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LEUCADIA NATIONAL CORPORATION
and
[ ], Trustee
--------------------
INDENTURE
Dated as of October [ ], 1996
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$135,000,000
[ ]% Senior Subordinated Notes due 2006
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
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310(a)(1)..................................................... 6.10
(a)(2)..................................................... 6.10
(a)(3)..................................................... N.A.
(a)(4)..................................................... N.A.
(a)(5)..................................................... 6.08
(b)........................................................ 6.08; 6.10
(c)........................................................ N.A.
311(a)........................................................ 6.11
(b)........................................................ 6.11
(c)........................................................ N.A.
312(a)........................................................ 2.05
(b)........................................................ 10.03
(c)........................................................ 10.03
313(a)........................................................ 6.06
(b)(1)..................................................... N.A.
(b)(2)..................................................... 6.06
(c)........................................................ 6.06; 10.02
(d)........................................................ 6.06
314(a)........................................................ 3.02; 3.03; 10.02
(b)........................................................ N.A.
(c)(1)..................................................... 10.04
(c)(2)..................................................... 10.04
(c)(3)..................................................... N.A.
(d)........................................................ N.A.
(e)........................................................ 10.05
(f)........................................................ N.A.
315(a)........................................................ 6.01(b)
(b)........................................................ 6.05; 10.02
(c)........................................................ 6.01(a)
(d)........................................................ 6.01(c)
(e)........................................................ 5.11
316(a)(last sentence)......................................... 10.06
(a)(1)(A).................................................. 5.05
(a)(1)(B).................................................. 5.02; 5.04; 8.02
(a)(2)..................................................... N.A.
(b)........................................................ 5.07
317(a)(1)..................................................... 5.08
(a)(2)..................................................... 5.09
(b)........................................................ 2.04
318(a)........................................................ 10.01
--------------------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of this Indenture.
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Page
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Section 1.01. Definitions.................................................... 1
Section 1.02. Other Definitions.............................................. 10
Section 1.03. Incorporation by Reference of Trust
Indenture Act................................................ 10
Section 1.04. Rules of Construction.......................................... 11
ARTICLE TWO
THE SECURITIES
Section 2.01. Form and Dating................................................ 12
Section 2.02. Execution and Authentication................................... 12
Section 2.03. Registrar and Paying Agent..................................... 13
Section 2.04. Paying Agent To Hold Money in Trust............................ 13
Section 2.05. Securityholder Lists........................................... 14
Section 2.06. Transfer and Exchange.......................................... 14
Section 2.07. Replacement Securities......................................... 14
Section 2.08. Outstanding Securities......................................... 15
Section 2.09. Temporary Securities........................................... 15
Section 2.10. Cancellation................................................... 15
Section 2.11. Defaulted Interest............................................. 16
ARTICLE THREE
COVENANTS
Section 3.01. Payment of Securities.......................................... 16
Section 3.02. SEC Reports.................................................... 16
Section 3.03. Compliance Certificate......................................... 17
Section 3.04. Maintenance of Office or Agency................................ 18
Section 3.05. Corporate Existence............................................ 18
Section 3.06. Waiver of Stay, Extension or Usury Laws........................ 19
Section 3.07. Transactions with Affiliates................................... 19
Section 3.08. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.......................... 20
Section 3.09. Limitation on Restricted Payments and
Restricted Investments....................................... 20
Section 3.10. Maintenance of Consolidated Tangible Net
Worth........................................................ 21
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Page
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Section 3.11. Change of Control.............................................. 25
Section 3.12. Limitation on Incurrence of Additional
Indebtedness by the Company and on
Incurrence of Additional Indebtedness
and Issuance of Preferred Stock by Its
Subsidiaries................................................. 28
Section 3.13. Limitation on Issuance of Other
Subordinated Debt............................................ 28
Section 3.14. Restriction on Investments by Insurance
Subsidiaries................................................. 28
Section 3.15. Limitation on Certain Payments or
Investments.................................................. 29
ARTICLE FOUR
SUCCESSOR CORPORATION
Section 4.01. When Company May Merge, etc.................................... 30
Section 4.02. Successor Corporation Substituted.............................. 31
ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 5.01. Events of Default.............................................. 32
Section 5.02. Acceleration................................................... 33
Section 5.03. Other Remedies................................................. 34
Section 5.04. Waiver of Past Defaults........................................ 34
Section 5.05. Control by Majority............................................ 35
Section 5.06. Limitation on Remedies......................................... 35
Section 5.07. Rights of Holders To Receive Payment........................... 36
Section 5.08. Collection Suit by Trustee..................................... 36
Section 5.09. Trustee May File Proofs of Claim............................... 36
Section 5.10. Priorities..................................................... 36
Section 5.11. Undertaking for Costs.......................................... 37
ARTICLE SIX
TRUSTEE
Section 6.01. Duties of Trustee.............................................. 37
Section 6.02. Rights of Trustee.............................................. 39
Section 6.03. Individual Rights of Trustee................................... 39
Section 6.04. Trustee's Disclaimer........................................... 40
Section 6.05. Notice of Defaults............................................. 40
Section 6.06. Reports by Trustee to Holders.................................. 40
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Page
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Section 6.07. Compensation and Indemnity..................................... 40
Section 6.08. Replacement of Trustee......................................... 42
Section 6.09. Successor Trustee by Merger, etc............................... 43
Section 6.10. Eligibility; Disqualification.................................. 43
Section 6.11. Preferential Collection of Claims Against
Company...................................................... 43
ARTICLE SEVEN
DISCHARGE OF INDENTURE
Section 7.01. Termination of Company's Obligations........................... 43
Section 7.02. Application of Trust Money..................................... 44
Section 7.03. Repayment to Company........................................... 44
Section 7.04. Reinstatement.................................................. 45
ARTICLE EIGHT
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders..................................... 45
Section 8.02. With Consent of Holders........................................ 46
Section 8.03. Compliance with Trust Indenture Act............................ 47
Section 8.04. Revocation and Effect of Consents.............................. 47
Section 8.05. Notation on or Exchange of Securities.......................... 48
Section 8.06. Trustee Protected.............................................. 48
ARTICLE NINE
SUBORDINATION
Section 9.01. Securities Subordinated to Senior
Indebtedness................................................. 48
Section 9.02. Company Not To Make Payments with Respect
to Securities in Certain Circumstances....................... 49
Section 9.03. Securities Subordinated to Prior Payment
of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization
of Company................................................... 50
Section 9.04. Securityholders To Be Subrogated to
Rights of Holders of Senior
Indebtedness................................................. 51
Section 9.05. Obligation of the Company Unconditional........................ 52
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Page
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Section 9.06. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice.............................. 53
Section 9.07. Application by Trustee of Monies
Deposited with It............................................ 53
Section 9.08. Subordination Rights Not Impaired by
Acts or Omissions of Company or Holders
of Senior Indebtedness....................................... 54
Section 9.09. Securityholders Authorize Trustee To...........................
