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VANSTAR CORPORATION,
AS ISSUER
TO
WILMINGTON TRUST COMPANY,
AS TRUSTEE
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INDENTURE
DATED AS OF OCTOBER 2, 1996
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$180,412,350
(SUBJECT TO INCREASE TO UP TO $207,474,200 IN
THE EVENT AN OVER-ALLOTMENT OPTION IS EXERCISED)
6 3/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2016
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VANSTAR CORPORATION
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310. . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a) (1)
609
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .609
(a) (3) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608, 610
Section 311. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
613
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .613
Section 312. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
701, 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
703(a)
(a) (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
704
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Section 315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
601
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .602
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .601
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .601
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .514
Section 316. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
101
(a) (1) (A) . . . . . . . . . . . . . . . . . . . . . . . . . 502, 512
(a) (1) (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . .513
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .508
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317. . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a) (1)
503, 504
(a) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .504
-i-
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .402, 1003
Section 318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(a)
107
______________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-ii-
TABLE OF CONTENTS
PAGE
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RECITALS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE - Definitions and Other Provisions of General Application. . . . . 2
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . .10
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . .10
SECTION 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . .11
SECTION 105. Notices, Etc., to Trustee and the Company . . . . . . . . .12
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . .12
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . .13
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . . .13
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . .13
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . .13
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . .13
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . .14
ARTICLE TWO - Security Forms . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . .14
SECTION 202. Initial Issuance to Property Trustee. . . . . . . . . . . .14
ARTICLE THREE - The Securities . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . . . . .16
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 303. Execution, Authentication, Delivery and Date. . . . . . . .17
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . . . . .18
SECTION 305. Registration, Registration of Transfer and Exchange . . . .18
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. . . . . .19
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . . .20
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . .21
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 310. Right of Set Off. . . . . . . . . . . . . . . . . . . . . .22
SECTION 311. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 312. Option to Extend Interest Payment Period. . . . . . . . . .22
SECTION 313. Paying Agent, Security Registrar and Conversion Agent . . .24
SECTION 314. Global Security . . . . . . . . . . . . . . . . . . . . . .24
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE FOUR - Satisfaction and Discharge. . . . . . . . . . . . . . . . . . .25
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . .25
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . .26
ARTICLE FIVE - Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . .26
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . . .28
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . .29
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 506. Application of Money Collected. . . . . . . . . . . . . . .30
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . .30
SECTION 508. Unconditional Right of Holders to Receive Principal and
Interest and Convert. . . . . . . . . . . . . . . . . . . .31
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . .31
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . .31
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . .32
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . .32
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . .32
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . .33
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . . . . .33
SECTION 516. Enforcement by Holders of Preferred Securities. . . . . . .33
ARTICLE SIX - The Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . .34
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . .34
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . .34
SECTION 604. Not Responsible for Recitals or Issuance of Securities. . .35
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . .35
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . .35
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . . .36
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . .36
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . .36
SECTION 610. Resignation and Removal; Appointment of Successor . . . . .37
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . .38
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . .38
SECTION 613. Preferential Collection of Claims Against Company . . . . .39
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE SEVEN - Holders' Lists and Reports by Trustee and Company. . . . . . .39
SECTION 701. Company to Furnish Trustee Names and Addressees of Holders.39
SECTION 702. Preservation of Information; Communications to Holders. . .39
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . .40
SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . . . . .40
ARTICLE EIGHT - Consolidation, Merger, Conveyance, Transfer or Lease . . . . .40
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms. . . .40
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . . . . .41
ARTICLE NINE - Supplemental Indentures . . . . . . . . . . . . . . . . . . . .42
SECTION 901. Supplemental Indentures without Consent of Holders. . . . .42
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . .42
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . .44
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . .44
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . .44
SECTION 906. Reference in Securities to Supplemental Indentures. . . . .44
ARTICLE TEN - Covenants; Representations and Warranties. . . . . . . . . . . .44
SECTION 1001. Payment of Principal and Interest. . . . . . . . . . . . .44
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . . .45
SECTION 1003. Money for Security Payments to Be Held in Trust. . . . . .45
SECTION 1004. Statement by Officers as to Default. . . . . . . . . . . .46
SECTION 1005. Limitation on Dividends; Transactions with Affiliates;
Covenants as to the Trust. . . . . . . . . . . . . . . . .46
SECTION 1006. Payment of Expenses of the Trust . . . . . . . . . . . . .47
SECTION 1007. Registration Rights. . . . . . . . . . . . . . . . . . . .48
SECTION 1008. Rule 144A Information Requirement. . . . . . . . . . . . .48
SECTION 1009. Listing the Securities . . . . . . . . . . . . . . . . . .48
ARTICLE ELEVEN - Redemption of Securities. . . . . . . . . . . . . . . . . . .49
SECTION 1101. Right of Redemption. . . . . . . . . . . . . . . . . . . .49
SECTION 1102. Applicability of Article . . . . . . . . . . . . . . . . .49
SECTION 1103. Election to Redeem; Notice to Trustee. . . . . . . . . . .49
SECTION 1104. Selection by Trustee of Securities to Be Redeemed. . . . .50
SECTION 1105. Notice of Redemption . . . . . . . . . . . . . . . . . . .50
SECTION 1106. Deposit of Redemption Price. . . . . . . . . . . . . . . .51
SECTION 1107. Securities Payable on Redemption Date. . . . . . . . . . .51
SECTION 1108. Securities Redeemed in Part. . . . . . . . . . . . . . . .51
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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SECTION 1109. Optional Redemption. . . . . . . . . . . . . . . . . . . .52
SECTION 1110. Tax Event Redemption . . . . . . . . . . . . . . . . . . .53
SECTION 1111. No Sinking Fund. . . . . . . . . . . . . . . . . . . . . .53
ARTICLE TWELVE - Subordination of Securities . . . . . . . . . . . . . . . . .53
SECTION 1201. Agreement to Subordinate . . . . . . . . . . . . . . . . .53
SECTION 1202. Default on Senior Indebtedness . . . . . . . . . . . . . .54
SECTION 1203. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . .54
SECTION 1204. Subrogation. . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 1205. Trustee to Effectuate Subordination. . . . . . . . . . . .56
SECTION 1206. Notice by the Company. . . . . . . . . . . . . . . . . . .56
SECTION 1207. Rights of the Trustee; Holders of Senior Indebtedness. . .57
SECTION 1208. Subordination May Not Be Impaired. . . . . . . . . . . . .58
SECTION 1209. Certain Conversions Deemed Payment . . . . . . . . . . . .58
SECTION 1210. Article Applicable to Paying Agents. . . . . . . . . . . .59
ARTICLE THIRTEEN - Conversion of Securities. . . . . . . . . . . . . . . . . .59
SECTION 1301. Conversion Rights. . . . . . . . . . . . . . . . . . . . .59
SECTION 1302. Conversion Procedures. . . . . . . . . . . . . . . . . . .59
SECTION 1303. Conversion Price Adjustments . . . . . . . . . . . . . . .61
SECTION 1304. Fundamental Change . . . . . . . . . . . . . . . . . . . .65
SECTION 1305. Notice of Adjustments of Conversion Price. . . . . . . . .67
SECTION 1306. Prior Notice of Certain Events . . . . . . . . . . . . . .68
SECTION 1307. Certain Defined Terms. . . . . . . . . . . . . . . . . . .68
SECTION 1308. Dividend or Interest Reinvestment Plans. . . . . . . . . .70
SECTION 1309. Certain Additional Rights. . . . . . . . . . . . . . . . .70
SECTION 1310. Restrictions on Common Stock Issuable Upon Conversion. . .71
SECTION 1311. Trustee Not Responsible for Determining Conversion Price
or Adjustments . . . . . . . . . . . . . . . . . . . . . .71
ARTICLE FOURTEEN - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 1401. No Recourse; Immunity of Incorporators, Stockholders,
Officers and Directors . . . . . . . . . . . . . . . . . .72
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INDENTURE, dated as of October 2, 1996, between Vanstar Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and Wilmington Trust Company, a
Delaware banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, Vanstar Financing Trust, a Delaware business trust (the "Trust"),
formed under the Amended and Restated Declaration of Trust among the Company, as
sponsor, Wilmington Trust Company, as property trustee (the "Property Trustee"),
Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee") and ▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., as regular trustee (the "Regular Trustee"), dated as of
October 2, 1996 (the "Declaration"), pursuant to the Purchase Agreement (the
"Purchase Agreement"), dated September 26, 1996, among the Company, the Trust
and the Initial Purchasers named therein, will issue and sell up to 3,500,000
(or 4,025,000 if the over-allotment option is exercised) of its 6 3/4% Trust
Convertible Preferred Securities (the "Preferred Securities") with a liquidation
amount of $50 per Preferred Security having an aggregate liquidation amount with
respect to the assets of the Trust of $175,000,000 (or $201,250,000 if the over-
allotment option is exercised);
WHEREAS, the Regular Trustees of the Trust, on behalf of the Trust, will
execute and deliver to the Company or one of Company's subsidiaries Common
Securities evidencing an ownership interest in the Trust, registered in the name
of the Company or one of Company's subsidiaries, in an aggregate amount equal to
three percent of the capitalization of the Trust, equivalent to 108,247 Common
Securities (or 124,484 Common Securities if the over-allotment option is
exercised), with a liquidation amount of $50 per Common Security, having an
aggregate liquidation amount with respect to the assets of the Trust of
$5,412,350 (or $6,224,200 if the over-allotment option is exercised) (the
"Common Securities"), pursuant to the Purchase Agreement of Common Securities,
dated as of October 2, 1996, between the Trust and the Company;
WHEREAS, the Trust will use the proceeds from the sale of the Preferred
Securities and the Common Securities to purchase from the Company the Securities
(as defined below) in an aggregate principal amount of $180,412,350 (or
$207,474,200 if the over-allotment option is exercised);
WHEREAS, the Company is guaranteeing the payment of distributions on the
Preferred Securities, and payment of the Redemption Price and payments on
liquidation with respect to the Preferred Securities, to the extent provided in
the Preferred Securities Guarantee Agreement (the "Guarantee") between the
Company and Wilmington Trust Company, as guarantee trustee, for the benefit of
the holders of the Preferred Securities from time to time;
WHEREAS, the Company has duly authorized the creation of an issue of 6 3/4%
Convertible Subordinated Debentures due 2016 (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;
and
WHEREAS, so long as the Trust is a Holder of Securities, and any Preferred
Securities are outstanding, the Declaration provides that the holders of
Preferred Securities may cause the Conversion Agent to (a) exchange such
Preferred Securities for Securities held by the Trust and (b) immediately
convert such Securities into Common Stock;
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 ONE
Definitions and Other Provisions
of General Application
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) 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;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles as
of the relevant date; and
(4) except as otherwise indicated, 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.
"ACT," when used with respect to any Holder, has the meaning specified in
Section 104(a).
"ADDITIONAL INTEREST" has the meaning specified in Section 301.
-2-
"ADDITIONAL PAYMENTS" means Compounded Interest and Additional Interest, if
any.
"AFFILIATE", of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.
"BOARD OF DIRECTORS" means the board of directors of the Company or any
duly authorized committee of such 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
applicable 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 any day other than a day on which banking institutions
in New York, New York, San Francisco, California or in Wilmington, Delaware are
authorized or required by law to close.
"CLOSING PRICE" has the meaning specified in Section 1307(b).
"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 SECURITIES" has the meaning specified in the recitals to this
Instrument.
"COMMON SECURITIES GUARANTEE" means any guarantee that the Company may
enter into that operates, directly or indirectly, for the benefit of holders of
Common Securities of the Trust.
"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 pursuant to its terms.
However, subject to the provisions of Article Thirteen, 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 instrument 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
-3-
involuntary liquidation, dissolution or winding up of the Company and which
are not subject to redemption by the Company pursuant to their terms;
PROVIDED, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable on conversion 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'S REQUEST" or "COMPANY'S ORDER" means a written request or order
delivered to the Trustee and signed in the name of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"COMPOUNDED INTEREST" has the meaning specified in Section 312(a) .
"CONVERSION AGENT" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 1302
hereof.
"CONVERSION DATE" has the meaning specified in Section 1302(a).
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in the
State of Delaware, at which at any particular time its corporate trust business
shall be administered and which at the date of this Indenture is ▇▇▇▇▇▇ Square
North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Corporate Trust Administration.
"DECLARATION" has the meaning specified in the Recitals of this instrument.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DELAWARE TRUSTEE" has the meaning given it in the Recitals of this
instrument.
"DEPOSITARY" means, with respect to any Securities issued in the form of
one or more Global Security, a clearing agency registered under the Exchange Act
that is dedicated to act as Depositary for the Securities.
"DIRECT ACTION" means a proceeding directly instituted by a holder of
Preferred Securities for enforcement of payment to such holder of the principal
of or interest on the Securities having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder on or
after the respective due date specified in the Securities, if a Declaration
Event of Default has occurred and is continuing and such event is attributable
to the failure of the
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Company to pay interest or principal on the Securities on the date such
interest or principal is otherwise payable (or in the case of redemption, on
the redemption date.)
