of shares of Common Stock or other capital stock
of the Company that it would have owned or been entitled
to receive immediately following such action had such
Security been converted immediately prior to the
occurrence of such action. An adjustment made pursuant
to this subsection (a) shall become effective
immediately after the record date, in the case of a
dividend or distribution, or immediately after the
effective date, in the case of a subdivision,
combination or reclassification. If as a result of an
adjustment made pursuant to this subsection (a), the
holder of any Securities thereafter surrendered for
conversion shall become entitled to receive shares of
two or more classes of capital stock or shares of Common
Stock and other capital stock of the Company, the Board
of Directors (whose determination shall be conclusive
and shall be described in a statement filed by the
Company with the Trustee and with any conversion agent
as soon as practicable) shall determine the allocation
of the adjusted conversion price between or among shares
of such classes of capital stock or shares of Common
Stock and other capital stock.
(2) Subject to paragraph (f) of this Section, in case the
Company shall issue to all holders of the Common Stock,
rights, warrants or options entitling them to subscribe
for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share less
than the Current Market Price (determined as provided in
paragraph (g) of this Section) on the date fixed for the
determination of stockholders entitled to receive such
rights or warrants, the conversion price in effect at
the opening of business on the day following the date
fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which
the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at
such Current Market Price and the denominator shall be
the number of shares of Common Stock outstanding at the
close of business on the date fixed for such
determination plus the number of shares of Common Stock
so offered for subscription or purchase, such reduction
to become effective immediately after the opening of
business on the day following the date fixed for such
determination. For the purposes of this paragraph (b),
the number of shares of Common Stock at any time
outstanding shall not include shares held in the
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treasury of the Company. The Company shall not issue any
rights or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(3) Subject to the last sentence of this paragraph (c) and
to paragraph (f) of this Section, in case the Company
shall, by dividend or otherwise, distribute to all
holders of the Common Stock shares of any class of its
capital stock (other than Common Stock), evidences of
indebtedness, cash or other assets (including
securities, but excluding (i) any dividend or
distribution paid exclusively in cash, (ii) any dividend
or distribution referred to in paragraph (a) of this
Section, and (iii) any rights or warrants referred to in
paragraph (b) of this Section), the conversion price
shall be reduced by multiplying the conversion price in
effect immediately prior to the close of business on the
date fixed for the determination of stockholders
entitled to such distribution by a fraction of which the
numerator shall be the Current Market Price (determined
as provided in paragraph (g) of this Section) on such
date less the fair market value (as determined by the
Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) on such
date of the portion of the evidences of indebtedness,
shares of capital stock, cash and other assets to be
distributed applicable to one share of Common Stock and
the denominator shall be such Current Market Price, such
reduction to become effective immediately prior to the
opening of business on the day following such date. If
the Board of Directors determines the fair market value
of any distribution for purposes of this paragraph (c)
by reference to the actual or when-issued trading market
for any securities comprising part or all of such
distribution, it must in doing so consider the prices in
such market over the same period used in computing the
Current Market Price pursuant to paragraph (g) of this
Section, to the extent possible. For purposes of this
paragraph (c), any dividend or distribution that
includes shares of Common Stock, rights or warrants to
subscribe for or purchase shares of Common Stock or
securities convertible into or exchangeable for shares
of Common Stock shall be deemed to be (x) a dividend or
distribution of the evidences of indebtedness, cash,
assets or shares of capital stock other than such shares
of Common Stock, such rights or warrants or such
convertible or exchangeable securities (making any
conversion price reduction required by this paragraph
(c)) immediately followed by (y) in the case of such
shares of Common Stock or such rights or warrants, a
dividend or distribution thereof (making
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any further conversion price reduction required by
paragraph (a) and (b) of this Section, except any shares
of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the
close of business on the date fixed for such
determination" within the meaning of paragraph (a) of
this Section), or (z) in the case of such convertible or
exchangeable securities, a dividend or distribution of
the number of shares of Common Stock as would then be
issuable upon the conversion or exchange thereof,
whether or not the conversion or exchange of such
securities is subject to any conditions (making any
further conversion price reduction required by paragraph
(a) of this Section, except the shares deemed to
constitute such dividend or distribution shall not be
deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of
paragraph (a) of this Section).