Effectuate Subordination of Securities....................... 54
Section 9.10. Right of Trustee To Hold Senior
Indebtedness................................................. 55
Section 9.11. Article Nine Not To Prevent Events of
Default...................................................... 55
Section 9.12. Ranking; Designation........................................... 55
ARTICLE TEN
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls................................... 55
Section 10.02. Notices........................................................ 56
Section 10.03. Communication by Holders with Other
Holders...................................................... 57
Section 10.04. Certificate and Opinion as to Conditions
Precedent.................................................... 57
Section 10.05. Statements Required in Certificate or
Opinion...................................................... 57
Section 10.06. When Treasury Securities Disregarded........................... 58
Section 10.07. Rules by Trustee and Agents.................................... 58
Section 10.08. Legal Holidays................................................. 58
Section 10.09. Governing Law.................................................. 58
Section 10.10. No Adverse Interpretation of Other
Agreements................................................... 58
Section 10.11. No Recourse Against Others..................................... 58
Section 10.12. Successors..................................................... 59
Section 10.13. Duplicate Originals............................................ 59
Section 10.14. Separability................................................... 59
SIGNATURES.............. .............................................................. 60
EXHIBIT A - FORM OF SECURITY........................................................... A-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed
to be a part of this Indenture.
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INDENTURE dated as of October [ ], 1996 between Leucadia National
Corporation, a New York corporation (the "Company"), and [ ], as
trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the holders of the Company's [ ]%
Senior Subordinated Notes due October [ ], 2006 (the "Securities"):
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness or Preferred Stock of
a Person either (i) existing at the time such Person becomes a Subsidiary, (ii)
assumed in connection with the acquisition of assets of such Person or (iii) any
refinancing or replacement by such Person of such Indebtedness or Preferred
Stock; provided, that the aggregate amount of such Indebtedness or Preferred
Stock then outstanding is not increased. Acquired Indebtedness shall not include
(x) any such Indebtedness created or Preferred Stock issued in anticipation of
such Person becoming a Subsidiary (other than a refinancing or replacement of
Indebtedness or Preferred Stock of such Person, which original Indebtedness or
Preferred Stock was not incurred or issued in anticipation of such Person
becoming a Subsidiary) or (y) any Indebtedness or Preferred Stock that is
recourse to the Company or any Subsidiary or any of their respective assets,
other than to such Person and its Subsidiaries and their respective assets.
"Affiliate" of the Company means (i) any Related Person and (ii)
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
-2-
"Board of Directors" means the Board of Directors of the Company
or any committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"business day" means any day on which the New York Stock Exchange
is open for trading and which is not a Legal Holiday.
"Capitalized Lease" means any lease which is, in accordance with
GAAP, capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" means the discounted present
value of the rental obligations of any Person under any lease of any property
(whether real, personal or mixed) which, in accordance with GAAP, is required to
be capitalized on the balance sheet of such Person.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
capital stock, including each class of common stock and preferred stock of such
Person.
"Cash Equivalents" shall mean (i) securities issued or directly
and fully guaranteed or insured by the United States or any agency or
instrumentality thereof, (ii) U.S. dollar denominated time deposits,
certificates of deposit, eurodollar time deposits, eurodollar certificates of
deposit, and bankers acceptances of any domestic commercial bank of recognized
standing having capital and surplus in excess of $500,000,000, (iii) commercial
paper having a rating from Standard & Poor's Corporation ("S&P") of at least A-2
or the equivalent thereof or from ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") of
at least P-2 or the equivalent thereof or from Duff & ▇▇▇▇▇▇ Inc. ("Duff &
▇▇▇▇▇▇") of at least D-2 or the equivalent thereof and maturing within nine
months from the date of acquisition, and (iv) tax-exempt commercial paper of
United States municipal, state or local governments rated at least A-2 or the
equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody's
or at least D-2 or the equivalent thereof by Duff & ▇▇▇▇▇▇ and maturing within
nine months from the date of acquisition.
-3-
"Certain Payment or Investment" shall be deemed to occur on the
first day on which the aggregate Restricted Payments and Restricted Investments
exceed by $100,000,000 (calculated on the date of payment or investment) the
amount of Restricted Payments and Restricted Investments that could otherwise be
made pursuant to Section 3.09 if gains on sales of segments, businesses or major
lines of business, net of losses on such sales (whether sold as assets or
stock), had been excluded from the definition of "Consolidated Net Income".
"Common Shares" means the Common Shares, par value $1.00
per share, of the Company.
"Company" means Leucadia National Corporation, a New York
corporation, until a successor replaces such Person in accordance with the terms
of this Indenture, and thereafter means such successor.
"Consolidated Debt" means, on any date, the sum of (i) total
Indebtedness of the Company and its Subsidiaries, at such date, determined in
accordance with GAAP on a consolidated basis, and (ii) the aggregate liquidation
preference of all Preferred Stock of Subsidiaries of the Company, at such date,
other than Preferred Stock to the extent held by the Company and its
Subsidiaries; provided, that Consolidated Debt shall not include Permitted
Indebtedness.
"Consolidated Net Income" and "Consolidated Net Loss" mean, for
any period, the net income or loss, as the case may be, of the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP (provided, that, for periods ended prior to January 1, 1995,
Consolidated Net Income shall mean the reported income before cumulative effects
of changes in accounting principles of the Company and its Subsidiaries);
provided, that there shall be excluded therefrom (to the extent otherwise
included therein) (i) the net income (or net loss) of any Person that is not the
Company or a Subsidiary of the Company, except net income of such Person may be
included to the extent of the amount of dividends or other distributions
actually paid or made to the Company or any of its Subsidiaries by such other
Person during such period, (ii) except to the extent includible pursuant to the
foregoing clause (i), the net income (or net loss) of any other Person accrued
prior to the date it becomes a Subsidiary of the Company or is merged into or
consolidated with the Company or any of its Subsidiaries or such other Person's
assets are acquired by the Company or any of its Subsidiaries,
-4-
(iii) all extraordinary gains, to the extent they exceed extraordinary losses,
in each case, determined in accordance with GAAP and (iv) all gains or losses
resulting from the effect of any accounting change.
"Consolidated Net Worth" means, as of any date, the sum of the
Capital Stock and additional paid-in capital plus retained earnings (or minus
accumulated deficit) of the Company as of such date determined on a consolidated
basis in accordance with GAAP.
"Consolidated Tangible Net Worth" with respect to the Company
means, as of any date, the total shareholders' equity of the Company determined
in accordance with GAAP less (a) (to the extent not otherwise deducted from
total shareholders' equity at such date) the amount of Restricted Investments of
the Company and its Subsidiaries outstanding on such date and (b) any and all
goodwill and other intangible assets reflected on the consolidated balance sheet
of the Company as of such date. Deferred policy acquisition costs ("DPAC") and
that portion of the value of insurance in force resulting from an acquisition
and equivalent to the amount of DPAC of the acquired entity outstanding
immediately prior to such acquisition shall not be deemed goodwill or other
intangible assets for purposes of determining Consolidated Tangible Net Worth.
"Default" means any event which is, or after notice or passage of
time would be, an Event of Default.
"8 1/4% Notes" means the Company's 8 1/4% Senior Subordinated
Notes due 2005.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"5 1/4% Debentures" mean the Company's 5 1/4% Convertible
Subordinated Debentures due 2003.
"GAAP" or "generally accepted accounting principles" means United
States generally accepted accounting principles as in effect on December 31,
1995, without giving effect to the Company's adoption after such date of any
change in its application of GAAP.