"DISSOLUTION EVENT" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration and the Securities held by the Property Trustee are to be
distributed to the holders of Trust Securities issued by the Trust PRO RATA in
accordance with the Declaration.
"DISSOLUTION TAX OPINION" has the meaning specified in the Declaration.
"EFFECTIVENESS PERIOD" has the meaning specified in Section 1007.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"EXPIRATION TIME" has the meaning specified in Section 1303(e).
"EXTENSION PERIOD" has the meaning specified in Section 312(a).
"GLOBAL SECURITY" has the meaning specified in Section 314(a)(i).
"GUARANTEE" has the meaning specified in the Recitals to this instrument.
"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 govern
this instrument and any such supplemental indenture, respectively.
"INITIAL PURCHASERS," with respect to the Preferred Securities, means
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Company LLC, Alex. ▇▇▇▇▇ & Sons Incorporated, ▇▇▇▇▇▇▇▇▇
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation and The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc.
"INTEREST PAYMENT DATE" has the meaning specified in Section 301.
"INVESTMENT COMPANY EVENT" has the meaning specified in the Declaration.
"LIQUIDATED DAMAGES" has the meaning specified in Section 1007.
-5-
"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 or by declaration of acceleration, call
for redemption or otherwise.
"MINISTERIAL ACTION" has the meaning specified in Section 1110.
"90-DAY PERIOD" has the meaning specified in Section 1110.
"NO RECOGNITION OPINION" has the meaning specified in the Declaration.
"NON BOOK-ENTRY PREFERRED SECURITIES" has the meaning specified in
Section 314(a)(ii).
"NOTICE OF CONVERSION" means the notice to be given by a holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holder.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, 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 1004 shall be the principal
executive, financial or accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel 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: (i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; (ii) Securities for whose payment or
redemption money in the necessary amount has 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 Paying Agent on
its own behalf) for the Holders of such Securities; PROVIDED, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Securities that have been paid pursuant to Section 306,
converted into Common Stock pursuant to Section 1301, 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 Company upon the
Securities or any Affiliate of the Company controlled by the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such
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request, demand, authorization, direction, notice, consent or waiver, 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 controlled by the Company.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"PERSON" means any individual, corporation, 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 306 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.
"PREFERRED SECURITIES" has the meaning specified in the Recitals to this
instrument.
"PREFERRED STOCK" means the Company's Preferred Stock, $.01 per share par
value.
"PROPERTY TRUSTEE" has the meaning specified in the Recitals of this
instrument.
"PURCHASE AGREEMENT" has the meaning specified in the Recitals to this
instrument.
"PURCHASED SHARES" has the meaning specified in Section 1303 (e) .
"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.
"REDEMPTION TAX OPINION" has the meaning set forth in the Declaration.
"REFERENCE DATE" has the meaning specified in Section 1303 (c).
"REGISTRABLE SECURITIES" has the meaning specified in Section 1007.
"REGISTRATION DEFAULT" has the meaning specified in Section 1007.
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in Section 1007.
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"REGULAR RECORD DATE" has the meaning specified in Section 301.
"REGULAR TRUSTEES" has the meaning specified in the Declaration.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section 202.
"SECURITIES" has the meaning specified in the Recitals to this instrument.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 305(a).
"SENIOR INDEBTEDNESS" means in respect of the Company (i) the principal,
premium, if any, and interest in respect of (A) indebtedness of such obligor for
money borrowed and (B) indebtedness evidenced by securities, debentures, bonds,
notes or other similar instruments issued by such obligor or credit facilities
with lending institutions or commercial lenders, (ii) all capital lease
obligations of such obligor, (iii) all obligations of such obligor issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) commitment or standby fees due and
payable to lending institutions with respect to credit facilities available to
the Company, (vi) obligations under interest rate and currency swaps, floors,
caps and other arrangements intended to fix interest rate obligations; (vii) all
obligations of the type referred to in clauses (i) through (vi) above of other
persons for the payment of which such obligor is responsible or liable as
obligor, guarantor or otherwise, and (viii) all obligations of the type referred
to in clauses (i) through (vii) above of other persons secured by any lien on
any property or asset of such obligor (whether or not such obligation is assumed
by such obligor), except for (1) the Securities, (2) any such indebtedness that
is by its terms subordinated to or PARI PASSU with the Securities and (3) any
indebtedness between or among such obligor or its affiliates, including all
other debt securities and guarantees in respect of those debt securities issued
to any other trust, or a trustee of such trust, partnership, or other entity
affiliated with the Company that is, directly or indirectly, a financing vehicle
of the Company (a "Financing Entity") in connection with the issuance by such
Financing Entity of preferred securities or other securities which rank PARI
PASSU with, or junior to, the Preferred
-8-
Securities. Such Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of such
Senior Indebtedness.
"SHELF REGISTRATION STATEMENT" has the meaning specified in Section 1007.
"SIGNIFICANT SUBSIDIARY" has the meaning specified in Rule 1-02(w) of
Regulation S-X under the Securities Act of 1933.
"SPECIAL EVENT" has the meaning specified in the Declaration.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"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, together with any accrued and unpaid
interest (including Compounded Interest), of such Security or such installment
of interest is due and payable.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"TAX EVENT" has the meaning specified in the Declaration.
"TRADING DAY" has the meaning specified in Section 1307(h).
"TRUST" has the meaning specified in the Recitals to this instrument.
"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.
"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.
"TRUST SECURITIES" means Common Securities and Preferred Securities.
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"VICE PRESIDENT," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"VOTING STOCK" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company 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 or
reasonably requested by the Trustee in connection with such application or
request. 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
applicable requirements of the Trust Indenture Act and any other applicable
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
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, 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 104. ACTS OF HOLDERS; RECORD DATES.
(a) 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 an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the 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 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by 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 or the Company, as the case may be, deems
or deem sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Outstanding Securities entitled to give, make 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
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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 701) 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.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other 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 thereof 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.
(f) Without limiting the foregoing, a Holder entitled hereunder to give or
take any such action 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 105. NOTICES, ETC., TO TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any 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 Trust
Administration, or
(2) 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 its principal offices specified in the first paragraph of this instrument or
at any other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. 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 in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at such Holder's address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the
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earliest date (if any), prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Any notice when mailed to a Holder in the aforesaid manner shall be
conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall be
filed with the Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of 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 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, 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 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. 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 111. 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 Preferred
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Securities (to the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption 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 or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day (except that, if such Business Day
is in the next succeeding calendar year, such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, shall be the immediately preceding
Business Day) with the same force and effect as if made on the Interest Payment
Date or Redemption 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 or Stated Maturity, as the
case may be.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication shall be
substantially in the form of Exhibit A which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). The Company
shall furnish any such legend not contained in Exhibit A to the Trustee in
writing. Each Security shall be dated the date of its authentication. The
terms and provisions of the Securities set forth in Exhibit A are part of the
terms of this Indenture and to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
The definitive Securities shall be typewritten or 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
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be listed, all as determined by the officers executing such Securities,
as evidenced by their execution of such Securities.
SECTION 202. INITIAL ISSUANCE TO PROPERTY TRUSTEE.
The Securities initially issued to the Property Trustee of the Trust shall
be in the form of one or more individual certificates in definitive, fully
registered form without distribution coupons and shall bear the following legend
(the "Restricted Securities Legend") unless the Company determines otherwise in
accordance with applicable law:
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS THREE YEARS AFTER (OR SUCH SHORTER PERIOD UNDER
RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR RULE) THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH VANSTAR CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE")
ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT
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TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is limited to the sum of (a) $180,412,350 and (b)
such aggregate principal amount (which may not exceed $207,474,200 aggregate
principal amount) of Securities, if any, as shall be purchased by the Trust
pursuant to an over-allotment option in accordance with the terms and provisions
of the Purchase Agreement except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 304, 305, 306, 906, 1108 or 1301.
The Securities shall be known and designated as the "6 3/4% Convertible
Subordinated Debentures due 2016" of the Company. Their Stated Maturity shall
be October 1, 2016, and they shall bear interest at the rate of 6 3/4% per
annum, from October 2, 1996 or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for, as the case
may be, payable quarterly (subject to deferral as set forth herein), in arrears,
on January 1, April 1, July 1 and October 1 (each an "Interest Payment Date") of
each year, commencing January 1, 1997 until the principal thereof is paid or
made available for payment, and they shall be paid to the Person in whose name
the Security is registered at the close of business on the regular record date
for such interest installment, which shall be the close of business on the
Business Day immediately preceding such Interest Payment Date; PROVIDED,
HOWEVER, that for so long as the Securities are held by the Trust or the
Property Trustee of the Trust, if any Preferred Securities (or if the Trust is
liquidated in connection with a Special Event, any Securities) are held in
certificated form, the Record Date for each Interest Payment Date shall be 15
days prior to such Interest Payment Date (in each case, a "Regular Record
Date"). Interest will compound quarterly and will accrue at the rate of 6 3/4%
per annum on any interest installment in arrears for more than one quarter or
during an extension of an interest payment period as set forth in Section 312
hereof.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter than a full
quarterly period for which interest is computed
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will be computed on the basis of the actual number of days elapsed. In the
event that any date on which interest is payable on the Securities is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
If at any time while the Property Trustee is the Holder of any Securities,
the Trust or the Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional interest ("Additional Interest")
on the Securities held by the Property Trustee, such amounts as shall be
required so that the net amounts received and retained by the Trust and the
Property Trustee after paying any such taxes, duties, assessments or other
governmental charges will be not less than the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other governmental charges been imposed.
The principal of and interest on the Securities shall be payable at the
office or agency in the United States maintained by the Company for such purpose
and at any other office or agency maintained by the Company for such purpose in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; PROVIDED, HOWEVER, that
unless the Securities are held by the Trust or any successor permissible under
the Declaration, at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Securities shall be redeemable as provided in Article Eleven hereof.
The Securities shall be convertible as provided in Article Thirteen hereof.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $50 and integral multiples thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATE.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries or its Treasurer or one of its
Assistant Treasurers. The signature of any of these officers on the Securities
may be manual or facsimile.
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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 Company's Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such
Company's Order shall authenticate and make available for delivery such
Securities as provided in this Indenture, and not otherwise.
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
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may execute,
and upon receipt of an Company's 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.
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 1002, 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 make
available for delivery in exchange therefor a like principal amount of
definitive Securities 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 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) GENERAL.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Security
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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.
Upon surrender for registration of transfer of any Security at an office or
agency of the Company designated pursuant to Section 1002 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
any authorized denominations 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 such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
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
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1108 or 1301 not involving any transfer.
The Company shall not be required (i) in the case of a partial redemption
of the Securities, to 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 1104 and ending at the close of business on the day of such
mailing, or (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
(b) TRANSFER PROCEDURES AND RESTRICTIONS.
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The Securities may not be transferred except in compliance with the
Restricted Securities Legend unless otherwise determined by the Company in
accordance with applicable law. Upon any distribution of the Securities to the
holders of the Preferred Securities in accordance with the Declaration, the
Company and the Trustee shall enter into a supplemental indenture pursuant to
Section 901(f) to provide for transfer procedures and restrictions with respect
to the Securities substantially similar to those contained in the Declaration to
the extent applicable in the circumstances existing at the time of such
distribution.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new 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 new 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 new Security, pay such Security.
Upon the issuance of any new 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 new 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 of the Holders with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
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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, subject to any right to defer the
payment of Interest hereunder.
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:
(1) 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).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, 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
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carry the rights to interest accrued and unpaid, and to accrue (including in
each such case Compounded Interest), 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. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable, and the Company shall
not make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest (including Additional Interest,
Compounded Interest and Liquidated Damages) on the Securities being converted,
which shall be deemed to be paid in full.
SECTION 308. 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 (subject to
Section 307) interest (including Additional Interest, Compounded Interest and
Liquidated Damages) 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 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or 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 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 an Company's
Order; PROVIDED, HOWEVER, that the Trustee shall not be required to destroy the
certificates representing such canceled Securities.
SECTION 310. RIGHT OF SET OFF.
Notwithstanding anything to the contrary in this Indenture, the Company
shall have the right to set off any payment it is otherwise required to make
hereunder to the extent the
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Company has theretofore made, or is concurrently on the date of such payment
making, a payment under the Guarantee.
SECTION 311. CUSIP NUMBERS.
The Company, as Company, in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
SECTION 312. OPTION TO EXTEND INTEREST PAYMENT PERIOD.