(4) In case the Company shall, by dividend or otherwise, at
any time distribute to all holders of the Common Stock
cash (excluding any cash that is distributed as part of
a distribution referred to in paragraph (c) of this
Section or in connection with a transaction to which
Section 13.11 applies) in an aggregate amount that,
together with (A) the aggregate amount of any other
distributions to all holders of the Common Stock made
exclusively in cash within the 12 months preceding the
date fixed for the determination of stockholders
entitled to such distribution and in respect of which no
conversion price adjustment pursuant to this paragraph
(d) has been made previously and (B) the aggregate of
any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) as of
such date of determination of any other consideration
payable in respect of any tender offer by the Company or
a Subsidiary for all or any portion of the Common Stock
consummated within the 12 months preceding such date of
determination and in respect of which no conversion
price adjustment pursuant to paragraph (e) of this
Section has been made previously, exceeds 10% of the
product of the Current Market Price (determined as
provided in paragraph (g) of this Section) on such date
of determination times the number of shares of Common
Stock outstanding on such date, the conversion price
shall be reduced by multiplying the conversion price in
effect immediately prior to the close of business on
such date of determination by a fraction of which the
numerator shall be the Current Market Price (determined
as provided in paragraph (g) of this Section) on such
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date less the amount of such cash previously distributed
or to be distributed at such time applicable to one
share of Common Stock and the denominator shall be such
Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day
after such date.
(5) In case a tender offer made by the Company or any
Subsidiary for all or any portion of the Common Stock
shall be consummated and such tender offer shall involve
an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution) as of the last time (the "Expiration
Time") that tenders may be made pursuant to such tender
offer (as it shall have been amended) that, together
with (A) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a
Board Resolution) as of the Expiration Time of the other
consideration paid in respect of any other tender offer
by the Company or a Subsidiary for all or any portion of
the Common Stock consummated within the 12 months
preceding the Expiration Time and in respect of which no
conversion price adjustment pursuant to this paragraph
(e) has been made previously and (B) the aggregate
amount of any distributions to all holders of the Common
Stock made exclusively in cash within the 12 months
preceding the Expiration Time and in respect of which no
conversion price adjustment pursuant to paragraph (d) of
this Section has been made previously, exceeds 10% of
the product of the Current Market Price (determined as
provided in paragraph (g) of this Section) immediately
prior to the Expiration Time times the number of shares
of Common Stock outstanding (including any tendered
shares) at the Expiration Time, the conversion price
shall be reduced by multiplying the conversion price in
effect immediately prior to the Expiration Time by a
fraction of which the numerator shall be (x) the product
of the Current Market Price (determined as provided in
paragraph (g) of this Section) immediately prior to the
Expiration Time times the number of shares of Common
Stock outstanding (including any tendered shares at the
Expiration Time) minus (y) the fair market value
(determined as aforesaid) of the aggregate consideration
payable to stockholders upon consummation of such tender
offer and the denominator shall be the product of (A)
such Current Market Price times (B) such number of
outstanding shares at the Expiration Time minus the
number of shares accepted for payment in such
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tender offer (the "Purchased Shares"), such reduction to
become effective immediately prior to the opening of
business on the day following the Expiration Time;
provided, that if the number of Purchased Shares or the
aggregate consideration payable therefor have not been
finally determined by such opening of business, the
adjustment required by this paragraph (e) shall, pending
such final determination, be made based upon the
preliminarily announced results of such tender offer,
and, after such final determination shall have been
made, the adjustment required by this paragraph (e)
shall be made based upon the number of Purchased Shares
and the aggregate consideration payable therefor as so
finally determined.