"Holder" or "Securityholder" means a Person in whose name a
Security is registered on the Registrar's books.
-5-
"Indebtedness" of any Person means (i) any liability of such
Person (a) for borrowed money, (b) evidenced by a note, debenture or similar
instrument (including a Purchase Money Obligation or deferred payment
obligation) given in connection with the acquisition of any property or assets
(other than inventory or similar property acquired in the ordinary course of
business), including securities, (c) for the payment of a Capitalized Lease
Obligation of such Person or (d) with respect to the reimbursement of any letter
of credit, banker's acceptance or similar credit transaction (other than trade
letters of credit issued in the ordinary course of business; provided, that the
failure to make prompt reimbursement of any trade letter of credit shall be
deemed to be the incurrence of Indebtedness); and (ii) any guarantee by such
Person of any liability of others described in clause (i) above or any
obligation of such Person with respect to any liability of others described in
clause (i) above. Indebtedness shall not include deposits at the Company's
banking and lending Subsidiaries.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Director" means any director of the Company who is
neither (i) an executive officer or an employee of the Company or of any of its
Subsidiaries or Affiliates or (ii) a Related Person.
"Investment" means any direct or indirect advance, loan (other
than advances or loans to customers in the ordinary course of business, which
are recorded at the time made as accounts receivable on the balance sheet of the
Person making such advance or loan) or other extension of credit or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures, evidences of
Indebtedness or other securities issued by, any other Person.
"Investment Grade" is defined as BBB- or higher by S&P or Baa3 or
higher by Moody's or the equivalent of such ratings by Moody's or S&P.
"Investment Grade Securities" means (i) securities having any of
the following ratings: at least BBB- or the equivalent thereof by S&P or at
least Baa3 or the equivalent thereof by Moody's or at least BBB- or the
equivalent thereof by Duff & ▇▇▇▇▇▇ or (ii) cash or Cash Equivalents.
-6-
"Material Subsidiary" means (i) any Subsidiary of the Company
which at December 31, 1995 was a "significant subsidiary" under Regulation S-X
promulgated by the SEC or any successor to such Subsidiary and (ii) any other
Subsidiary of the Company; provided, that the Company's investments in and
advances to such Subsidiary at the date of determination thereof, without giving
effect to any write downs in such investments or advances taken within the prior
12 months, represent 20% or more of the Company's Consolidated Tangible Net
Worth as of such time; provided, however, that this clause (ii) shall not
include any Subsidiary if, at the time that it became a Subsidiary, the Company
contemplated commencing a voluntary case or proceeding under the Bankruptcy Law
with respect to such Subsidiary.
"Minimum Tangible Net Worth" means $250,000,000.
"Obligations" means any principal, interest, penalties, fees,
indemnities and other obligations and liabilities payable under the
documentation governing the applicable Indebtedness.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Chief Financial Officer or the Treasurer of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and the Secretary, Assistant Secretary or Assistant
Treasurer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
"Permitted Indebtedness" means (i) any Indebtedness of the
Company and its Subsidiaries outstanding on the date of this Indenture or any
refinancing or replacement thereof; provided, that the aggregate amount of such
Indebtedness is not increased, (ii) Acquired Indebtedness, (iii) Preferred Stock
of Subsidiaries held by the Company or its Subsidiaries (it being understood
that the sale of such Preferred Stock by the Company or such Subsidiary to any
Person other than the Company or a Subsidiary of the Company or such Subsidiary
no longer being a Subsidiary shall be deemed the issuance of Preferred Stock for
purposes of Section 3.12) and (iv) intercompany Indebtedness.
-7-
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Stock" of an entity means the Capital Stock of that
entity which is preferred as to the payment of dividends or the distribution of
assets on any voluntary or involuntary liquidation, over the shares of any other
class or series of Capital Stock of said entity.
"principal" of a debt security means the principal amount of the
security plus the premium, if any, on the security.
"Purchase Money Obligations" means indebtedness evidenced by a
note, debenture, bond or other security or investment (whether or not secured by
any lien or other security interest) issued to or assumed in favor of a vendor
as all or part of the purchase price of property acquired by the Company or any
Subsidiary; provided, however, that such term shall not include any account
payable or any other indebtedness incurred, created or assumed in the ordinary
course of business in connection with the obtaining of material, products or
services.
"Related Person" means any Person who directly or indirectly
holds 10% or more of any class of Capital Stock of the Company as determined
pursuant to Rule 13d-3 under the Exchange Act.
"Restricted Investment" means, with respect to the Company or any
Subsidiary of the Company, an Investment by such Person in an Affiliate of the
Company (other than (x) in the Company or a Subsidiary of the Company or (y) in
a Person that is an Affiliate of the Company solely because of (i) the ownership
of securities of such Person by the Company or its Subsidiaries, (ii)
contractual arrangements between the Company and its Subsidiaries and such
Person or (iii) a combination of (i) and (ii)).
"Restricted Payment" means (i) the declaration or making of any
dividend or of any other payment or distribution on or with respect to the
Company's Capital Stock (other than dividends, payments or distributions payable
solely in shares of the Company's Capital Stock), (ii) any payment on account of
the purchase, redemption, retirement or other acquisition for value of the
Company's Capital Stock; provided, that so long as
-8-
there shall not be a Default or Event of Default under this Indenture, any
payment to the estate of ▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (or any trustee
or other legal representative on behalf of the legatees or heirs of such
Persons) on account of the repurchase or redemption of Voting Stock owned by
such estates (or trustees or legal representatives), solely from the net
proceeds of any life insurance maintained by the Company on either of such
Persons, shall not be a Restricted Payment and (iii) the declaration or making
of any dividend or any other payment or distribution with respect to the Capital
Stock of any Subsidiary of the Company and any payment on account of the
purchase, redemption, retirement or other acquisition for value of the Capital
Stock of any Subsidiary of the Company but, with respect to this clause (iii),
only to the extent such dividend, payment or distribution is received by an
Affiliate of the Company (other than (x) the Company or a Subsidiary of the
Company or (y) a Person that is an Affiliate of the Company solely because of
(A) the ownership of securities of such Person by the Company or its
Subsidiaries, (B) contractual arrangements between the Company and its
Subsidiaries and such Person or (C) a combination of (A) and (B)).
"SEC" means the Securities and Exchange Commission.
"Securities" means the securities, as amended or supplemented
from time to time, that are issued and outstanding under this Indenture.
"Senior Indebtedness" means all Obligations of the Company with
respect to the following, whether outstanding at the date of original execution
of this Indenture or thereafter incurred, created or assumed: (a) indebtedness
of the Company for money borrowed, including, without limitation, indebtedness
of the Company for money borrowed which is evidenced by notes, debentures, bonds
or other securities issued under the provisions of an indenture or other
instrument, and also including indebtedness represented by Purchase Money
Obligations, but only to the extent such indebtedness is enforceable by a money
judgment; (b) guarantees or assumptions by the Company of indebtedness of others
of any of the kinds described in the preceding clause (a); and (c) renewals,
extensions and refundings of, and indebtedness of a successor corporation issued
in exchange for or in replacement of, indebtedness, guarantees and assumptions
of the kinds described in the preceding clauses (a) or (b), unless, in the case
of any particular indebtedness, obligation, guarantee, assumption, renewal,
extension or refunding, the instrument creating or evidencing
-9-
the same expressly provides that such indebtedness, obligation, guarantee,
assumption, renewal, extension or refunding is not superior in right of payment
to the Securities; provided, that Senior Indebtedness shall not be deemed to
include (i) any indebtedness of the Company to any Subsidiary, (ii) any
liability for taxes, (iii) any amounts payable or other liabilities to trade
creditors arising in the ordinary course of business, (iv) any indebtedness
which is subordinate or junior by its terms to any other Indebtedness of the
Company, (v) the 10 3/8% Notes, (vi) the 8 1/4% Notes or (vii) the 5 1/4%
Debentures.