(a) The Company shall have the right at any time during the term of the
Securities to defer interest payments from time to time by extending the
interest payment period for successive periods (each, an "Extension Period") not
exceeding 20 consecutive quarters for each such period; PROVIDED, no Extension
Period may extend beyond the maturity date of the Securities. At the end of
each Extension Period, the Company shall be responsible for the payment of, and
the Company shall pay all interest then accrued and unpaid (including Additional
Interest and Liquidated Damages) together with interest thereon compounded
quarterly at the rate specified for the Securities to the extent permitted by
applicable law ("Compounded Interest"); PROVIDED, that during any Extension
Period, the Company shall not, and shall not allow any of its Subsidiaries
(other than, with respect to clause (i) below only, its wholly-owned
Subsidiaries) to, (i) declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock (except for (1) dividends or distributions
in shares of Common Stock on Common Stock or on the Preferred Stock, (2)
purchases or acquisitions of shares of Common Stock made in connection with any
employee benefit plan of the Company or its subsidiaries in the ordinary course
of business or pursuant to employment agreements with officers or employees of
the Company or its subsidiaries entered into in the ordinary course of business,
provided that such repurchases by the Company made from officers or employees of
the Company or its subsidiaries pursuant to employment agreements shall be made
at a price not to exceed the market value on the date of any such repurchase and
shall not exceed $1 million in the aggregate for all such employees and
officers, (3) conversions or exchanges of shares of common stock of any one
class into shares of common stock of another class or (4) purchases of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of any of the Company's securities being
converted or exchanged), (ii) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem, any debt securities issued
by the Company that rank junior to or PARI PASSU with the Securities and
(iii) make any guarantee payments with respect to the foregoing. Prior to the
termination of any such Extension Period, the Company may further extend such
Extension Period; PROVIDED, that such Extension Period together with all
previous and further extensions thereof may not exceed
-23-
20 consecutive quarters and may not extend beyond the maturity of the
Securities. Upon the termination of any Extension Period and the payment of
all amounts then due, the Company may commence a new Extension Period,
subject to the above requirements. No interest during an Extension Period,
except at the end thereof, shall be due and payable.
(b) If the Property Trustee is the sole Holder of the Securities at the
time the Company selects an Extension Period, the Company shall give written
notice to the Regular Trustees, the Property Trustee and the Trustee of its
selection of such Extension Period at least one Business Day prior to the
earlier of (i) the date the distributions on the Preferred Securities are
payable or (ii) if the Preferred Securities are listed on the New York Stock
Exchange, Inc. ("NYSE") or other stock exchange or quotation system, the date
the Trust is required to give notice to the NYSE or other applicable self-
regulatory organization or to holders of the Preferred Securities of the record
date or the date such distributions are payable, but in any event not less than
ten Business Days prior to such record date.
(c) The Trustee shall promptly give notice of the Company's selection of
such Extension Period to the holders of the Preferred Securities. If the
Property Trustee is not the sole Holder at the time the Company selects an
Extension Period, the Company shall give the Holders and the Trustee written
notice of its selection of such Extension Period at least ten Business Days
prior to the earlier of (i) the next succeeding Interest Payment Date or (ii) if
the Preferred Securities are listed on the NYSE or other stock exchange or
quotation system, the date the Company is required to give notice to the NYSE or
other applicable self-regulatory organization or to Holders of the Securities on
the record or payment date of such related interest payment, but in any event
not less than two Business Days prior to such record date.
(d) The quarter in which any notice is given pursuant to paragraphs (b)
and (c) hereof shall be counted as one of the 20 quarters permitted in the
maximum Extension Period permitted under paragraph (a) hereof.
SECTION 313. PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.
The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or, with the consent of the Trust, Conversion Agent without prior
notice. The Company or any of its Affiliates may act in any such capacity.
SECTION 314. GLOBAL SECURITY.
(a) In connection with a Dissolution Event,
(i) the Securities in certificated form (other than as set forth in
clause (ii) below) may be presented to the Trustee by the Property Trustee in
exchange for a global Security in an aggregate principal amount equal to the
aggregate principal amount of all Outstanding Securities (a "Global Security"),
to be registered in the name of the Depositary, or
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its nominee, and delivered by the Trustee to the Depositary for crediting to
the accounts of its participants pursuant to the instructions of the Regular
Trustees. The Company upon any such presentation shall execute a Global
Security in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with this Indenture.
Payments on the Securities issued as a Global Security will be made to the
Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Securities in non book-entry certificated form may be
presented to the Trustee by the Property Trustee and any certificate which
represents Preferred Securities (a "Preferred Security Certificate") other than
Preferred Securities held by the Depositary or its nominee ("Non Book-Entry
Preferred Securities") will be deemed to represent beneficial interests in
Securities presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such Preferred Security Certificates are presented to
the Security Registrar for transfer or reissuance at which time such Preferred
Security Certificates will be canceled and a Security, registered in the name of
the holder of the Preferred Security Certificate or the transferee of the holder
of such Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate canceled, will be executed by the Company and delivered to
the Trustee for authentication and delivery in accordance with this Indenture.
On issue of such Securities, Securities with an equivalent aggregate principal
amount that were presented by the Property Trustee to the Trustee will be deemed
to have been canceled.
(b) If (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the Depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) the Company, in its sole
discretion, determine that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Event of Default with respect to such
Securities, as the case may be, the Company will execute, and, subject to
Article Three of this Indenture, the Trustee, upon written notice from the
Company and receipt of an Company's Order, will authenticate and deliver the
Securities in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security. In
addition, upon an Event of Default or if the Company shall at any time determine
that the Securities shall no longer be represented by a Global Security, the
Company will execute, and subject to Section 305 of this Indenture, the Trustee,
upon receipt of an Officers' Certificate evidencing such determination by the
Company, will authenticate and make available for delivery the Securities in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security in exchange for such Global Security. Upon the exchange of the Global
Security for such Securities in definitive registered form without coupons, in
authorized denominations, the Global Security shall be canceled by the Trustee.
Such Securities in definitive registered form issued in exchange for the Global
Security shall be registered in such names and in such
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authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Securities to the Depositary for delivery to
the Persons in whose names such Securities are so registered.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of the
Company and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) 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 306 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 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation have become due and payable, and the Company has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest (including Compounded Interest and Liquidated Damages) 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;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that, in their opinion, 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
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
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SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 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 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 interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 401 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted shall be returned to
the Company promptly following such conversion or, if sooner, upon receipt of an
Company's Request.
ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure for 30 days to pay interest on the Securities, including
any Additional Interest, Compounded Interest and Liquidated Damages in respect
thereof, when due; PROVIDED that a valid extension of an interest payment period
will not constitute a default in the payment of interest (including any
Additional Interest, Compounded Interest or Liquidated Damages) for this
purpose;
(2) failure to pay principal of or premium, if any, on the Securities
when due whether at maturity, upon redemption, by declaration or otherwise;
(3) failure by the Company to deliver shares of its Common Stock upon
an election by a holder of Preferred Securities to convert such Preferred
Securities;
(4) failure to observe or perform in all material respects any other
covenant contained in the Indenture for 60 days after notice to the Company by
the Trustee or by the Holders of not less than 25% in aggregate Outstanding
principal amount of the Securities;
(5) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization
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or other similar law or (B) a decree or order adjudging the Company or any of
its Significant Subsidiaries a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or its Significant Subsidiary, as
the case may be, under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or its Significant Subsidiary, as the case
may be, or of substantially all of the property of the Company or its
Significant Subsidiary, as the case may be, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days;
(6) the commencement by the Company or any of its Significant
Subsidiaries of a voluntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any of its Significant Subsidiaries to the entry of a
decree or order for relief in respect of itself in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company or its Significant Subsidiary,
as the case may be, or the filing by the Company or any of its Significant
Subsidiaries of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by the Company or any
of its Significant Subsidiaries to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or its
Significant Subsidiary, as the case may be, or of substantially all of the
property of Company, or the making by the Company or any of its Significant
Subsidiaries of a general assignment for the benefit of creditors, or the
admission by the Company or any of its Significant Subsidiaries in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Company or any of its Significant Subsidiaries in
furtherance of any such action;
(7) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution of
Securities to holders of Preferred Securities in liquidation of the Trust upon
the redemption of all of the outstanding Preferred Securities of the Trust or
(ii) certain mergers, consolidations or amalgamations, each as permitted by the
Declaration; or
(8) DEFAULT UNDER ANY BOND, DEBENTURE OR ANY OTHER EVIDENCE OF
INDEBTEDNESS FOR MONEY BORROWED BY THE COMPANY OR ANY OF ITS SIGNIFICANT
SUBSIDIARIES HAVING AN AGGREGATE OUTSTANDING PRINCIPAL AMOUNT IN EXCESS OF $20
MILLION, WHICH DEFAULT SHALL HAVE RESULTED IN SUCH INDEBTEDNESS BEING
ACCELERATED, OR FAILURE TO PAY WHEN DUE (BEYOND ANY APPLICABLE GRACE PERIODS)
ANY SUCH INDEBTEDNESS, WITHOUT SUCH INDEBTEDNESS BEING DISCHARGED, SUCH
ACCELERATION HAVING BEEN RESCINDED OR ANNULLED OR SUCH FAILURE TO PAY HAVING
BEEN CURED OR WAIVED, WITHIN 30 DAYS AFTER RECEIPT OF NOTICE THEREOF BY THE
COMPANY FROM THE TRUSTEE OR BY THE COMPANY
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AND THE TRUSTEE FROM THE HOLDERS OF NOT LESS THAN 25% IN AGGREGATE OUTSTANDING
PRINCIPAL AMOUNT OF THE SECURITIES.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities, all
accrued interest thereon and any other amounts payable hereunder 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, all accrued
interest and such other amounts shall become immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as provided in this Article hereinafter, the Holders of a majority
in aggregate 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:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional Interest,
Compounded Interest and Liquidated Damages) on all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest thereon at the
rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of and/or interest on and/or all other amounts in respect of
Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
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(1) default is made in the payment of any interest (including any
Additional Interest or Compounded Interest) on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of 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 interest (including any Additional Payments and
Liquidated Damages) and, to the extent that payment thereof shall be legally
enforceable, interest on any overdue principal and on any overdue interest
(including any Additional Payments and Liquidated Damages), 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,
its agents and counsel.
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 504. 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 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 for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
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.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
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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 and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. 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 interest
(including any Additional Payments and Liquidated Damages), 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 the payment of all amounts due the Trustee under Section 607;
and
SECOND: To the payment of the amounts then due and unpaid for principal
of and interest (including any Additional Payments and Liquidated Damages) 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 interest
(including any Compounded Interest), respectively.
SECTION 507. 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
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) if the Trust is not the sole holder of the Outstanding
Securities, the Holders of at least 25% in aggregate 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;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding 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 itself 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 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
AND 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 (subject to Section 307) interest (including any
Additional Payments and Liquidated Damages) on such Security on the Stated
Maturity expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to convert such Security in accordance with
Article Thirteen 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 509. 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 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, 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.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
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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 512. 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
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
Subject to Section 902 hereof, the Holders of greater than 50% 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
(1) in the payment of the principal of, premium, if any, or interest
(including any Additional Payments and Liquidated Damages) on any Security
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest (including any Additional Payments and Liquidated
Damages) and principal due otherwise than by acceleration has been deposited
with the Trustee); or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected; PROVIDED, HOWEVER, that if the Securities
are held by the Trust or a trustee of the Trust, such waiver shall not be
effective until the holders of greater than 50% in liquidation amount of Trust
Securities shall have consented to such waiver; PROVIDED, FURTHER, that if the
consent of the Holder of each Outstanding Security is required, such waiver
shall not be effective until each holder of the Trust Securities shall have
consented to such waiver.
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 514. UNDERTAKING FOR COSTS.
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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, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or the Trustee or in
any suit for the enforcement of the right to receive the principal of and
interest (including any Additional Payments) on any Security or to convert any
Security in accordance with Article Thirteen.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 516. ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES.
Notwithstanding the foregoing, if an Indenture Event of Default has
occurred and is continuing and such Event of Default is attributable to the
failure of the Company to pay interest or principal on the Securities on the
date such interest or principal is otherwise payable, the Company acknowledges
that, in such event, a holder of Preferred Securities may institute a Direct
Action for payment on or after the respective due date specified in the
Securities. The Company may not amend the Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of all the
holders of Preferred Securities. Notwithstanding any payment made to such
holder of Preferred Securities by the Company in connection with a Direct
Action, the Company shall remain obligated to pay the principal of or interest
on the Securities held by the Trust or the Property Trustee and the Company
shall be subrogated to the rights of the holders of such Preferred Securities
with respect to payments on the Preferred Securities to the extent of any
payments made by the Company to any such holders in any Direct Action. Except
as set forth elsewhere herein or in the Declaration, the holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the Holders.
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ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, 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 against such risk or liability is not reasonably assured
to it. 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.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; PROVIDED, however,
that in the case of any default of the character specified in Section 501(4),
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. 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 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, 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;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Company's Request or Company's Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
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(d) the Trustee may consult with counsel of its choice and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, 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 reasonable examination of the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith, without negligence or willful
misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities. The Trustee shall not be accountable
for the use or application by the Company of the Securities or the proceeds
thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, 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 608 and 613, may otherwise
deal with the Company or any Affiliate thereof with the same rights it would
have if it were not Trustee, Paying Agent, Security Registrar, or such other
agent.
SECTION 606. MONEY HELD IN TRUST.
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Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder;
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, fees, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any loss, liability, claim, action, suit, cost,
damage or reasonable expense, including taxes (other than taxes based on the
income of the Trustee), incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(6) or Section 501(7), the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency
or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. 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 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has (or has an
affiliate that has) its Corporate Trust Office in ▇▇▇ ▇▇▇▇,
-▇▇-
▇▇▇ ▇▇▇▇. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of its federal, state, District of
Columbia or territorial 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 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee shall
not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the removed Trustee may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i) the
Company by Board Resolution may remove the Trustee, or (ii) subject to
Section 514, 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.