(6) Rights, warrants or options issued by the Company to all
holders of the Common Stock entitling the holders
thereof to subscribe for or purchase shares of Common
Stock (either initially or under certain circumstances),
which rights, warrants or options (i) are deemed to be
transferred with such shares of Common Stock, (ii) are
not exercisable and (iii) are also issued in respect of
future issuances of Common Stock, in each case in
clauses (i) through (iii) until the occurrence of a
specified event or events ("Trigger Event"), shall for
purposes of this Section 13.04 not be deemed issued
until the occurrence of the earliest Trigger Event. If
any such rights, warrants or options, including any such
existing rights, warrants or options distributed prior
to the date of this Indenture, are subject to subsequent
events, upon the occurrence of each of which such
rights, warrants or options shall become exercisable to
purchase different securities, evidences of indebtedness
or other assets, then the occurrence of each such event
shall be deemed to be such date of issuance and record
date with respect to new rights, warrants or options
(and a termination or expiration of the existing rights,
warrants or options without exercise by the holder
thereof). In addition, in the event of any distribution
(or deemed distribution) of such rights, warrants or
options, or any Trigger Event with respect thereto, that
was counted for purposes of calculating a distribution
amount for which an adjustment to the conversion price
under this Section 13.04 was made, (1) in the case of
any such right, warrant or option which shall all have
been redeemed or repurchased without exercise by any
holders thereof, the conversion price shall be
readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as
the case may be, as though it were a cash distribution,
equal to the per share redemption or repurchase
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price received by a holder or holders of Common Stock
with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such
rights, warrants or options which shall have expired or
been terminated without exercise by any holders thereof,
the conversion price shall be readjusted as if such
rights, warrants and options had not been issued.
Notwithstanding any other provision of this Section 13.04 to the contrary,
rights, warrants, evidences of indebtedness, other securities, cash or other
assets (including, without limitation, any rights distributed pursuant to any
stockholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 13.04 if the Company makes proper provision so that
each holder of Securities who converts a Security (or any portion thereof) after
the date fixed for determination of stockholders entitled to receive such
distribution shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversions, the amount and kind
of such distributions that such holder would have been entitled to receive if
such holder had, immediately prior to such determination date, converted such
Security into Common Stock.
(7) For the purpose of any computation under this paragraph
and paragraphs (b), (c), (d) and (e) of this Section,
the current market price per share of Common Stock (the
"Current Market Price") on any date shall be deemed to
be the average of the daily Closing Prices for the
shorter of (i) 30 consecutive Business Days ending on
the last full Trading Day on the exchange or market
referred to in determining such daily Closing Prices
prior to the time of determination or (ii) the period
commencing on the date next succeeding the first public
announcement of the issuance of such rights or warrants,
such distribution or such tender offer, as the case may
be, through such last full Trading Day prior to the time
of determination.
(8) The Company may make such reductions in the conversion
price, in addition to those required by the foregoing
paragraphs of this Section, as it considers to be
advisable (as evidenced by a Board Resolution) in order
that any event treated for federal income tax purposes
as a dividend of stock or stock rights shall not be
taxable to the recipients or, if that is not possible,
to diminish any income taxes that are otherwise payable
because of such event.
(9) No adjustment in the conversion price shall be required
unless such adjustment (plus any other adjustments not
previously
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made by reason of this paragraph (i)) would require an
increase or decrease of at least 1% in the conversion
price; provided, however, that any adjustments which by
reason of this paragraph (i) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 13.04 shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be.
(10) In the event that at any time as a result of an
adjustment made pursuant to subsection (a) of this
Section 13.04, the holder of any Security thereafter
surrendered for conversion shall become entitled to
receive any shares of the Company other than Common
Stock, thereafter the conversion price of such other
shares so receivable upon conversion of any Security
shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable
to the provisions with respect to Common Stock contained
in this Article XIII.
(11) Notwithstanding any other provision of this Section
13.04, no adjustment to the conversion price shall
reduce the conversion price below the then par value per
share of the Common Stock, and any such purported
adjustment shall instead reduce the conversion price to
such par value. The Company hereby covenants not to take
any action to increase the par value per share of the
Common Stock.