"Subsidiary" means a corporation or business trust a majority of
whose Voting Stock is owned by the Company or a Subsidiary.
"10 3/8% Notes" means the Company's 10 3/8% Senior Subordinated
Notes due 2002.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
▇▇.▇▇. 77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"Trust Officer" means any officer or assistant officer within the
corporate trust department of the Trustee assigned by the Trustee to administer
its corporate trust matters.
"United States" means the United States of America.
"U.S. Legal Tender" means such coin or currency of the United
States as at the time of payment shall be legal tender for the payment of public
and private debts.
"Voting Stock" with respect to any Person, means Capital Stock of
such Person having general voting power under ordinary circumstances to elect
directors to the board of directors of such Person, but shall not include any
Capital Stock that has or would have such voting power solely by reason of the
happening of any contingency.
-10-
"Wholly-Owned Subsidiary" means any Subsidiary in which the
Company or a Subsidiary owns all of the Capital Stock, other than directors
qualifying shares.
SECTION 1.02. Other Definitions.
Defined
Term in Section
---- ----------
"Bankruptcy Law"................................................ 5.01
"Certain Payment or
Investment Notice"............................................ 3.15
"Certain Payment or Investment
Payment Date"................................................. 3.15
"Change of Control"............................................. 3.11
"Change of Control Notice"...................................... 3.11
"Change of Control Payment Date"................................ 3.11
"Custodian"..................................................... 5.01
"Deficiency Date"............................................... 3.10
"Disposition"................................................... 3.11
"Event of Default".............................................. 5.01
"Legal Holiday"................................................. 10.08
"Offer"......................................................... 3.10
"Offer Amount".................................................. 3.10
"Offer Payment Date"............................................ 3.10
"Paying Agent".................................................. 2.03
"Recipient"..................................................... 3.11
"Registrar"..................................................... 2.03
"U.S. Government Obligations"................................... 7.01
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms, if used in this Indenture, have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a securityholder.
"indenture to be qualified" means this Indenture.
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"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company.
All other TIA terms used in this indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) any gender used in this Indenture shall be deemed to
include the neuter, masculine or feminine genders;
(6) provisions apply to successive events and
transactions; and
(7) "herein", "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other Subdivision.
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ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the certificate of authentication shall be
substantially in the form of Exhibit A. The provisions of Exhibit A are part of
this Indenture. The Securities may have notations, legends and endorsements
required by law, stock exchange rule or usage. The Company shall approve the
form of the Securities and any notation, legend or endorsement on them. Each
Security shall be dated the date of its authentication.
SECTION 2.02. Execution and Authentication.
One Officer and the Secretary or an Assistant Secretary of the
Company shall sign the Securities for the Company by facsimile signature. The
Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall be
valid nevertheless.
A Security shall not be valid until the Trustee or an
authenticating agent manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate
Securities for original issue in the aggregate principal amount of $135,000,000,
upon a written order of the Company signed by two Officers or by an Officer and
the Secretary or an Assistant Secretary of the Company. The aggregate principal
amount of Securities outstanding at any time may not exceed $135,000,000, except
as provided in Section 2.07.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so except on original issuance. Each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
its Affiliates.
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The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities
may be presented for registration of transfer or for exchange (the "Registrar")
and an office or agency where Securities may be presented for payment (the
"Paying Agent"). The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company may have one or more co-registrars and
one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. Such agency agreement shall provide for
reasonable compensation for such services. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any such Agent and shall furnish the
Trustee with an executed counterpart of any such agency agreement. If the
Company fails to maintain or act as Registrar or Paying Agent, the Trustee shall
act as such and shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be
maintained by the Company in the Borough of Manhattan, The City of New York. The
Company initially designates the Trustee as the Registrar and Paying Agent.
SECTION 2.04. Paying Agent To Hold Money in Trust.
On or prior to each due date of the principal and interest on any
Security, the Company shall deposit with the Paying Agent immediately available
funds sufficient to pay such principal and interest becoming due. The Company
shall require each Paying Agent other than the Trustee to hold in trust for the
benefit of Securityholders or the Trustee all money held by such Paying Agent
for the payment of principal or interest on the Securities, and shall notify the
Trustee of any Default by the Company in making any such payment. While any such
Default continues, the Trustee may require the Paying Agent to pay all money
held by it to the Trustee. Except as provided in the immediately preceding
sentence, the Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon doing so, such Paying Agent (other than the
Company
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or a Subsidiary) shall have no further liability for the money. If the Company
acts as Paying Agent, it shall segregate and hold as separate trust funds all
money held by it as Paying Agent.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders and shall otherwise comply with TIA ss. 312(a). If the Trustee
is not the Registrar, the Company shall furnish or cause to be furnished to the
Trustee on or before each semiannual interest payment date and at such other
times as the Trustee may request in writing a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders, and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. Transfer and Exchange.
When a Security is presented to the Registrar or a co-registrar
with a request to register a transfer, the Registrar shall register the transfer
as requested if the requirements of the Registrar are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the requirements of the Registrar are
met. The Company shall cooperate with the Registrar in meeting its requirements.
To permit transfers, registration and exchanges, the Trustee shall authenticate
Securities at the Registrar's request. The Company may charge a reasonable fee
for any transfer, registration or exchange and may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto, but not for any exchange pursuant to Sections 2.09 or 8.05.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the requirements of the Trustee are met. An indemnity
bond may be required by the Trustee or the Company that is sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee or
any Agent from any loss which any
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of them may suffer if a Security is replaced. The Company may charge for its
expenses in replacing a Security.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 10.06, a Security does not cease to be
outstanding because the Company or one of its Subsidiaries or Affiliates holds
the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If any Paying Agent (other than the Company or a Subsidiary)
holds on the maturity date money received by the Paying Agent pursuant to this
Indenture and sufficient to pay the principal and interest on Securities payable
on that date, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate the temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities surrendered to it.
SECTION 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for transfer, exchange or payment. The Trustee
and no one else shall cancel all Securities surrendered for registration,
transfer, exchange, payment or cancellation and shall destroy cancelled
Securities unless the Company directs their return to the Company. The Company
may not issue new Securities to
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replace Securities that it has paid or delivered to the Trustee for
cancellation.
SECTION 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest plus any interest payable on the
defaulted interest to the persons who are Securityholders on a subsequent
special record date. The Company shall fix the record date and payment date. At
least 10 days before the record date, the Company shall mail to each
Securityholder a notice that states the record date, the payment date, and the
amount of defaulted interest to be paid. The Company may pay defaulted interest
in any other lawful manner.