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(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, 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.
(f) 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 106. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. 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; PROVIDED, that 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 required to more fully and certainly vest in and confirm 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 612. 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
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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.
SECTION 613. 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).
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSEES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) quarterly, within one Business Day prior to January 1, April 1,
July 1 and October 1 of each year, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of a date
not more than 15 days prior to the delivery thereof, and
(b) 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;
EXCLUDING from any such list names and addresses received by the Trustee in
its capacity as Security Registrar and PROVIDED that the Company shall not be
obligated to provide a list of Holders at any time such list of Holders does
not differ from the most recent list of Holders given to the Trustee by the
Company or the Securities are represented by one or more Global Securities.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) 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 701 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 701 upon receipt of a new list so furnished.
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(b) 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.
(c) 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 this Indenture.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after October 15 of each year, commencing October
15, 1996, the Trustee shall transmit by mail to the Holders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such transmission
to the 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 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and transmit
to the 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.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of their covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
The Company shall also provide to the Trustee on a timely basis such
information as the Trustee requires to enable the Trustee to prepare and file
any form required to be submitted by the Company with the Internal Revenue
Service and the holders of the Preferred Securities relating to original
issue discount, including, without limitation, Form 1099-OID or any successor
form.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge with or into any other
Person or, directly or indirectly, convey, transfer or lease all or
substantially all its assets substantially as an entirety to any Person,
unless:
(a) the Person formed by such consolidation or into which the Company
is merged (if the Company is not the survivor) or the Person which acquires
by conveyance, transfer or lease, all or substantially all the Company's
assets substantially as an entirety shall be a corporation, 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 reasonably 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 Article Thirteen;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that, in their opinion, 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.
This Section shall only apply to (i) a merger or consolidation in which
the Company is not the surviving corporation, and (ii) to conveyances, leases
and transfers by the Company as transferor or lessor.
SECTION 802. 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 all or
substantially all the Company's assets substantially as an entirety in
accordance with Section 801, 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 the predecessor Person shall be relieved
of all obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
SECTION 901. 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:
(a) 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
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(c) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Article Thirteen; or
(d) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, 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;
(e) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(f) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any, to
be placed on Securities, and all other matters required pursuant to Section
305(b) or otherwise necessary, desirable or appropriate in connection with
the issuance of Securities to holders of Preferred Securities in the event of
a distribution of Securities by the Trust if a Special Event occurs and is
continuing.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of greater than 50% in principal amount
of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture; PROVIDED, however,
that no such supplemental indenture shall, without the consent of the Holder
of each Outstanding Security affected thereby,
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(a) extend the Stated Maturity of the principal of, or any installment
of interest (including any Additional Payments or Liquidated Damages) on, any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon (including any Additional
Payments or Liquidated Damages), or reduce any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Security 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 Thirteen (except as permitted by Section 901(c)) or
modify the provisions of Article Twelve with respect to the subordination of
the Notes in a manner adverse to the Holders in any material respect,
(b) 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
(c) modify any of the provisions of this Section or Section 513, 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; PROVIDED that if the
Securities are held by the Trust or a trustee of the Trust, such supplemental
indenture shall not be effective until the holders of greater than 50% in
liquidation amount of Trust Securities shall have consented to such
supplemental indenture; PROVIDED, further, that if the consent of the Holder
of each Outstanding Security is required, such supplemental indenture shall
not be effective as to a given holder of Trust Securities of the Trust until
such holder of the Trust Securities of the Trust shall have consented to such
supplemental indenture.
Notwithstanding the foregoing, the Company may not amend the Indenture
to remove the rights of holders of Preferred Securities to institute a Direct
Action pursuant to Section 516 without the consent of each Holder of
Preferred Securities.
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.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; PROVIDED that unless such
consent shall have become effective by virtue of the requisite percentage
having been obtained prior to the date which is 90 days after such record
date, any such consent previously given shall automatically and without
further action by any Holder be canceled and of no further effect.
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SECTION 903. 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 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
SECTION 904. 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 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act; PROVIDED, that this
requirement shall not constitute an admission or acknowledgment by any party
hereto that any qualification is required prior to the time this Indenture
and the Trustee are required by the Trust Indenture Act to be so qualified.
SECTION 906. 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 authenticated and delivered by the Trustee in
exchange for Outstanding Securities. Failure to undertake the foregoing
shall have no effect on such supplemental indenture.
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
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The Company will duly and punctually pay the principal of and interest
(including any Additional Payments and Liquidated Damages) on the Securities
in accordance with the terms of the Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in The City of New York an office or agency
where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange 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 appoint 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 (in the United States) 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 obligations to
maintain an office or agency in the United States 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 1003. 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 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 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 their
action or failure so to act.
Whenever the Company shall have one or more Paying Agents other than the
Company, the Company will, prior to each due date of the principal of or
interest on any Securities, deposit with a Paying Agent a sum sufficient to
pay such amount, 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 such action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture
Act applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the
making of any payment
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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 as
such.
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 the Company's 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 terms 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 or interest on
any Security and remaining unclaimed for two years after such principal or
interest has become due and payable shall be paid to the Company upon the
Company's Request, or (if then held by the Company) shall be discharged from
such trust; and the Holder of any such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof,
unless an abandoned property law designates another person, 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.
SECTION 1004. 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 material 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.
SECTION 1005. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES;
COVENANTS AS TO THE TRUST.
(a) The Company covenants that so long as the Securities are
Outstanding, if (i) there shall have occurred and be continuing any event
that with the giving of notice or the lapse of time or both, would constitute
an Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the Guarantee, or (iii) the Company has
exercised its option to defer interest payments on the Securities by
extending the interest payment period and such period, or any extension
thereof, shall be continuing, then the Company shall not, and shall not allow
any of its Subsidiaries (other than, with respect to clause (x) below only,
its wholly-owned Subsidiaries) to, (x) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (except for (i)
dividends or distributions in shares of Common Stock on Common Stock or on
the Preferred Stock, (ii) purchases or acquisitions of
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shares of Common Stock made in connection with any employee benefit plan of
the Company or its subsidiaries in the ordinary course of business or
pursuant to employment agreements with officers or employees of the Company
or its subsidiaries entered into in the ordinary course of business, provided
that such repurchases by the Company made from officers or employees of the
Company or its subsidiaries pursuant to employment agreements shall be made
at a price not to exceed the market value on the date of any such repurchase
and shall not exceed $1 million in the aggregate for all such employees and
officers, (iii) conversions or exchanges of shares of Common Stock of one
class into shares of Common Stock of another class or (iv) purchases of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of any of the Company's securities being
converted or exchanged), (y) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank junior to or PARI PASSU with the Securities (except
by conversion into or exchange for shares of its capital stock), and (z) make
any guarantee payments with respect to the foregoing (other than such
payments made pursuant to the Guarantee).
(b) The Company also covenants and agrees (i) that it shall directly
or indirectly maintain 100% ownership of the Common Securities of the Trust;
PROVIDED, HOWEVER, that any permitted successor of the Company hereunder may
succeed to the Company's ownership of such Common Securities (ii) NOT TO
CAUSE OR PERMIT THE DISSOLUTION, WINDING-UP OR TERMINATION OF THE TRUST,
EXCEPT IN CONNECTION WITH A DISTRIBUTION OF THE SECURITIES TO THE HOLDERS OF
PREFERRED SECURITIES IN LIQUIDATION OF THE TRUST OR IN CONNECTION WITH
CERTAIN MERGERS, CONSOLIDATIONS OR AMALGAMATIONS PERMITTED BY THE DECLARATION
AND (iii) that it shall use its reasonable efforts, consistent with the terms
and provisions of the Declaration, to cause the Trust (x) to remain a
statutory business trust, except in connection with the distribution of the
Securities to the holders of Trust Securities in liquidation of the Trust,
the redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (y) to otherwise continue to be classified as a grantor
trust for United States Federal income tax purposes.
SECTION 1006. PAYMENT OF EXPENSES OF THE TRUST.
In connection with the offering, sale and issuance of the Securities to
the Property Trustee in connection with the sale of the Trust Securities by
the Trust, the Company shall be responsible for the payment of:
(a) all costs, fees and expenses relating to the offering, sale and
issuance of the Securities, including commissions to the Initial Purchasers
payable pursuant to the Purchase Agreement and compensation of the Trustee
under the Indenture in accordance with the provisions of Section 607 of the
Indenture;
(b) all debts and obligations (other than with respect to the Trust
Securities) of the Trust, all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities
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(including commissions to the Initial Purchasers in connection therewith),
the fees and expenses of the Property Trustee and the Delaware Trustee
(including the payment of counsel fees and expenses), the costs and expenses
relating to the operation of the Trust, including without limitation, costs
and expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing and disposition of
Trust assets); and
(c) all taxes (other than United States withholding taxes attributable
to the Trust or its assets) and all liabilities, costs and expenses with
respect to such taxes of the Trust.
SECTION 1007. REGISTRATION RIGHTS.
The holders of the Preferred Securities, the Securities, the Guarantee
and the shares of Common Stock of the Company issuable upon conversion of the
Securities (collectively, the "Registrable Securities") are entitled to the
benefits of a Registration Rights Agreement, dated as of October 2, 1996,
among the Company and the Initial Purchasers (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement, the Company has
agreed for the benefit of the holders of Registrable Securities that (i) it
will, at its cost, within 75 calendar days after the date of issuance of the
Preferred Securities, file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to the resales of
the Registrable Securities, (ii) it will use reasonable efforts to cause such
Shelf Registration Statement to be declared effective by the Commission
within 135 calendar days after the date of issuance of the Registrable
Securities and (iii) the Company will use reasonable efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act
until the third anniversary of the effectiveness of the Shelf Registration
Statement or such earlier date as is provided in the Registration Rights
Agreement (the "Effectiveness Period"). Reference is made to the Registration
Rights Agreement for a description of, among other things, the circumstances
under which a "Registration Default" may be declared if such Shelf
Registration Statement is not filed or declared effective within the
specified periods of time, and additional interest "Liquidated Damages" may
accrue and by payable on the Securities as a result of such a Registration
Default, which provisions are hereby incorporated herein by such reference.
SECTION 1008. RULE 144A INFORMATION REQUIREMENT.
During the period beginning on the latest date of the original issuance
of the Securities and ending on Resale Restriction Termination Date (as
defined in the legend set forth in Section 202), the Company covenants and
agrees that it shall, during any period in which it is not subject to Section
13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Securities or any Common Stock issued upon conversion
thereof which continue to be restricted securities in connection with any
sale thereof and any prospective purchaser of Securities or such Common Stock
from such holder or beneficial holder, the information required pursuant to
Rule 144A(d)(4) under the Securities Act upon the request of
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any holder or beneficial holder of the Securities or such Common Stock and it
will take such further action as any holder or beneficial holder of such
Securities or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder to sell
its Securities or Common Stock without registration under the Securities Act
within the limitation of the exemption provided by Rule 144A, as such Rule
may be amended from time to time. Upon the request of any holder or any
beneficial holder of the Securities or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.
SECTION 1009. LISTING THE SECURITIES.
In the event that the Securities are distributed to the holders of
Preferred Securities, the Company will use its best efforts to list the
Securities on the NYSE or on such other national securities exchange or
automated quotation system on which the Preferred Securities are then listed
or quoted.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. RIGHT OF REDEMPTION.
(a) The Securities may be redeemed at the election of the Company, in
whole or in part, at any time or from time to time after October 5, 1999, at
the Redemption Prices set forth in Section 1109 below upon not less than 30
or more than 60 days' notice. The Company may not redeem fewer than all of
the outstanding Securities unless all accrued and unpaid Distributions have
been paid on all Securities for all quarterly Distribution periods
terminating on or before the date of redemption. The Trust may not redeem
fewer than all the outstanding Securities unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly Distribution
periods terminating on or before the date of redemption.
(b) As set forth more fully in Section 1110 below, the Securities may
also be redeemed, in whole (but not in part), at the election of the Company
at any time within 90 days following the occurrence of a Tax Event (in whole
but not in part); PROVIDED, HOWEVER, that if, at the time there is available
to the Company or the Trust the opportunity to eliminate, within such 90-day
period, the Tax Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable
measure, which in the sole judgment of the Company has or will cause no
adverse effect on the Trust, the holders of the Trust Securities or the
Company or will involve no material cost, then the Company or the Trust shall
pursue such measure in lieu of redemption.
SECTION 1102. APPLICABILITY OF ARTICLE.
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Redemption of Securities at the election of the Company, as permitted by
Section 1101, shall be made in accordance with such provision and this
Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem Securities pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, at least 30 days and no more
than 60 days prior to the Redemption Date fixed by the Company, notify the
Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed and provide a copy of the notice of redemption
given to Holders of Securities to be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to $50
or any integral multiple thereof) of the principal amount of the Securities.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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 1105. 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 each Holder of Securities to be redeemed, at such
Holder's address appearing in the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including, if relevant, the CUSIP or ISIN number) and shall state:
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(a) the Redemption Date,
(b) the Redemption Price,
(c) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest thereon
will cease to accrue on and after said date, and
(d) 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 1106. DEPOSIT OF REDEMPTION PRICE.