SECTION e. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(1) the Company shall compute the adjusted conversion price
in accordance with Section 13.04 or 13.11, as
applicable, and shall prepare an Officers' Certificate
signed by the Treasurer of the Company setting forth the
adjusted conversion price and showing in reasonable
detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed (with a
copy to the Trustee) at each office or agency maintained
for the purpose of conversion of Securities pursuant to
Section 10.02; and
(2) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price
shall forthwith be prepared, and as soon as practicable
after it is prepared, such notice
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shall be mailed by the Company to all Holders at their
last addresses as they shall appear in the Security
Register.
SECTION f. Notice of Certain Corporate Action.
In case:
(1) the Company shall take an action that would require a
conversion price adjustment pursuant to Section
13.04(b), (c), (d) or (e); or
(2) the Company shall authorize the granting to the holders
of its Common Stock of rights or warrants to subscribe
for or purchase any shares of capital stock of any class
or of any other rights (excluding shares of capital
stock or options for capital stock issued pursuant to a
benefit plan for employees, officers or directors of the
Company); or
(3) of any reclassification of the Common Stock (other than
a subdivision or combination of the outstanding shares
of Common Stock), or of any consolidation, merger or
share exchange to which the Company is a party and for
which approval of any stockholders of the Company is
required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
(4) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(5) the Company or any Subsidiary shall commence a tender
offer for all or a portion of the outstanding shares of
Common Stock (or shall amend any such tender offer to
change the maximum number of shares being sought or the
amount or type of consideration being offered therefor);
then the Company shall cause to be filed at each office or agency maintained
pursuant to Section 10.02, and shall cause to be mailed to all Holders at their
last addresses as they shall appear in the Security Register, at least 21 days
(or 10 days in any case specified in clause (a), (b) or (e) above) prior to the
applicable record, effective or expiration date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or granting of rights or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record who will
be entitled to such dividend, distribution, rights or warrants are to be
determined, (y) the date on which such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective,
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and the date 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, cash
or other property deliverable upon such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding up, or (z)
the date on which such tender offer commenced, the date on which such tender
offer is scheduled to expire unless extended, the consideration offered and the
other material terms thereof (or the material terms of any amendment thereto).
Neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of any action described in clauses (a) through (e) of
this Section 13.06.
SECTION g. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive and other rights, out of the authorized but unissued Common Stock or
out of the Common Stock held in treasury, for the purpose of effecting the
conversion of Securities, the full number of shares of Common Stock then
issuable upon the conversion of all outstanding Securities. Shares of Common
Stock issuable upon conversion of outstanding Securities shall be issued out of
the Common Stock held in Treasury to the extent available.
SECTION h. Taxes on Conversions.
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
SECTION i. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Securities will upon issue be fully paid and nonassessable
and, except as provided in Section 13.08, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
SECTION j. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the Trustee
to be canceled by or at the direction of the Trustee, which shall dispose of the
same as provided in Section 3.09.
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SECTION k. Provisions of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with, or merger of the Company
into, any other Person, any merger of another Person into the Company (other
than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock) or any sale or
transfer of all or substantially all of the assets of the Company (other than to
a wholly-owned subsidiary), the Person formed by such consolidation or resulting
from such merger or which acquires such assets, as the case may be, shall
execute and deliver to the Trustee a supplemental indenture providing that the
Holder of each Security then Outstanding shall have the right thereafter, during
the period such Security shall be convertible as specified in Section 13.01, to
convert such Security only into the kind and amount of securities, cash and
other property, if any, receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock into which such
Security might have been converted immediately prior to such consolidation,
merger, sale or transfer, assuming such holder of Common Stock (i) is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be (a "Constituent Person"), or an Affiliate of a Constituent Person
and (ii) failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each share of Common Stock held immediately
prior to such consolidation, merger, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("nonelecting share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares). Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
SECTION l. Trustee's Disclaimer.