ARTICLE THREE
COVENANTS
SECTION 3.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities. An
installment of principal or interest shall be considered paid on the date it is
due if the Trustee or Paying Agent holds such installment in immediately
available funds at 9:00 A.M. on the date such installment is due.
The Company shall pay interest on overdue principal at the rate
borne by the Securities; it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 3.02. SEC Reports.
(a) The Company shall file with the Trustee within 15 days after
it files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the
Company is not subject to the requirements of such Section 13 or 15(d) of the
Exchange Act, the Company shall continue to file with the Trustee on the same
timely basis such reports, information and other documents as
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it would file if it were subject to the requirements of Section 13 or 15(d) of
the Exchange Act. The Company also shall comply with the other provisions of TIA
ss. 314(a).
(b) So long as any of the Securities remain outstanding, the
Company shall cause each annual, quarterly and other financial report mailed or
otherwise furnished by it generally to stockholders to be filed with the Trustee
and mailed to the Holders at their addresses appearing in the register of
Securities maintained by the Registrar, in each case at the time of such mailing
or furnishing to stockholders. If the Company is not required to furnish annual
or quarterly reports to its stockholders pursuant to the Exchange Act, the
Company shall cause its financial statements, including any notes thereto and,
with respect to annual reports, an auditors' report by an accounting firm of
established national reputation and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," comparable to that which would
have been required to appear in annual or quarterly reports filed under Section
13 or 15(d) of the Exchange Act, to be so filed with the Trustee within 120 days
after the end of each of the Company's fiscal years and within 60 days after the
end of each of the first three quarters of each such fiscal year and, after the
date such reports are so required to be filed with the Trustee, to be furnished
to any Holder upon such Holder's request.
(c) The Company shall provide the Trustee with a sufficient
number of copies of all reports and other documents and information that the
Trustee may be required to deliver to Securityholders under this Section 3.02.
SECTION 3.03. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company (which as of the date of this
Indenture is December 31) an Officers' Certificate stating whether or not the
signers know of any Default or Event of Default. If they do know of such a
Default or Event of Default, the certificate shall describe the Default or Event
of Default and efforts to remedy the same. The Company shall notify the Trustee
within 10 days following the occurrence thereof of any acceleration which is an
Event of Default within the meaning of Section 5.01(4).
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SECTION 3.04. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City
of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment 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 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
address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 3.05. Corporate Existence.
Subject to Article Four, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Material
Subsidiary in accordance with the respective organizational documents of each
Material Subsidiary and the rights (charter and statutory) and material
franchises of the Company and the Material Subsidiaries; provided, that the
Company shall not be required to preserve any such right or franchise, or the
corporate existence of any Material Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not, and will not be,
adverse in any material respect to the Holders.
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SECTION 3.06. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company from paying
all or any portion of the principal of and/or interest on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company 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 3.07. Transactions with Affiliates.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, enter into any transaction or series of related
transactions with any Affiliate (other than (a) with the Company or a
Wholly-Owned Subsidiary or (b) the making of a Restricted Payment or Restricted
Investment otherwise permitted by Section 3.09), including, without limitation,
any loan, advance or investment or any purchase, sale, lease or exchange of
property or the rendering of any service, unless such transaction or series of
transactions is in good faith and at arm's-length and on terms which are at
least as favorable as those available in a comparable transaction from an
unrelated Person. Any such transaction that involves in excess of $10,000,000
shall be approved by a majority of the Independent Directors on the Board of
Directors of the Company; or, in the event that at the time of any such
transaction or series of related transactions there are no Independent Directors
serving on the Board of Directors of the Company, such transaction or series of
related transactions shall be approved by a nationally recognized expert with
experience in appraising the terms and conditions of the type of transaction for
which approval is required.
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SECTION 3.08. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create or otherwise cause to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary to (a) pay
dividends or make any other distributions on its Capital Stock or any other
interest or participation in, or measured by, its profits, owned by the Company
or any Subsidiary, or pay any Indebtedness owed to the Company or any
Subsidiary, (b) make loans or advances to the Company or any Subsidiary or (c)
transfer any of its properties or assets to the Company, except for such
encumbrances or restrictions existing under or by reasons of (i) applicable law,
(ii) this Indenture, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Company or any
Subsidiary, (iv) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than such Person and its Subsidiaries, or the
property or assets of such Person and its Subsidiaries, so acquired, (v)
Indebtedness existing on the date of this Indenture and any refinancing of such
existing Indebtedness so long as the terms and conditions of any such
refinancing agreements are no less favorable to the Company than those contained
in the agreements governing the Indebtedness being refinanced or (vi) other
Indebtedness; provided, that the Board of Directors of the Company shall have
concluded, in good faith, that the terms thereof do not have a materially
adverse effect on the Company, on a stand-alone basis, or the Company's ability,
on a stand-alone basis, to meet its obligations.
SECTION 3.09. Limitation on Restricted Payments
and Restricted Investments.
The Company shall not, and shall not permit any Subsidiary to,
make, directly or indirectly, any Restricted Payment or Restricted Investment
if, immediately after giving effect to such Restricted Payment or Restricted
Investment, as the case may be: (a) a Default or Event of Default shall have
occurred and be continuing, (b) the Company's Consolidated Tangible Net Worth
would be less than $250,000,000, (c) the Company would not be permitted to incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 3.12(a) hereof or (d) the sum of (x) the aggregate amount
expended for all Restricted Payments subsequent to March 31, 1992 and (y) the
aggregate amount of Restricted
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Investments made subsequent to March 31, 1992 and then outstanding reduced by
any write down of any such Restricted Investment to the extent that such write
down otherwise reduced Consolidated Net Income (the amount so expended for a
Restricted Payment or a Restricted Investment, if other than in cash, to be
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution) would exceed the sum of (1)
$35,000,000, (2) 50% of the aggregate Consolidated Net Income of the Company (or
minus 100% of the aggregate Consolidated Net Loss of the Company) accrued on a
cumulative basis subsequent to March 31, 1992, and (3) the aggregate net
proceeds, including the fair value of property other than cash (as determined by
the Board of Directors of the Company, whose determination shall be conclusive
and evidenced by a Board Resolution), received by the Company in respect of the
issue or sale subsequent to March 31, 1992 of (i) any shares of Capital Stock of
the Company, or (ii) any Indebtedness of the Company to the extent converted
into or exchanged for Capital Stock of the Company subsequent to March 31, 1992.
This Section 3.09 shall not prevent (x) the payment of any dividend or
distribution within 60 days after the date of declaration thereof, if at such
date of declaration such payment complied with the foregoing provisions, or (y)
the retirement of any shares of the Company's Capital Stock by exchange for, or
upon conversion of, or out of the proceeds of the substantially concurrent sale
(other than to a Subsidiary) of, other shares of the Capital Stock of the
Company, and neither such retirement, exchange or conversion nor the proceeds of
any such sale shall be included in any computation made under this Section 3.09.
SECTION 3.10. Maintenance of Consolidated Tangible Net Worth.