On or prior to 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 1003) an
amount of money 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 which are to be redeemed on that 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 307) be paid to the Company upon the
Company's Request or, if then held by the Company, shall be discharged from
such trust.
SECTION 1107. 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 interest (including Additional Payments and Liquidated Damages, if
any) 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 the terms and the provisions of Section 307.
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If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.
SECTION 1108. SECURITIES REDEEMED IN PART.
In the event of any redemption in part, 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 any
selection for redemption of Securities and ending at the close of business on
the earliest date on which the relevant notice of redemption is deemed to
have been given to all holders of Securities to be so redeemed and (ii)
register the transfer of or exchange any Securities so selected for
redemption, in whole or in part, except for the unredeemed portion of any
Securities being redeemed in part.
Any Security which is to be redeemed only in part shall be surrendered
at a place of payment therefor (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 make available for delivery
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 1109. OPTIONAL REDEMPTION.
(a) The Company shall have the right to redeem the Securities, in whole
or in part, at any time or from time to time on or after October 5, 1999 upon
not less than 30 nor more than 60 days' notice, at a redemption price equal
at the following optional redemption prices (expressed as a percentage of the
principal amount of Securities) if redeemed during the 12-month period
beginning October 1 of the respective years shown below (October 5, in the
case of 1999):
Percentage of
Year Principal Year Amount
-------------------- ---------------------
1999 . . . . . . . . . . . . . . . 104.725%
2000 . . . . . . . . . . . . . . . 104.050
2001 . . . . . . . . . . . . . . . 103.375
2002 . . . . . . . . . . . . . . . 102.700
2003 . . . . . . . . . . . . . . . 102.025
2004 . . . . . . . . . . . . . . . 101.350
2005 . . . . . . . . . . . . . . . 100.675
2006 and thereafter. . . . . . . . 100.000
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plus any accrued and unpaid interest, including Additional Payments and
Liquidated Damages, if any, to the Redemption Date.
Any redemption pursuant to this Section 1109 shall be made pursuant to the
provisions of Sections 1101 through 1108 hereof.
(b) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities
are listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Securities in whole.
SECTION 1110. TAX EVENT REDEMPTION.
If a Tax Event has occurred and is continuing and:
(a) The Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution Tax Opinion
that a No Recognition Opinion cannot be delivered to the Trust,
then, notwithstanding Section 1109(a) but subject to Section 1109(b), the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of the Securities to redeem the Securities in whole
(but not in part) for cash at the redemption price that would then be
applicable in accordance with Section 1109(a) (or, in the case of the period
commencing on the date of issuance of the Securities through October 4, 1997
and the twelve month periods commencing October 5, 1997 and October 5, 1998,
the product of 106.750%, 106.075% and 105.400%, respectively, times $50), in
each case plus accrued and unpaid interest and Additional Payments and
Liquidated Damages, if any, within 90 days following the occurrence of such
Tax Event (the "90-Day Period"); PROVIDED, HOWEVER, that if, at the time
there is available to the Company or the Trust the opportunity to eliminate
within the 90-Day Period, the Tax Event by taking some ministerial action
("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which, in the sole judgment of
the Company, has or will cause no adverse effect on the Company, the Trust or
the holders of the Trust Securities and will involve no material cost, the
Company or the Trust shall pursue such Ministerial Action or other measure in
lieu of redemption, and PROVIDED, FURTHER, that the Company shall have no
right to redeem the Securities while the Trust is pursuing any Ministerial
Action. The redemption payment, including accrued and unpaid interest,
including Additional Payments, if any, shall be made prior to 12:00 noon, New
York time, on the date of such redemption or such earlier time as the Company
determine, PROVIDED, that the Company shall deposit with the Trustee an
amount sufficient to make such redemption payment by 10:00 a.m. on the date
such redemption payment is to be made.
SECTION 1111. NO SINKING FUND.
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The Securities are not entitled to the benefit of any sinking fund.
ARTICLE TWELVE
Subordination of Securities
SECTION 1201. AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each Holder of Securities by such
Holder's acceptance thereof likewise covenants and agrees, that all Securities
shall be issued subject to the provisions of this Article Twelve; and each
Holder of a Security, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions. The payment by the
Company of the principal of, premium, if any, and interest (including Additional
Payments) on all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all existing and future Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred;
provided however, that no provision of this Article Twelve shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 1202. DEFAULT ON SENIOR INDEBTEDNESS.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness continuing beyond the period of grace, if any, specified in
the instrument evidencing such Senior Indebtedness, unless and until such
default shall have been cured or waived or shall have ceased to exist, and in
the event that the maturity of any Senior Indebtedness has been accelerated
because of a default, then no payment shall be made by the Company with respect
to the principal of (including redemption payments, if any), premium, if any, or
interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 1202, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 1203. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
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Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due on, all Senior Indebtedness must be paid in full
before any payment is made on account of the principal (and premium, if any) or
interest on the Securities; and upon any such dissolution or winding up or
liquidation or reorganization, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders or the Trustee would be entitled, except for
the provisions of this Article Twelve, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders before all Senior Indebtedness is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay such Senior Indebtedness in full
in money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article Twelve, the words, "cash, property or
securities" shall not be deemed to include shares of stock 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, the payment of which
is subordinated at least to the extent provided in this Article Twelve with
respect to the Securities to the payment of all Senior Indebtedness which may at
the time be outstanding; provided, that (i) such Senior Indebtedness is assumed
by the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of such Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company
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following the conveyance, transfer or lease of all or substantially all its
properties and assets on a consolidated basis to another Person upon the
terms and conditions provided for in Article Eight hereof shall not be deemed
a dissolution, winding up, liquidation or reorganization for the purposes of
this Section 1203 if such other Person shall, as a part of such
consolidation, merger" conveyance, transfer or lease, comply with the
conditions stated in Article Eight hereof. Nothing in Section 1202 or in
this Section 1203 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 607 hereof.
SECTION 1204. SUBROGATION.
Subject to the payment in full of all Senior Indebtedness, the rights of
the Holders shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any,) and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article Twelve, and no payment over
pursuant to the provisions of this Article Twelve, to or for the benefit of the
holders of such Senior Indebtedness by Holders or the Trustee, shall, as between
the Company, its creditors other than holders of Senior Indebtedness, and the
Holders, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article
Twelve are and are intended solely for the purposes of defining the relative
rights of the Holders, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
Nothing contained in this Article Twelve or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of (and premium, if any) and interest on the Securities as
and when the same shall become due and payable in accordance with their terms,
or is intended to or shall affect the relative rights of the Holders and
creditors of the Company, as the case may be, other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Twelve of the holders of such Senior Indebtedness in respect of cash, property
or securities of the Company, as the case may be, received upon the exercise of
any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article Twelve, the Trustee, subject to the provisions of Section 603, and
the Holders, shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidation trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders,
for the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior
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Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Twelve.
SECTION 1205. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by such Holder's acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Twelve and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.
SECTION 1206. NOTICE BY THE COMPANY.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Twelve. Notwithstanding the provisions of
this Article Twelve or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provision of this Article Twelve, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 603 hereof, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section 1206 at least two Business Days prior to the
date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 603, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article Twelve, 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 right of such
Person under this Article
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Twelve, 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 1207. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Twelve in respect of any Senior Indebtedness at any
time held by it, to the same extent as any other holder of Senior Indebtedness,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are set forth in this Article Twelve, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 603, the Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall pay over or deliver to Holders,
the Company or any other Person money or assets to which any holder of such
Senior Indebtedness shall be entitled by virtue of this Article Twelve or
otherwise. With respect to the holders of Senior Indebtedness, the Trustee
undertakes ,to perform or to observe only such of its covenants or obligations
as are specifically set forth in this Article Twelve and no implied covenants or
obligations with respect to holders of Senior Indebtedness shall be read into
this Indenture against the Trustee.
SECTION 1208. SUBORDINATION MAY NOT BE IMPAIRED.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
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, without incurring
responsibility to the holders of the Securities and without impairing or
releasing the subordination provided in this Article Twelve or the obligations
hereunder of 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, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior
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Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 1209. CERTAIN CONVERSIONS DEEMED PAYMENT.
For the purposes of this Article Twelve only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with
Article Thirteen 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 (except in satisfaction of fractional shares),
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section 1209, the term "junior
securities" means (a) shares of any stock of any class of the Company, or
(b) securities of the Company which are subordinated in right of payment to 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 Twelve 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, the right, which is
absolute and unconditional, of the Holder to convert such Security in accordance
with Article Thirteen.
SECTION 1210. ARTICLE APPLICABLE TO PAYING AGENTS.
If 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 (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 the first
paragraph of Section 1207 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as paying agent.
ARTICLE THIRTEEN
Conversion of Securities
SECTION 1301. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article, the
Securities are convertible, at the option of the Holder, at any time on or
before the close of business on the Business Day immediately preceding the date
of repayment of such Securities, whether at maturity or upon redemption (either
at the option of the Company or pursuant to a Tax Event), into the number of
fully paid and nonassessable shares of Common Stock obtained by dividing $50 per
Security by the applicable conversion price (initially $28.75 per share of
Common Stock for each Security), rounded to the nearest one thousand of one
share (equivalent to conversion
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rate of 1.739 Shares per share of Common Stock per Security), subject to
adjustment as described in this Article Thirteen. A Holder may convert any
portion of the principal amount of the Securities into that number of fully
paid and nonassessable shares of Common Stock (calculated as to each
conversion to the nearest 1/1000th of a share) obtained by dividing the
principal amount of the Securities to be converted by such conversion price.
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 business on the Business Day immediately preceding the
corresponding Redemption Date, unless the Company defaults in making the
payment due upon redemption. The Company shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for
issuance upon the conversion of the Securities, free from any preemptive or
other similar rights, such number of shares of Common Stock as shall from
time to time be issuable upon the conversion of all the Securities then
outstanding.
SECTION 1302. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Securities, the Holder
thereof shall deliver to the Conversion Agent an irrevocable Notice of
Conversion setting forth the principal amount of Securities to be converted,
together with the name or names, if other than the Holder, in which the shares
of Common Stock should be issued upon conversion and, if such Securities are
definitive Securities, surrender to the Conversion Agent the Securities to be
converted, duly endorsed or assigned to the Company or in blank. In addition, a
holder of Preferred Securities may exercise its right under the Declaration to
convert such Preferred Securities into Common Stock by delivering to the
Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and directing the Conversion
Agent (i) to exchange such Preferred Security for a portion of the Securities
held by the Trust (at an exchange rate of $50 principal amount of Securities for
each Preferred Security) and (ii) to immediately convert such Securities, on
behalf of such holder, into Common Stock of the Company pursuant to this
Article Thirteen and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are Outstanding, the Trust
shall not convert any Securities except pursuant to a Notice of Conversion
delivered to the Conversion Agent by a holder of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular Record Date
and prior to the subsequent Interest Payment Date, the Holder will be entitled
to receive the interest payable on the subsequent Interest Payment Date on the
portion of Securities to be converted notwithstanding the conversion thereof
prior to such Interest Payment Date. Except as otherwise provided in the
immediately preceding sentence, in the case of any Security which is converted,
interest whose Stated Maturity is on or after the date of conversion of such
Security shall not be payable, and the Company shall not make nor be required to
make any other payment, adjustment or allowance with respect to accrued but
unpaid interest on the Securities being converted, which shall be deemed to be
paid in full. Each conversion shall be deemed to have been effected immediately
prior to the close of business on the day on which the Notice of
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Conversion was received (the "Conversion Date") by the Conversion Agent from
the Holder or from a holder of the Preferred Securities effecting a
conversion thereof pursuant to its conversion rights under the Declaration,
as the case may be. The Person or Persons entitled to receive the Common
Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock as of the Conversion Date and
such Person or Persons will cease to be a record holder or record holders of
the Securities on that date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment,
if any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Securities are convertible (together with the
cash payment, if any, in lieu of fractional shares) shall be deemed to satisfy
the Company's obligation to pay the principal amount at Maturity of the portion
of Securities so converted and any unpaid interest (including Compounded
Interest, Additional Interest and Liquidated Damages) accrued on such Securities
at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the last reported
sale price of such fractional interest on the date on which the Securities or
Preferred Securities, as the case may be, were duly surrendered to the
Conversion Agent for conversion, or, if such day is not a Trading Day, on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder or the holder of the Preferred Securities so converted.
(d) In the event of the conversion of any Security in part only, a new
Security or Securities for the unconverted portion thereof will be issued in the
name of the Holder thereof upon the cancellation of the Security converted in
part in accordance with Section 305.
(e) In effecting the conversion transactions described in this Section,
the Conversion Agent is acting as agent of the holders of Preferred Securities
(in the exchange of Preferred Securities for Securities) and as agent of the
Holders of Securities (in the conversion of Securities into Common Stock), as
the case may be, directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Securities held by the
Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article Thirteen
and (ii) to convert all or a portion of the Securities into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article Thirteen and to deliver to the Trust a new Security
or Securities for any resulting unconverted principal amount.