The Trustee has no duty to determine when an adjustment under this Article
XIII should be made, how it should be made or what such adjustment should be,
but may accept as conclusive evidence of the correctness of any such adjustment,
and shall be protected in relying upon, the Officers' Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 13.05. The Trustee makes no representation as to the validity or value
of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the Company's failure to comply with any
provisions of this Article XIII.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 13.11, but may
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accept as conclusive evidence of the correctness thereof, and shall be protected
in relying upon, the Officers' Certificate with respect thereto which the
Company is obligated to file with the Trustee pursuant to Section 13.11.
ARTICLE 14.
RIGHT TO REQUIRE REPURCHASE
SECTION a. Right to Require Repurchase.
In the event that there shall occur a Change in Control (as defined in
Section 14.06), then each Holder shall have the right, at such Holder's option,
to require the Company to purchase, and upon the exercise of such right, the
Company shall, subject to the provisions of Section 12.04, purchase, all or any
part of such Holder's Securities on the date (the "Repurchase Date") that is 30
days after the date the Company gives notice of the Change in Control as
contemplated in Section 14.02(a) at a price (the "Repurchase Price") equal to
100% of the principal amount thereof, together with accrued and unpaid interest
to the Repurchase Date.
SECTION b. Notice; Method of Exercising Repurchase Right.
(1) On or before the 15th day after the occurrence of a
Change in Control, the Company, or at the request of the
Company, the Trustee (in the name and at the expense of
the Company), shall give notice of the occurrence of the
Change in Control and of the repurchase right set forth
herein arising as a result thereof by first-class mail,
postage prepaid, to the Trustee and to each Holder of
the Securities at such Holder's address appearing in the
Security Register. The Company shall also deliver a copy
of such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the event constituting the Change in Control and the date thereof,
(2) the Repurchase Date,
(3) the date by which the repurchase right must be exercised,
(4) the Repurchase Price,
(5) that Securities surrendered for repurchase pursuant to this Article
may be converted into Common Stock only to the extent that the
Repurchase Notice has been withdrawn in accordance with the terms of
this Indenture, and
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(6) the instructions a Holder must follow to exercise a repurchase right
and to withdraw a Repurchase Notice.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right. The Trustee shall have no
affirmative obligation to determine if there shall have occurred a Change in
Control.
(2) To exercise a repurchase right, a Holder shall deliver
to the Company (or an agent designated by the Company
for such purpose in the notice referred to in (a) above)
or to the Trustee on or before the close of business on
the Repurchase Date (i) written notice (a "Repurchase
Notice") of the Holder's exercise of such right, which
Repurchase Notice shall set forth the name of the
Holder, the principal amount of the Security or
Securities (or portion of a Security) to be repurchased,
and a statement that an election to exercise the
repurchase right is being made thereby, and (ii) the
Security or Securities with respect to which the
repurchase right is being exercised, duly endorsed for
transfer to the Company.
(3) Upon receipt by the Company, its agent or the Trustee of
a Repurchase Notice specified in Section 14.02(b), the
Holder of any Security in respect of which such
Repurchase Notice was given shall (unless such
Repurchase Notice is withdrawn as specified in Section
14.03) thereafter be entitled to receive solely the
Repurchase Price with respect to such Security or
portion thereof as to which the repurchase right has
been exercised. In the event a repurchase right shall be
exercised in accordance with the terms hereof, the
Company shall on the Repurchase Date pay or cause to be
paid in cash to the Holder thereof the Repurchase Price
of the Security or Securities as to which the repurchase
right had been exercised; provided, however, that
installments of interest whose Stated Maturity is on or
prior to the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business
on the relevant Record Date according to their terms and
the provisions of Section 3.07. Securities in respect of
which a Repurchase Notice has been given by the Holder
thereof may not be converted into shares of Common Stock
on or after the date of the delivery of such Repurchase
Notice unless such notice has first been validly
withdrawn.
SECTION c. Withdrawal of Repurchase Notice.
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A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered by the Holder to the Company (or an agent designated by the
Company for such purpose in the notice referred to in Section 14.02(a)) or to
the Trustee at any time prior to the close of business on the Repurchase Date,
specifying:
(i) the certificate number of each Security in respect of which such
notice of withdrawal is being submitted;
(ii) the principal amount of the Security or portion thereof with
respect to which such notice of withdrawal is being submitted; and
(iii) the principal amount, if any, of such Security that remains
subject to the original Repurchase notice and that has been or will be
delivered for purchase by the Company.