(a) If, on the last day of each of any two consecutive fiscal
quarters of the Company (the last day of the second such fiscal quarter being
referred to as the "Deficiency Date"), the Company's Consolidated Tangible Net
Worth is less than the Minimum Tangible Net Worth, then the Company shall, no
later than 65 days after each such Deficiency Date (110 days if such Deficiency
Date is the last day of the Company's fiscal year), make an offer to all Holders
to purchase (an "Offer") 10% of the aggregate principal amount of Securities
originally issued (the "Offer Amount") at a purchase price of 100% of the
principal amount of such Securities, plus accrued interest to the date of
purchase. The Offer shall remain open for a period of 20 business days following
its commencement (unless required to remain open for a longer period by
applicable law) and the
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Company shall purchase for cash the Offer Amount of Securities on a designated
date (the "Offer Payment Date") no later than five business days after the
termination of the Offer or, if less than the Offer Amount has been tendered,
all Securities then tendered; provided, however, that the Company shall not be
obligated to purchase any of such Securities unless Holders of at least 10% of
the Offer Amount of Securities shall have tendered and not subsequently
withdrawn their Securities for repurchase. If the aggregate principal amount of
Securities tendered to the Company exceeds the Offer Amount, the Company shall
purchase the Securities tendered to it pro rata among such Securities tendered
(with such adjustments as may be appropriate so that only Securities in
denominations of $1,000 and integral multiples thereof shall be purchased). The
Company shall comply with all applicable Federal and state securities laws in
connection with each Offer. In no event shall the failure of the Company's
Consolidated Tangible Net Worth to equal or exceed the Minimum Tangible Net
Worth at the end of any fiscal quarter be counted toward the making of more than
one Offer.
(b) The Company may reduce the principal amount of Securities to
be purchased pursuant to the Offer by subtracting 100% of the principal amount
of Securities acquired by the Company subsequent to the Deficiency Date through
purchase (otherwise than pursuant to this Section 3.10 or Section 3.11 or 3.15
hereof) or exchange, and surrendered for cancellation. The Company, however, may
not credit Securities that have been previously used as a credit against any
obligation to repurchase Securities pursuant to this Section 3.10. The Company
shall notify the Trustee prior to the making of any Offer whether the Company
elects to reduce the principal amount of Securities to be purchased pursuant to
an Offer as provided above and set forth the amount of the credit and the basis
provided above for such credit (including identification of any previously
cancelled Securities not theretofore made the basis for the credit), and shall
deliver such Securities with such notice.
(c) The Company shall furnish the Trustee with an Officers'
Certificate (upon which the Trustee may conclusively rely) notifying the Trustee
that Consolidated Tangible Net Worth has declined below the Minimum Tangible Net
Worth at the end of any fiscal quarter in which Consolidated Tangible Net Worth
has so declined, if such quarter is one of the first three quarters of any
fiscal year of the Company, within 55 days after the end of such quarter and, if
such quarter is the fourth quarter of any fiscal year of the Company, within 100
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days after the end of such fiscal year; provided, that the Trustee shall receive
such Officers' Certificate at least 15 days prior to any Offer pursuant to
Section 3.10(a) and any Notice of Offer pursuant to Section 3.10(d). The Trustee
shall notify the Holders within 10 days after it receives each such notice.
Failure to give such notice shall not affect the obligations of the Company
pursuant to this Section 3.10.
(d) Notice of an Offer shall be prepared and sent, by first class
mail, by the Company to all Holders not less than 30 days nor more than 60 days
before the Offer Payment Date at their last registered address. The notice shall
be accompanied by a copy of the information regarding the Company required to be
contained in a Quarterly Report filed pursuant to the Exchange Act on Form 10-Q
(x) for the Company's first fiscal quarter if the Deficiency Date is the last
day of the Company's second fiscal quarter, (y) for the Company's second fiscal
quarter if the Deficiency Date is the last day of the Company's third fiscal
quarter or (z) for the Company's third fiscal quarter if the Deficiency Date is
the last day of the Company's last fiscal quarter. If the Deficiency Date is the
last day of the Company's first fiscal quarter, a copy of the information
required to be contained in an Annual Report to Shareholders pursuant to Rule
14a-3 under the Exchange Act for the fiscal year ending immediately prior to
such Deficiency Date, if available, and in an Annual Report filed pursuant to
the Exchange Act on Form 10-K for such fiscal year shall accompany the notice.
If the Company is not subject to the requirements of Section 13 or 15(d) of the
Exchange Act, the notice shall be accompanied by financial statements, including
any notes thereto (and, in the case of a fiscal year end, an auditors' report of
a firm of established national reputation reasonably satisfactory to the
Trustee), comparable to that which the Company would have been required to
include in such Quarterly Reports or Annual Report to Shareholders, as the case
may be. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Offer. The notice,
which shall govern the terms of the Offer, shall state:
(1) that the Offer is being made pursuant to this
Section 3.10;
(2) the Offer Amount, the purchase price (including the
amount of accrued interest) and the Offer Payment Date;
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(3) whether the Company has elected to reduce the principal
amount of Securities to be purchased pursuant to an Offer, and has
delivered to the Trustee for cancellation the Securities that are to be
made the basis for such reduction and, if so, the amount of such
Securities;
(4) that any Security not tendered or accepted for
payment will continue to accrue interest;
(5) that any Security accepted for payment pursuant to the Offer
becomes due and payable on the Offer Payment Date, and that, unless the
Company defaults in making payment therefor (including, without
limitation, if such default results because such payment is prohibited
pursuant to Article Nine hereof), such Security shall cease to accrue
interest after the Offer Payment Date;
(6) that Holders electing to have a Security purchased pursuant
to an Offer will be required to surrender the Security, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed and, if the Offer Payment Date falls between any
record date for the payment of interest on the Securities and the next
succeeding interest payment date, an amount equal to the interest which
the Holder is entitled to receive on such interest payment date to the
Paying Agent at the address specified in the notice at least five days
before the Offer Payment Date;
(7) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than one business day prior to the
Offer Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount and
certificate numbers of the Securities the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have the
Security purchased;
(8) that if Securities in a principal amount in excess of the
Offer Amount are tendered and not withdrawn pursuant to the Offer, the
Company shall purchase Securities on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000 or integral multiples of $1,000
shall be acquired); and
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(9) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
Before an Offer Payment Date, the Company shall (i) accept for
payment Securities or portions thereof tendered pursuant to the Offer (on a pro
rata basis if required pursuant to paragraph (8) above), (ii) deposit with the
Paying Agent U.S. Legal Tender and Securities, if any, acquired in the manner
described in clause (b), above, sufficient to pay the purchase price of all
Securities or portions thereof so accepted or to be credited against the Offer
Amount and (iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail or deliver to
Holders of Securities so accepted payment in an amount equal to the purchase
price, and the Company shall execute and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security equal in principal amount to
any unpurchased portion of the Security surrendered. Any Securities not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Offer as soon as
practicable on or after the Offer Payment Date. For purposes of this Section
3.10, the Trustee shall act as the Paying Agent.
SECTION 3.11. Change of Control.