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(f) All shares of Common Stock delivered upon any conversion of Securities
required to bear the Restricted Securities Legend shall bear a restrictive
legend substantially in the form of the legend required to be set forth on such
Securities and shall be subject to the restrictions on transfer provided in such
legend and in Section 305(b) hereof. Neither the Trustee nor the Conversion
Agent shall have any responsibility for the inclusion or content of any such
restrictive legend on such Common Stock; PROVIDED, however, that the Trustee or
the Conversion Agent shall have provided to the Company or to the Company's
transfer agent for such Common Stock, prior to or concurrently with a request to
the Company to deliver to such Conversion Agent certificates for such Common
Stock, written notice that the Securities delivered for conversion are
Securities required to bear the Restricted Securities Legend.
SECTION 1303. CONVERSION PRICE ADJUSTMENTS.
The conversion price shall be subject to adjustment (without duplication)
from time to time as follows:
(a) In case the Company shall, while any of the Securities are
Outstanding, (i) pay a dividend or make a distribution with respect to its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares or (iv) issue by reclassification of its shares of
Common Stock any shares of capital stock of the Company, the conversion
privilege and the conversion price in effect immediately prior to such action
shall be adjusted so that the Holder of any Securities thereafter surrendered
for conversion shall be entitled to receive the number of shares of capital
stock of the Company which he would have owned immediately following such action
had such Securities been converted immediately prior thereto. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend or other distribution and shall become
effective immediately after the effective date in case of a subdivision,
combination or reclassification (or immediately after the record date if a
record date shall have been established for such event). If, as a result of an
adjustment made pursuant to this subsection (a), the Holder of any Security
thereafter surrendered for conversion shall become entitled to receive shares of
two or more classes or series of capital stock of the Company, the Board of
Directors (whose determination shall be conclusive and shall be described in a
Board Resolution filed with the Trustee) shall determine the allocation of the
adjusted conversion price between or among shares of such classes or series of
capital stock. In the event that such dividend, distribution, subdivision,
combination or issuance is not so paid or made, the conversion price shall again
be adjusted to be the conversion price which would then be in effect if such
record date had not been fixed.
(b) In case the Company shall, while any of the Securities are
Outstanding, issue rights or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share of Common Stock (as
determined pursuant to subsection (f) below) on the record date mentioned below,
the conversion price for the Securities shall be adjusted so that the same shall
equal the price determined by
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multiplying the conversion price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price, and of
which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants. For the purposes of this subsection, the number of
shares of Common Stock at any time outstanding shall not include shares held
in the 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. In case any rights or warrants referred to in this subsection in
respect of which an adjustment shall have been made shall expire unexercised
within 45 days after the same shall have been distributed or issued by the
Company, the conversion price shall be readjusted at the time of such
expiration to the conversion price that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(c) Subject to the last sentence of this subparagraph, in case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness, shares of any class or series of capital stock,
cash or assets (including securities, but excluding any rights or warrants
referred to in subparagraph (b), any dividend or distribution paid exclusively
in cash and any dividend or distribution referred to in subparagraph (a) of this
Section 1303), the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price reduction
contemplated by this subparagraph (c) by a fraction of which the numerator shall
be the current market price per share (determined as provided in subparagraph
(f)) of the Common Stock on the date fixed for the payment of such distribution
(the "Reference Date") less the fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors), on the Reference Date, of the
portion of the evidences of indebtedness, shares of capital stock, cash and
assets so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of business
on the day following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the conversion price shall again be
adjusted to be the conversion price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Directors determines
the fair market value of any distribution for purposes of this subparagraph (c)
by reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per share
of Common Stock (determined as provided in subparagraph (f)). For purposes of
this subparagraph (c), any dividend or distribution that includes shares of
Common Stock or rights or warrants to subscribe for or purchase shares of Common
Stock shall be deemed instead to be (1) a dividend or distribution of the
evidences of indebtedness, shares of capital stock, cash or assets
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other than such shares of Common Stock or such rights or warrants (making any
conversion price reduction required by this subparagraph (c)) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (making any further conversion price reduction
required by subparagraph (a) or (b)), except (A) the Reference Date of such
dividend or distribution as defined in this subparagraph shall be substituted
as (a) "the record date in the case of a dividend or other distribution," and
(b) "the record date for the determination of stockholders entitled to
receive such rights or warrants" and (c) "the date fixed for such
determination" within the meaning of subparagraphs (a) and (b) and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed outstanding for purposes of computing any adjustment of the conversion
price in subparagraph (a).
(d) In case the Company shall pay or make a dividend or other distribution
on its Common Stock exclusively in cash (excluding all regular cash dividends,
if the annualized amount thereof per share of Common Stock does not exceed 10%
of the current market price per share, determined as provided in subparagraph
(f), of the Common Stock on the Trading Day immediately preceding the date of
declaration of such dividend), the conversion price shall be reduced so that the
same shall equal the price determined by multiplying the conversion price in
effect immediately prior to the effectiveness of the conversion price reduction
contemplated by this subparagraph by a fraction of which the numerator shall be
the current market price per share (determined as provided in subparagraph (f))
of the Common Stock on the date fixed for the payment of such distribution less
the amount of cash so distributed (excluding that portion of such distribution
that does not exceed 10% of the current market price per share, determined as
provided above) applicable to one share of Common Stock and the denominator
shall be such current market price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; PROVIDED,
HOWEVER, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the current market price
per share (as defined in subparagraph (f)) of the Common Stock on the record
date mentioned above (excluding that portion of such distribution that does not
exceed 10% of the current market price per share, determined as provided above),
in lieu of the foregoing adjustment, adequate provision shall be made so that
each Holder of shares of Securities shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each share of the Securities immediately prior to the record date for
the distribution of the cash (less that portion of such distribution that does
not exceed 10% of the current market price per share, determined as provided
above). In the event that such dividend or distribution is not so paid or made,
the conversion price shall again be adjusted to be the conversion price which
would then be in effect if such record date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot offer) made
by the Company or any Subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall involve the
payment by the Company or such Subsidiary of consideration per share of Common
Stock having a fair market value (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) at the last time (the "Expiration Time")
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tenders or exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended) that exceeds the current market price per
share (determined as provided in subparagraph (f)) of the Common Stock on the
Trading Day next succeeding the Expiration Time, the conversion price shall
be reduced so that the same shall equal the price determined by multiplying
the conversion price in effect immediately prior to the effectiveness of the
conversion price reduction contemplated by this subparagraph (e) by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration
Time multiplied by the current market price per share (determined as provided
in subparagraph (f)) of the Common Stock on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") (excluding that portion of such consideration that does not exceed
the current market price per share, determined as provided above) and (y) the
product of the number of shares of Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the current market price per
share (determined as provided in subparagraph (f)) of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event that such tender or exchange offer is not
so made, the conversion price shall again be adjusted to be the conversion
price which would then be in effect if such record date had not been fixed.
(f) For the purpose of any computation under subparagraphs (b), (c), (d)
or (e), the current market price per share of Common Stock on any date in
question shall be deemed to be the average of the daily Closing Prices for the
five consecutive Trading Days selected by the Company commencing not more than
20 Trading Days before, and ending not later than, the earlier of the day in
question or, if applicable, the day before the "ex" date with respect to the
issuance or distribution requiring such computation; PROVIDED, HOWEVER, that if
another event occurs that would require an adjustment pursuant to subparagraph
(a) through (e), inclusive, the Board of Directors may make such adjustments to
the Closing Prices during such five Trading Day period as it deems appropriate
to effectuate the intent of the adjustments in this Section 1303, in which case
any such determination by the Board of Directors shall be set forth in a Board
Resolution and shall be conclusive. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the NYSE, or if the
security is not listed on the NYSE, the Nasdaq National Market or on such
successor securities exchange or inter-dealer quotation system as the Common
Stock may be listed or in the relevant market from which the Closing Prices were
obtained without the right to receive such issuance or distribution, and (2)
when used with respect to any tender or exchange offer means the first date on
which the Common Stock trades regular way on such securities exchange or inter-
dealer quotation system or in such market after the Expiration Time of such
offer.
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(g) The Company may make such reductions in the conversion price, in
addition to those required by subparagraphs (a) through (e), as it considers to
be advisable to avoid or diminish any income tax to holders of Common Stock or
rights to purchase Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes. The Company from time to time may reduce the conversion price by
any amount for any period of time if the period is at least twenty (20) days,
the reduction is irrevocable during the period, and the Board of Directors of
the Company shall have made a determination that such reduction would be in the
best interest of the Company, which determination shall be conclusive. Whenever
the conversion price is reduced pursuant to the preceding sentence, the Company
shall mail to holders of record of the Securities a notice of the reduction at
least fifteen (15) days prior to the date the reduced conversion price takes
effect, and such notice shall state the reduced conversion price and the period
it will be in effect.
(h) No adjustment of the conversion price shall be required upon the
issuance of any shares of Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
the Company and the investment of additional optional amounts in shares of
Common Stock under any such plan. No adjustment in the conversion price shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the conversion price; PROVIDED, however, that any adjustments which
by reason of this subparagraph are not required to be made shall be carried
forward and taken into account in determining whether any subsequent adjustment
shall be required.
(i) If any action would require adjustment of the conversion price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of the Securities.
SECTION 1304. FUNDAMENTAL CHANGE.
(a) In the event that the Company shall be a party to any transaction
(including without limitation (i) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (ii) 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 a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (iii) any sale or transfer of all or substantially all of the
assets of the Company or (iv) any compulsory share exchange) pursuant to which
either shares of Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of a sale or transfer of all
or substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
lawful provision shall be made as part of the terms of such transaction whereby
the Holder of each Security then outstanding shall have the right thereafter to
convert such Security only into:
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(1) in the case of any such transaction that does not constitute a
Common Stock Fundamental Change (as defined below) and subject to funds being
legally available for such purpose under applicable law at the time of such
conversion, the kind and amount of the securities, cash or other property that
would have been receivable upon such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock issuable upon conversion of such Security
immediately prior to such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange, after giving effect, in the case of
any Non-Stock Fundamental Change (as defined below), to any adjustment in the
Conversion Price in accordance with Section 1304(c)(1); and
(2) in the case of any such transaction that constitutes a Common
Stock Fundamental Change, common stock of the kind received by holders of Common
Stock as a result of such Common Stock Fundamental Change in an amount
determined in accordance with Section 1304(c)(2).
(b) The Company or the Person formed by such consolidation or resulting
from such merger or that acquired such assets or that acquires the Company's
shares, as the case may be, shall expressly assume all obligations under this
Indenture, the Declaration, the Guarantee and all Outstanding Securities by
entering into a supplemental indenture to this Indenture and by becoming a party
to the Declaration and the Guarantee (as applicable) to amend each of such
agreements to provide for such right provided for above with respect to the
Securities and the Preferred Securities. Such amendments and supplements shall
provide for adjustments which, for events subsequent to the effective date of
such agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article Thirteen. The above provisions shall
similarly apply to successive transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section 1304 to the
contrary, but without duplication with Section 1303, if any Fundamental Change
(as defined below) occurs, then the Conversion Price in effect will be adjusted
immediately after such Fundamental Change as follows:
(1) in the case of a Non-Stock Fundamental Change, the Conversion
Price of the Securities immediately following such Non-Stock Fundamental Change
shall be the lower of (A) the Conversion Price in effect immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to Section 1303, and (B) the product of (1) the
greater of the Applicable Price (as defined in Section 1307) and the then
applicable Reference Market Price (as defined in Section 1307) and (2) a
fraction, the numerator of which is $50 and the denominator of which is (x) the
amount of the Redemption Price set forth in Section 1109 for $50 in principal
amount of Securities if the Redemption Date were the date of such Non-Stock
Fundamental Change (or, for the period commencing on the first date of original
issuance of the Preferred Securities and to October 1, 1997 and the twelve month
periods commencing October 1, 1997, October 1, 1998 and October 1, 1999, the
product of 106.750%, 106.075%, 105.400% and 104.725%, respectively, times $50)
plus (y) any then-
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accrued and unpaid interest, including Additional Interest, Compounded
Interest and Liquidated Damages, if any on one Preferred Security; and
(2) in the case of a Common Stock Fundamental Change, the
conversion price of the Securities immediately following such Common Stock
Fundamental Change shall be the conversion price in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to Section 1303, multiplied by a fraction, the
numerator of which is the Purchaser Stock Price (as defined in Section 1307) and
the denominator of which is the Applicable Price; PROVIDED, however, that in the
event of a Common Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, paid with respect to
any fractional interests in such common stock resulting from such Common Stock
Fundamental Change) and (B) all of the Common Stock shall have been exchanged
for, converted into or acquired for, common stock of the successor, acquiror or
other third party (and any cash with respect to fractional interests or with
respect to appraisal or similar rights), the conversion price of the Securities
immediately following such Common Stock Fundamental Change shall be the
conversion price in effect immediately prior to such Common Stock Fundamental
Change multiplied by a fraction, the numerator of which is one and the
denominator of which is the number of shares of common stock of the successor,
acquiror or other third party received by a holder of one share of Common Stock
as a result of such Common Stock Fundamental Change.