SECTION d. Deposit of Repurchase Price.
On or prior to the Repurchase Date, 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 same day funds sufficient to pay the Repurchase Price of the Securities
which are to be repaid on the Repurchase Date.
If and to the extent that the aggregate amount of money so deposited with
the Trustee or with any Paying Agent or so segregated and held in trust for the
purchase of Securities exceeds the aggregate Repurchase Price of the Securities
or portion thereof that the Company is obligated to purchase, any such excess
funds shall be paid to the Company upon Company Request or, if then held by the
Company, shall be discharged from such trust.
SECTION e. Securities Not Repurchased on Repurchase Date.
If any Security surrendered for repurchase shall not be so paid on the
Repurchase Date, the principal shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the rate per annum borne
by such Security.
SECTION f. Securities Repurchased in Part.
Any Security which is to be repurchased only in part shall be surrendered
at any office or agency of the Company designated for that purpose pursuant to
Section 10.02 (with, if the Company or the Trustee so requires, due endorsement
by, or written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder 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 Security without service charge, a new
Security or
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Securities of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unrepurchased
portion of the principal of the Security so surrendered.
SECTION g. Certain Definitions.
For purposes of this Article: a "Change in Control" shall occur when :
(a) all or substantially all of the assets of the
Company or of the Company and its Subsidiaries,
taken as a whole, are sold in one transaction or
any series of related transactions as an entirety
to any Person or related group of Persons;
(b) there shall be consummated any consolidation or
merger of the Company (A) in which the Company is
not the continuing or surviving corporation (other
than a consolidation or merger with a wholly owned
subsidiary of the Company in which all shares of
Common Stock outstanding immediately prior to the
effectiveness thereof are changed into or
exchanged for the same consideration) or (B)
pursuant to which the Common Stock would be
converted into cash, securities or other property,
in each case, other than a consolidation or merger
of the Company in which the holders of the Common
Stock immediately prior to the consolidation or
merger have, directly or indirectly, at least a
majority of the total voting power of all classes
of capital stock entitled to vote generally in the
election of directors of the continuing or
surviving corporation immediately after such
consolidation or merger in substantially the same
proportion as their ownership of Common Stock
immediately before such transaction;
(c) any Person (other than a director, officer or
beneficial owner currently known by the Company to
own more than 5% of the outstanding shares of
Common Stock), or any such Persons acting together
which would constitute a "group" for purposes of
Section 13(d) of the Exchange Act (a "Group"),
together with any Affiliates thereof, shall
beneficially own (as defined in Rule 13d-3 under
the Exchange Act) at least 50% of the total voting
power of all classes of capital stock of the
Company entitled to vote generally in the election
of directors of the Company;
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(d) at any time during any consecutive two-year
period, individuals who at the beginning of such
period constituted the Board of Directors
(together with any new directors whose election by
the Board of Directors or whose nomination for
election by the stockholders of the Company was
approved by a vote of 50% of the directors then
still in office who were either directors at the
beginning of such period or whose election or
nomination for election was previously so
approved) cease for any reason to constitute a
majority of the Board of Directors then in office;
or
(e) the Company is liquidated or dissolved.
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100
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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.
AVATAR HOLDINGS INC.
By:_________________________________________
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Attest:
________________________
Xxxxxxx X. Xxxxxxxx
Secretary
THE CHASE MANHATTAN BANK,
as Indenture Trustee
By__________________________________________
Name:
Title:
Attest:
_____________________________
000
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On the ___ day of _______ 1998, before me personally came Xxxxxx X.
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he is
President and Chief Executive Officer of Avatar Holdings Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
_______________________________
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of January 1998, before me personally
came_________________________ to me known, who, being by me duly sworn, did
depose and say that he is a ___________________________ of The Chase Manhattan
Bank, a New York banking corporation, described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation; and that he signed his
name thereto by like authority.
_________________________________
Notary Public