(a) In the event of any Change of Control, each Holder shall have
the right, at such Holder's option, to require the Company to purchase all or
any portion (in integral multiples of $1,000) of such Holder's Securities on the
date (the "Change of Control Payment Date") which is 20 business days after the
date the Change of Control Notice (as defined below) is mailed (or such later
date as is required by applicable law) at 101% of the principal amount thereof,
plus accrued interest to the Change of Control Payment Date; provided, that the
Company shall not be obligated to purchase any of such Securities unless Holders
of at least 10% of the Securities outstanding at the Change of Control Payment
Date (other than Securities held by the Company and its Affiliates) shall have
tendered their Securities for repurchase. In addition, in the event of any
Change of Control, the Company will not, and will not permit any Subsidiaries
to, purchase or redeem any Indebtedness ranking junior to the Securities
pursuant to any
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analogous provisions prior to the Change of Control Payment Date.
(b) The Company, or at the request of the Company, the Trustee,
shall send, by first-class mail, postage prepaid, to all Holders, within five
business days after the occurrence of each Change of Control, a notice of the
occurrence of such Change of Control (the "Change of Control Notice"),
specifying a date by which a Holder must notify the Company of such Holder's
intention to exercise the repurchase right and describing the procedure that
such Holder must follow to exercise such right. The Company is required to
deliver a copy of such notice to the Trustee and to cause a copy of such notice
to be published in a daily newspaper of national circulation.
Each Change of Control Notice shall state:
(1) the Change of Control Payment Date;
(2) the date by which the repurchase right must be
exercised;
(3) the price at which the repurchase is to be made, if
the repurchase right is exercised; and
(4) a description of the procedure which the Holder must follow
to exercise a repurchase right.
No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise a repurchase right. The Company shall
comply with all applicable Federal and state securities laws in connection with
each Change of Control Notice.
(c) To exercise the repurchase right, the Holder shall deliver,
on or before the fifth calendar day prior to the Change of Control Payment Date,
written notice (which shall be irrevocable) to the Company (or an agent
designated by the Company for such purpose) of the Holder's exercise of such
right, together with (i) the Security or Securities with respect to which the
right is being exercised, duly endorsed for transfer, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Security completed,
and (ii) if the Change of Control Payment Date falls between any record date for
the payment of interest on the Securities and the next succeeding interest
payment date, an amount equal to the interest which
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the Holder is entitled to receive on such interest payment date.
(d) A "Change of Control" shall be deemed to occur if (i) the
Company has any other Indebtedness outstanding (other than Indebtedness under a
bank credit agreement or similar bank financing) which provides for a Change of
Control (as defined in the instrument governing such Indebtedness) if ▇▇▇ ▇.
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ceases to beneficially own, in the aggregate, a
certain percentage of the outstanding Common Shares, which percentage ownership
requirement is in excess of 10%, and a Change of Control (as defined in the
instrument governing such Indebtedness) occurs under such Indebtedness or (ii)
at any time when the Company does not have any other Indebtedness outstanding of
the type referred to in clause (i), ▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
individually or in the aggregate, sells, transfers or otherwise disposes of (a
"Disposition"), after the date hereof, Common Shares so that, after giving
effect thereto, the sole beneficial ownership of outstanding Common Shares by
▇▇. ▇▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇▇▇▇ would, in the aggregate, fall below 10% of the
then outstanding Common Shares; provided, that no Change of Control shall be
deemed to have occurred under clause (ii) if the Securities are rated by ▇▇▇▇▇'▇
or S&P as Investment Grade both at the time of such Disposition and for a period
of 90 days from the date of such Disposition (it being understood that, with
respect to the foregoing proviso, a Change of Control shall be deemed to occur
on the first date during such 90-day period when the Securities are rated below
Investment Grade by both ▇▇▇▇▇'▇ and S&P). The term "Common Shares" shall
include any securities issued as dividends or distributions on the Common
Shares. For purposes hereof, "sole beneficial ownership" of Common Shares shall
be deemed to include (i) all Common Shares received after June 15, 1992 from ▇▇.
▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇ by any member of their respective immediate families or
by any trust for the benefit of either of them or any member of their respective
immediate families (a "Recipient"), which Common Shares remain held by a
Recipient during the lifetime of ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇ (unless sold,
transferred or disposed of by such Recipient during the lifetime of ▇▇. ▇▇▇▇▇▇▇
or ▇▇. ▇▇▇▇▇▇▇▇▇, as the case may be, in which case such Disposition by such
Recipient shall constitute a Disposition by ▇▇. ▇▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇, as the
case may be) and (ii) after the death of ▇▇. ▇▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇▇▇▇, all
Common Shares owned as of the date of death by the decedent, and any Recipient
of the decedent, regardless of whether such Recipient continues to own such
Common Shares after the date of death. In determining the number of
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outstanding Common Shares then held by Messrs. Cumming and ▇▇▇▇▇▇▇▇▇ and the
total number of outstanding Common Shares, there shall be excluded Common Shares
issued by the Company after December 31, 1991, or the conversion into or
exchange for, after December 31, 1991, Common Shares or securities convertible
into or exchangeable for Common Shares.
SECTION 3.12. Limitation on Incurrence of Additional Indebtedness
by the Company and on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock by Its
Subsidiaries.
(a) The Company shall not, and shall not permit any Subsidiary
to, create, incur, assume, or guarantee the payment of any Indebtedness, and
shall not permit any of its Subsidiaries to issue any Preferred Stock, if, at
the time of such event and after giving effect thereto on a pro forma basis, the
Company's ratio of Consolidated Debt to Consolidated Tangible Net Worth, as of
the most recent date for which consolidated financial statements are available
and adjusted for the incurrence of all Indebtedness and the issuance of all
Preferred Stock by Subsidiaries (other than Permitted Indebtedness) since that
date, would be greater than 1.75 to 1.
(b) Paragraph (a) of this Section 3.12 shall not preclude the
incurrence of Permitted Indebtedness.
SECTION 3.13. Limitation on Issuance of
Other Subordinated Debt.
The Company shall not issue, assume, guarantee, incur or
otherwise become liable, directly or indirectly, for any Indebtedness
subordinate or junior in ranking in any respect to any Senior Indebtedness but
senior in right of payment to the Securities.
SECTION 3.14. Restriction on Investments
by Insurance Subsidiaries.
The Company shall not permit any Subsidiary which is an insurance
company to make, directly or indirectly, any Investment other than in Investment
Grade Securities if, after giving effect thereto at the time of such Investment,
less than 80% of the aggregate Investments of such insurance company would
consist of Investment Grade Securities, valuing
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Investments for purposes of this restriction at original cost. The foregoing
restriction shall not (i) apply to Investments in the Company or any Subsidiary
of the Company, (ii) prevent the Company or its Subsidiaries from acquiring the
Capital Stock of, or all or substantially all of the assets of, an insurance
company or (iii) apply to securities issued in a restructuring or exchange offer
or similar transaction offered generally to all holders of another security then
held by such Subsidiary.
SECTION 3.15. Limitation on Certain Payments
or Investments.
(a) In the event of any Certain Payment or Investment, each
Holder shall have the right, at such Holder's option, to require the Company to
purchase all or any portion (in integral multiples of $1,000) of such Holder's
Securities on the date (the "Certain Payment or Investment Payment Date") which
is 20 business days after the date the Certain Payment or Investment Notice (as
defined below) is mailed (or such later date as is required by applicable law)
at 101% of the principal amount thereof, plus accrued interest to the Certain
Payment or Investment Payment Date; provided, that the Company shall not be
obligated to purchase any of such Securities unless Holders of at least 10% of
the Securities outstanding at the Certain Payment or Investment Payment Date
(other than Securities held by the Company and its Affiliates) shall have
tendered their Securities for repurchase. In addition, in the event of any
Certain Payment or Investment, the Company will not, and will not permit any
Subsidiaries to, purchase or redeem any Indebtedness ranking junior to the
Securities pursuant to any analogous provisions on or prior to the Certain
Payment or Investment Payment Date.