SECTION 1305. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price and shall
prepare a certificate signed by the Chief Financial Officer or 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 the Trustee, the Conversion Agent and
the transfer agent for the Preferred Securities and the Securities; and
(b) a notice stating the conversion price has been adjusted and setting
forth the adjusted conversion price shall as soon as practicable be mailed by
the Company to all record holders of Preferred Securities and the Securities at
their last addresses as they appear upon the stock transfer books of the Company
and the Trust.
SECTION 1306. PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall (1) declare any dividend (or any other distribution)
on its Common Stock, other than (A) a dividend payable in shares of Common Stock
or (B) a dividend payable in cash that would not require an adjustment pursuant
to Section 1303(c) or (d) or (2)
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authorize a tender or exchange offer that would require an adjustment
pursuant to Section 1303(e);
(b) the Company shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or series or of any other rights or warrants;
(c) of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or from
par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company shall be required, or of the sale or transfer
of all or substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Stock is converted into other securities, cash
or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the stock transfer books the Trust or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least 15 days prior to the applicable record
or effective date hereinafter specified, a notice stating (x) the date on which
a record (if any) is to be taken for the purpose of such dividend, distribution,
rights or warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, 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, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 1307. CERTAIN DEFINED TERMS.
The following definitions shall apply to terms used in this
Article Thirteen:
(a) "APPLICABLE PRICE" means (i) in the event of a Non-Stock Fundamental
Change in which the holders of Common Stock receive only cash, the amount of
cash received by a holder of one share of Common Stock and (ii) in the event of
any other Fundamental Change, the average of the daily Closing Price for one
share of Common Stock during the 10 Trading Days immediately prior to the record
date for the determination of the holders of Common Stock
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entitled to receive cash, securities, property or other assets in connection
with such Fundamental Change or, if there is no such record date, prior to
the date upon which the holders of Common Stock shall have the right to
receive such cash, securities, property or other assets.
(b) "CLOSING PRICE" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of such common stock, in each case on the NYSE Composite Tape or, if the
common stock is not listed or admitted to trading on such exchange, on the
principal national securities exchange or interdealer quotation system on which
such common stock is listed or admitted to trading, or, if not listed or
admitted to trading on any national securities exchange or inter-dealer
quotation system, the average of the closing bid and asked prices as furnished
by any NYSE member firm selected from time to time by the Board of Directors of
the Company for that purpose or, if not so available in such manner, as
otherwise determined in good faith by the Board of Directors.
(c) "COMMON STOCK FUNDAMENTAL CHANGE" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors) of the consideration received by holders of Common Stock consists of
common stock, that, for the 10 Trading Days immediately prior to such
Fundamental Change, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on the
Nasdaq Stock Market; PROVIDED, HOWEVER, that a Fundamental Change shall not be a
Common Stock Fundamental Change unless either (i) the Company continues to exist
after the occurrence of such Fundamental Change and the outstanding Securities
continue to exist as outstanding Securities or (ii) not later than the
occurrence of such Fundamental Change, all obligations of the Company under this
Indenture, the Declaration, the Guarantee and all outstanding Securities are
expressly assumed by the Person succeeding to the business of the Company by
becoming a party to the Declaration and the Guarantee and by entering into a
supplemental indenture to this Indenture (as applicable), which obligations
shall include the right of the holders of the Preferred Securities to convert
the Preferred Securities (and the Securities) into the common stock of such
successor entity and providing for adjustments that, for events subsequent to
the effective date thereof, shall be as nearly equivalent as may be practicable
to the relevant adjustments provided for in this Article Thirteen.
(d) "FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
or series of transactions or events pursuant to which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); PROVIDED, however, in the case of any such series of transactions or
events, for purposes of adjustment of the conversion price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Stock shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of Common Stock received in the transaction or event as a result of
which more than 50% of the
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Common Stock outstanding shall have been exchanged for, converted into or
acquired for, or shall constitute solely the right to receive, such cash,
securities, property or other assets.
(e) "NON-STOCK FUNDAMENTAL CHANGE", means any Fundamental Change other
than a Common Stock Fundamental Change.
(f) "PURCHASER STOCK PRICE" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of Common Stock entitled to receive
such common stock or, if there is no such date, prior to the date upon which the
holders of Common Stock shall have the right to receive such common stock.
(g) "REFERENCE MARKET PRICE" initially means $16.25 and, in the event of
any adjustment to the conversion price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the conversion price after giving effect to any
such adjustment shall always be the same as the ratio of the initial Reference
Market Price to the initial conversion price of $28.75 per share.
(h) "TRADING DAY" shall mean a day on which securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.
SECTION 1308. DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under any such plan, and the issuance
of any shares of Common Stock or options or rights to purchase such shares
pursuant to any employee benefit plan or program of the Company or pursuant to
any option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date the Securities were first issued, shall not be deemed
to constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the conversion
price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article Thirteen.
SECTION 1309. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in Section 1303(c) or 1303(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 1303(c)), the Holder, upon the conversion thereof
subsequent to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution and prior to the
effectiveness of the
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conversion price adjustment in respect of such distribution, shall also be
entitled to receive for each share of Common Stock into which the Securities
are converted, the portion of the shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock; PROVIDED, HOWEVER, that,
at the election of the Company (whose election shall be evidenced by a
resolution of the Board of Directors) with respect to all Holders so
converting, the Company may, in lieu of distributing to such Holder any
portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board
of Directors). If any conversion of Securities described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Securities so converted is
entitled to receive in accordance with the immediately preceding sentence,
the Company may elect (such election to be evidenced by a resolution of the
Board of Directors) to distribute to such Holder a due ▇▇▇▇ for the shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets to which such Holder is so entitled, PROVIDED, that
such due ▇▇▇▇ (i) meets any applicable requirements of the principal national
securities exchange or other market on which the Common Stock is then traded
and (ii) requires payment or delivery of such shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets
no later than the date of payment or delivery thereof to holders of shares of
Common Stock receiving such distribution.
SECTION 1310. RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.
(a) Shares of Common Stock to be issued upon conversion of a Security in
respect of Preferred Securities bearing a Restricted Securities Legend (as
defined in the Declaration) shall bear such restrictive legends as the Company
may provide in accordance with applicable law.
(b) If shares of Common Stock to be issued upon conversion of a Security
in respect of Preferred Securities bearing a Restricted Securities Legend are to
be registered in a name other than that of the holder of such Preferred
Security, then the Person in whose name such shares of Common Stock are to be
registered must deliver to the Conversion Agent a certificate satisfactory to
the Company and signed by such Person, as to compliance with the restrictions on
transfer applicable to such Preferred Security. Neither the Trustee nor any
Conversion Agent or Registrar shall be required to register in a name other than
that of the Holder shares of Common Stock issued upon conversion of any such
Security in respect of such Preferred Securities not so accompanied by a
properly completed certificate.
SECTION 1311. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be under any
duty or responsibility to any Holder of any Security to determine whether any
facts exist which may require any adjustment of the conversion price, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any
-73-
supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any Conversion Agent shall be accountable with respect to the
validity or value (or the kind of account) of any shares of Common Stock or
of any securities or property, which may at any time be issued or delivered
upon the conversion of any Security; and neither the Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any shares
of Common Stock or stock certificates or other securities or property upon
the surrender of any Security for the purpose of conversion, or, except as
expressly herein provided, to comply with any of the covenants of the Company
contained in Article Ten or this Article Thirteen.
ARTICLE FOURTEEN
Miscellaneous
SECTION 1401. NO RECOURSE; IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS.
No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of any Security, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of any predecessor
or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities 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 or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Securities.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-74-
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.
VANSTAR CORPORATION
By: /s/ H. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: H. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President, General
Counsel and Secretary
------------------------------------
WILMINGTON TRUST COMPANY, as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ALAMEDA )
On October 2, 1996 before me personally came H. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he/she is
the Senior Vice President, General Counsel and Secretary of Vanstar
Corporation, one of the corporations described in and which executed the
foregoing instrument; and that he/she signed his/her name thereto by
authority of the Board of Directors of such corporation.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Notary Public State of California
No.
-----------------------------------
Qualified in __________________ County
Certificate Filed in _____________ County
Commission Expires ______________ 199__
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ALAMEDA )
On October 2, 1996 before me personally came ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me
known, who, being by me duly sworn, did depose and say that he/she is the
Vice President of Wilmington Trust Company, one of the corporations described
in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by authority of the Board of Directors of such
corporation.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Notary Public State of California
No.
-----------------------------------
Qualified in __________________ County
Certificate Filed in ______________ County
Commission Expires _________________ 199__
-77-
EXHIBIT A
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS THREE YEARS AFTER (OR SUCH SHORTER PERIOD UNDER
RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR RULE) THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH VANSTAR CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE")
ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRANSFER AGENTS RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-1
VANSTAR CORPORATION
6 3/4% Convertible Subordinated
Debenture due 2016
No. $
-------------------------- -----------------------
CUSIP No.
VANSTAR CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which terms include
any successor corporation under the Indenture hereinafter referred to) for value
received, hereby promises to pay to _____________________________________ ,
or registered assigns, the principal sum [indicated on Schedule A hereof]* [of
_______________ Dollars]**
($ ) on October 1, 2016.
Interest Payment Dates: January 1, April 1, July 1 and October 1,
commencing January 1, 1997
Regular Record Dates: the close of business on the Business Day immediately
preceding each Interest Payment Date, except as
otherwise provided in clause 4 set forth on the
reverse side of this Security
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.
______________
*Applicable to Global Securities only.
**Applicable to certificated Securities only.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated:
VANSTAR CORPORATION
By:
----------------------------------
Title:
----------------------------------
[Seal]
Attest:
--------------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: WILMINGTON TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Signatory
A-3
[FORM OF REVERSE OF SECURITY]
VANSTAR CORPORATION
6 3/4% Convertible Subordinated
Debenture due 2016*
(1) INTEREST. Vanstar Corporation, a Delaware corporation (the
"Company"), is the issuer of this 6 3/4% Convertible Subordinated Debenture due
2016 (the "Security") limited in aggregate principal amount to $180,412,350 (or
$207,474,200 if the over-allotment option is exercised), issued under the
Indenture hereinafter referred to. The Company promises to pay interest on the
Securities in cash from October 2, 1996 or from the most recent interest payment
date to which interest has been paid or duly provided for, quarterly (subject to
deferral for up to 20 consecutive quarters as described in Section 3 hereof) in
arrears on January 1, April 1, July 1, and October 1 of each year (each such
date, an "Interest Payment Date"), commencing January 1, 1997, at the rate of
6 3/4% per annum (subject to increase as provided in Section 12 hereto) PLUS
Additional Interest, Compound Interest and Liquidated Damages if any, until the
principal hereof shall have become due and payable.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. Except as provided in the following
sentence, the amount of interest payable for any period shorter than a full
quarterly period for which interest is computed will be computed on the basis of
the actual number of days elapsed. In the event that any date on which interest
is payable on the Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day which is a Business
Day (without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
(2) ADDITIONAL INTEREST. The Company shall pay to Vanstar
Financing Trust (and its permitted successors or assigns under the Declaration)
(the "Trust") such amounts as shall be required so that the net amounts received
and retained by the Trust after paying any taxes, duties, assessments or other
governmental charges of whatever nature (other than withholding taxes) imposed
on the Trust by the United States or any other taxing authority ("Additional
Interest") will be not less than the amounts the Trust would have received had
no such taxes, duties, assessment or governmental charges been imposed.
_____________
*All terms used in this Security which are defined in the Indenture or in
the Declaration attached as Annex A thereto shall have the meanings assigned to
them in the Indenture or the Declaration, as the case may be.
A-4
(3) OPTION TO EXTEND INTEREST PAYMENT PERIOD. The Company shall
have the right at any time during the term of the Securities to defer interest
payments from time to time by extending the interest payment period for
successive periods (each, an "Extension Period") not exceeding 20 consecutive
quarters for each such period; PROVIDED, no Extension Period may extend beyond
the maturity date of the Securities. At the end of each Extension Period, the
Company shall be responsible for the payment of, and the Company shall pay all
interest then accrued and unpaid (including Additional Interest and Liquidated
Damages) together with interest thereon compounded quarterly at the rate
specified for the Securities to the extent permitted by applicable law
("Compounded Interest"); PROVIDED, that during any Extension Period, the Company
shall not, and shall not allow any of its Subsidiaries (other than, with respect
to clause (i) below only, its wholly owned Subsidiaries) to, (i) declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(except for (1) dividends or distributions in shares of Common Stock on Common
Stock or on the Preferred Stock, (2) purchases or acquisitions of shares of
Common Stock made in connection with any employee benefit plan of the Company or
its subsidiaries in the ordinary course of business or pursuant to employment
agreements with officers or employees of the Company or its subsidiaries entered
into in the ordinary course of business, provided that such repurchases by the
Company made from officers or employees of the Company or its subsidiaries
pursuant to employment agreements shall be made at a price not to exceed market
value on the date of any such repurchase and shall not exceed $1 million in the
aggregate for all such employees and officers, (3) conversions or exchanges of
shares of Common Stock of any one class into shares of Common Stock of another
class or (4) purchases of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of any of the
Company's securities being converted or exchanged), (ii) make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem, any
debt securities issued by the Company that rank junior to or PARI PASSU with the
Securities and (iii) make any guarantee payments with respect to the foregoing.
Prior to the termination of any such Extension Period, the Company may further
extend such Extension Period; PROVIDED, that such Extension Period together with
all previous and further extensions thereof may not exceed 20 consecutive
quarters and may not extend beyond the maturity of the Securities. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Company may commence a new Extension Period, subject to the above requirements.
No interest during an Extension Period, except at the end thereof, shall be due
and payable.
If the Property Trustee is the sole holder of the Securities at the
time the Company selects an Extension Period, the Company shall give notice to
the Regular Trustees, the Property Trustee and the Trustee of its selection of
such Extension Period at least one Business Day prior to the earlier of (i) the
date the distributions on the Preferred Securities are payable or (ii) if the
Preferred Securities are listed on the New York Stock Exchange, Inc. ("NYSE") or
other stock exchange or quotation system, the date the Trust is required to give
notice to the NYSE or other applicable self-regulatory organization or to
holders of the Preferred Securities on the record date or the date such
distributions are payable, but in any event not less than ten Business Days
prior to such record date.
A-5
If the Property Trustee is not the sole holder of the Securities at
the time the Company selects an Extension Period, the Company shall give the
Holders and the Trustee notice of its selection of an Extension Period at least
ten Business Days prior to the earlier of (i) the next succeeding Interest
Payment Date or (ii) if the Preferred Securities are listed on the NYSE or other
stock exchange or quotation system, the date the Company is required to give
notice to NYSE or other applicable self-regulatory organization or to holders of
the Securities on the record or payment date of such related interest payment,
but in any event not less than two Business Days prior to such record date.
The quarter in which any notice is given pursuant to the second and
third paragraphs of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under the first paragraph of
this Section 3.
(4) METHOD OF PAYMENT. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
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 installment, which shall be the close of business
on the Business Day immediately preceding each Interest Payment Date; provided,
however, that, for so long as the Securities are held by the Trust or the
Property Trustee of the Trust, if any Preferred Securities (or if the Trust is
liquidated in connection with Special Event, any Securities) are held in
certificated form, the Record Date for each Interest Payment Date shall be 15
days prior to such Interest Payment Date (in each case, a "Regular Record
Date"). Any such interest not so punctually paid or duly provided for shall
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, notice of which shall be given to Holders of Securities not less than
10 days prior to such Special Record Date, 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.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Company maintained for that purpose in New York,
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
PROVIDED, however, that, at the option of the Company, payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
(5) PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT. The
Trustee will act as Paying Agent, Security Registrar and Conversion Agent. The
Company may change any Paying Agent, Security Registrar, co-registrar or, with
the consent of the Trust, Conversion Agent without prior notice. The Company or
any of its Affiliates may act in any such capacity.
A-6
(6) INDENTURE. The Company issued the Securities under an
indenture, dated as of October 2, 1996 (the "Indenture"), between the Company
and Wilmington Trust Company, as 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 Trustee, the Company and the Holders, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-
77bbbb) ("TIA") as in effect on the date of the Indenture. The Securities are
subject to, and qualified by, all such terms, certain of which are summarized
hereon, and Holders are referred to the Indenture and the TIA for a statement of
such terms. The Securities are unsecured general obligations of the Company
limited to $180,412,350 in aggregate principal amount (or $207,474,200 if the
overallotment option is exercised). 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 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 the Indenture.
(7) OPTIONAL REDEMPTION. The Securities are redeemable, in whole
or in part, at the Company's, option at any time and from time to time on or
after October 5, 1999, upon not less than 30 nor more than 60 days' notice, at
the following optional redemption prices (expressed as a percentage of the
principal amount of the Securities) if redeemed during the 12-month period
beginning October 1 of the year shown below (October 5, in the case of 1999):
Percentage of
Year Principal Year Amount
--------------- ---------------------
2000 . . . . . . . . . . . . . . . 104.050%
2001 . . . . . . . . . . . . . . . 103.375
2002 . . . . . . . . . . . . . . . 102.700
2003 . . . . . . . . . . . . . . . 102.025
2004 . . . . . . . . . . . . . . . 101.350
2005 . . . . . . . . . . . . . . . 100.675
2006 and thereafter . . . . . . . 100.000
plus, in each case, accrued and unpaid interest, including Additional Interest,
Compounded Interest and Liquidated Damages, if any, to the Redemption Date. On
or after the Redemption Date, interest will cease to accrue on the Securities,
or portion thereof, called for redemption.
(8) OPTIONAL REDEMPTION UPON TAX EVENT. The Securities are subject
to redemption in whole (but not in part), at any time within 90 days thereafter,
if a Tax Event (as defined in the Declaration) shall occur and be continuing, at
the applicable redemption price set forth above (or, for the period commencing
on the date of issuance of the Securities through October 4, 1997 and the twelve
month periods commencing October 5, 1997 and October 5, 1998, the product of
106.750%, 106.075% and 105.400%, respectively, times $50), in each
A-7
case plus accrued but unpaid interest, including Additional Interest,
Compounded Interest and Liquidated Damages, if any, to the Redemption Date.
Any redemption pursuant to this Section 8 will be made upon not less than 30
nor more than 60 days' notice.
(9) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of the Securities to be redeemed at his address of record. The
Securities in denominations larger than $50 may be redeemed in part but only in
integral multiples of $50. In the event of a redemption of less than all of the
Securities, the Securities will be chosen for redemption by the Trustee in
accordance with the Indenture. On and after the Redemption Date, interest ceases
to accrue on the Securities or portions of them called for redemption. If this
Security is redeemed subsequent to a Regular Record Date with respect to any
Interest Payment Date specified above and on or prior to such Interest Payment
Date, then any accrued interest will be paid to the person in whose name this
Security is registered at the close of business on such record date.
(10) REDEMPTION. The Securities will mature on October 1, 2016, and
may be redeemed, in whole or in part, at any time after October 5, 1999 as set
forth above or at any time in certain circumstances upon the occurrence of a Tax
Event as set forth above. Upon the repayment of the Securities, whether at
maturity or upon redemption, the proceeds from such repayment or payment shall
simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the Securities so repaid or redeemed at the
applicable redemption price together with accrued and unpaid distributions
through the date of redemption; PROVIDED, that holders of the Trust Securities
shall be given not less than 30 nor more than 60 days notice of such redemption.
Upon the repayment of the Securities at maturity or upon any acceleration,
earlier redemption or otherwise, the proceeds from such repayment will be
applied to redeem the Preferred Securities, in whole, upon not less than 30 nor
more than 60 days' notice. There are no sinking fund payments with respect to
the Securities.
(11) CONVERSION. The Holder of any Security has the right,
exercisable at any time prior to the close of business (New York time) on the
Business Day immediately preceding the date of repayment of such Security
whether at maturity or upon redemption (either at the option of the Company or
pursuant to a Tax Event), to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into the number of shares
of Common Stock obtained by dividing $50 per Security by the applicable
conversion price (initially $28.75 per share of Common Stock for each Security)
(equivalent to a conversion rate of 1.739 shares per share of Common Stock of
the Company per Security), subject to adjustment under certain circumstances as
set forth in the Indenture.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Security Registrar or Conversion Agent and (4) pay
any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Security for conversion after the close of business on the Regular Record Date
for the payment
A-8
of an installment of interest and prior to the opening of business on the
next Interest Payment Date, then, notwithstanding such conversion, the
interest payable on such Interest Payment Date will be paid to the registered
Holder of such Security on such Regular Record Date. In such event, such
Security, when surrendered for conversion, need not be accompanied by payment
of an amount equal to the interest payable on such Interest Payment Date on
the portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The Outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock.
(12) REGISTRATION RIGHTS. The holders of the Preferred Securities,
the Securities, the Guarantee and the shares of Common Stock of the Company
issuable upon conversion of the Securities (collectively, the "REGISTRABLE
SECURITIES") are entitled to the benefits of a Registration Rights Agreement,
dated as of October 2, 1996, among the Company, the Trust and the Initial
Purchasers (the "Registration Rights Agreement"). Pursuant to the Registration
Rights Agreement, the Company has agreed for the benefit of the holders of
Registrable Securities that (i) it will, at its cost, within 75 days after the
date of issuance of the Registrable Securities, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Registrable Securities, (ii) it will use its reasonable
efforts to cause, such Shelf Registration Statement to be declared effective by
the Commission within 135 days after the date of issuance of the Registrable
Securities and (iii) the Company will use its reasonable efforts to maintain
such Shelf Registration Statement continuously effective under the Securities
Act until the third anniversary of the effectiveness of the Shelf Registration
Statement or such earlier date as is provided in the Registration Rights
Agreement. Reference is made to the Registration Rights Agreement for a
description of, among other things, the circumstances under which a
"Registration Default" may be declared if such Shelf Registration Statement is
not filed or is not declared effective within a specified period of time, and
additional interest "Liquidated Damages" may accrue and by payable on the
Securities as a result of such a Registration Default.
(13) REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. 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 New York, New York or Wilmington, Delaware, 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 registered form without coupons in
denominations of $50 and integral multiples thereof. No service charge shall be
made for any
A-9
such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Prior to due 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, 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. In the event of redemption or conversion
of this Security in part only, a new Security or Securities for the
unredeemed or unconverted portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
(14) PERSONS DEEMED OWNERS. Except as provided in Section 4 hereof,
the registered Holder of a Security may be treated as its owner for all
purposes.
(15) UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
pay the money back to the Company at its written request. After that, holders
of Securities entitled to the money must look to the Company for payment unless
an abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
(16) DEFAULTS AND REMEDIES. The Securities shall have the Events of
Default as set forth in Section 501 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company, or the holders of at least 25% in
aggregate principal amount of the then Outstanding Securities by notice to the
Company and the Trustee, may declare all the Securities to be due and payable
immediately.
The holders of a majority in principal amount of the Securities then
Outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission is prior to a judgment or decree for the payment
of the money due has been obtained by the Trustee as provided in the Indenture
and if all existing Events of Default have been cured or waived except
nonpayment of principal and/or interest that has become due solely because of
the acceleration. Holders may not enforce the Indenture or the Securities
except as provided in the Indenture. Subject to certain limitations, holders of
a majority in principal amount of the then Outstanding Securities issued under
the Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
(17) AMENDMENTS, SUPPLEMENTS AND WAIVERS. 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 a majority in aggregate principal
amount of the Securities at the time Outstanding. 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,
A-10
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.
(18) TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the same
rights it would have, as if it were not Trustee, subject to certain limitations
provided for in the Indenture and in the TIA. Any Agent may do the same with
like rights.
(19) NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(20) GOVERNING LAW. THE INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
(21) AUTHENTICATION. The Securities shall not be valid until
authenticated by the manual signature of an authorized signatory of the Trustee
or an authenticating agent.
The Company will furnish to any Holder of the Securities upon written
request and without charge a copy of the Indenture. Request may be made to:
Vanstar Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention of: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
A-11
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
-----------------------------
(Sign exactly as your name appears on the
other side of this Security)
Date:
---------------------------------------
Signature Guarantee:*
-----------------------
[Include the following if the Security bears a Restricted Securities Legend --
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without transfer;
or
(2) / / transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
__________________
*Signature must be guaranteed by a commercial bank, trust company or member
firm of the NYSE.
(3) / / transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) / / transferred pursuant to an effective Shelf Registration
Statement.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; PROVIDED, HOWEVER, that if box (3) or (4) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
-----------------------------------
Signature
Signature Guarantee:*
----------------------------- --------------------------------- ]
Signature must be guaranteed Signature
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[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
------------------------- ---------------------------------------
NOTICE: To be executed by an executive
officer.]
______________
*Signature must be guaranteed by a commercial bank, trust company or member
firm of the NYSE.
-2-
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be $__________.
The following increases or decreases in the principal amount of this Global
Security have been made:
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AMOUNT OF INCREASE IN
PRINCIPAL AMOUNT OF THIS
GLOBAL SECURITY INCLUDING AMOUNT OF DECREASE IN PRINCIPAL AMOUNT OF THIS SIGNATURE OF AUTHORIZED
UPON EXERCISE OF OVER- PRINCIPAL AMOUNT OF THIS GLOBAL SECURITY FOLLOWING OFFICER OF TRUSTEE OR
DATE MADE ALLOTMENT OPTION GLOBAL SECURITY SUCH DECREASE OR INCREASE SECURITIES CUSTODIAN
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-3-
ELECTION TO CONVERT
To: Vanstar Corporation
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Common
Stock of Vanstar Corporation in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Indenture and the Security, agrees to be bound by the terms of
the Registration Rights Agreement relating to the Common Stock issuable upon
conversion of the Securities.
Date:
-------------------------
in whole _____ Portions of Security to be in part converted
in part _____ ($50 or integral multiples thereof):
$
-----------------------------------------
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Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
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-------------------------------------------
-------------------------------------------
Signature Guarantee:*
---------------------
__________________
*Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.