(b) The Company, or at the request of the Company, the Trustee,
shall send, by first-class mail, postage prepaid, to all Holders, within five
business days after the occurrence of each Certain Payment or Investment, a
notice of the occurrence of such Certain Payment or Investment (the "Certain
Payment or Investment Notice"), specifying a date by which a Holder must notify
the Company of such Holder's intention to exercise the repurchase right and
describing the procedure that such Holder must follow to exercise such right.
The Company is required to deliver a copy of such notice to the Trustee and to
cause a copy of such notice to be published in a daily newspaper of national
circulation.
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Each Certain Payment or Investment Notice shall state:
(1) the Certain Payment or Investment Payment Date;
(2) the date by which the repurchase right must be
exercised;
(3) the price at which the repurchase is to be made, if
the repurchase right is exercised; and
(4) a description of the procedure which the Holder must follow
to exercise a repurchase right.
No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise a repurchase right. The Company shall
comply with all applicable Federal and state securities laws in connection with
each Certain Payment or Investment Notice.
(c) To exercise the repurchase right, the Holder shall deliver,
on or before the fifth calendar day prior to the Certain Payment or Investment
Payment Date, written notice (which shall be irrevocable) to the Company (or an
agent designated by the Company for such purpose) of the Holder's exercise of
such right, together with (i) the Security or Securities with respect to which
the right is being exercised, duly endorsed for transfer, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Security completed,
and (ii) if the Certain Payment or Investment Payment Date falls between any
record date for the payment of interest on the Securities and the next
succeeding interest payment date, an amount equal to the interest which the
Holder is entitled to receive on such interest payment date.
ARTICLE FOUR
SUCCESSOR CORPORATION
SECTION 4.01. When Company May Merge, etc.
The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets (it
being understood that a sale of less than 90% of the Company's total assets
shall not be deemed a sale of substantially all of the Company's assets),
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in one transaction or a series of related transactions, to any Person unless:
(1) the Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, lease,
conveyance or other disposition shall have been made, is a corporation
organized and existing under the laws of the United States, any state
thereof or the District of Columbia;
(2) the corporation formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, lease,
conveyance or other disposition shall have been made, assumes by
supplemental indenture in a form satisfactory to the Trustee all the
obligations of the Company under the Securities and this Indenture;
(3) immediately before and immediately after such
transaction no Default or Event of Default exists;
(4) the Company or any corporation formed by or surviving any
such consolidation or merger, or to which such sale, lease, conveyance
or other disposition shall have been made, would be permitted by the
provisions of Section 3.12(a) to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness); and
(5) the Company or any corporation formed by or surviving any
such consolidation or merger, or to which such sale, lease, conveyance
or other disposition shall have been made, shall immediately thereafter
have a Consolidated Net Worth (after purchase accounting adjustments) at
least equal to the Consolidated Net Worth of the Company immediately
preceding such transaction.
The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental Indenture comply with this Indenture.
SECTION 4.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company in
accordance with Section 4.01, the successor corporation formed by such
consolidation or into
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which the Company is merged or to which such sale, lease, conveyance or other
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect
as if such successor corporation had been named as the Company herein.
ARTICLE FIVE
DEFAULTS AND REMEDIES
SECTION 5.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on
any Security when the same becomes due and payable and such
default continues for a period of 30 days (and whether or not
such payment would be subject to Article Nine);
(2) the Company defaults in the payment of the principal
(including premium, if any) of any Security when the same becomes due
and payable at maturity or otherwise (and whether or not such payment
would be subject to Article Nine);
(3) the Company fails to comply with any of its other agreements
in the Securities or this Indenture and such default continues for the
period and after the notice specified below;
(4) the Company or any Material Subsidiary either (A) defaults in
the payment when due of principal of, interest on, or other amounts
payable in respect of, or (B) fails to perform or comply with any of its
other agreements in respect of, any of its respective Indebtedness
(other than the Securities) in the aggregate principal or like amount of
$15,000,000 or more, and such Indebtedness shall be or shall have been
declared to be due and payable immediately, and such acceleration shall
not have been rescinded or annulled;
(5) the Company or any Material Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
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(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors, or
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief (with respect to the petition commencing
such case) against the Company or any Material Subsidiary in an
involuntary case or proceeding,
(B) appoints a Custodian of the Company or any
Material Subsidiary or for all or substantially all of
its respective property, or
(C) orders the liquidation of the Company or any
Material Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
A Default under clause (3) of this Section 5.01 is not an Event
of Default until the Trustee or the Holders of at least 25% in principal amount
of the Securities notify the Company of the Default and the Company does not
cure the Default within 30 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default."
SECTION 5.02. Acceleration.
If an Event of Default (other than an Event of Default with
respect to the Company specified in clause (5) or (6) of Section 5.01) occurs
and is continuing, the Trustee by
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notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding by notice to the Company and the
Trustee, may declare the principal of, and the accrued interest on, all of the
Securities then outstanding due and payable immediately. Upon such declaration
such principal and interest shall be due and immediately payable.
If an Event of Default with respect to the Company specified in
clause (5) or (6) of Section 5.01 occurs, all unpaid principal of and accrued
interest on the Securities then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
Notwithstanding anything to the contrary in the preceding two
paragraphs, the Holders of a majority in principal amount of the Securities then
outstanding by notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default have been cured or waived and if
the rescission would not conflict with any judgment or decree. When a Default or
Event of Default is cured or waived, it ceases to exist.
SECTION 5.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 5.04. Waiver of Past Defaults.
Subject to Sections 5.07 and 8.02, the Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and
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its consequences, except a Default or Event of Default in payment of principal
of, or interest on, any Security.
SECTION 5.05. Control by Majority.
The Holders of a majority in principal amount of the Securities
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that is unduly prejudicial to the rights of another
Securityholder, as such, or that would involve the Trustee in personal
liability.
SECTION 5.06. Limitation on Remedies.
Except as provided in Section 5.07, a Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the Securities make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with the request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Securities.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
other Securityholders.
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SECTION 5.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Security as set forth in this Indenture to receive payment of
principal of and interest on the Security, on or after the respective due dates
expressed in the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 5.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal
specified in Section 5.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remaining unpaid and such
further amounts as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation and expenses of the Trustee,
its agents and counsel.
SECTION 5.09. Trustee May File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Securityholders allowed in any judicial proceedings relative to
the Company, its creditors or its property.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 5.10. Priorities.
If the Trustee collects any money pursuant to this Article Five,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section
6.07;
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Second: to Holders of Senior Indebtedness to the extent
required by Article Nine;
Third: to Securityholders for amounts due and unpaid on
the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Fourth: To the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 5.10.
SECTION 5.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 5.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 5.07, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
ARTICLE SIX
TRUSTEE
SECTION 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of
Default:
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(1) The Trustee need perform only those duties that are
specifically set forth (or incorporated by reference) in this Indenture
and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine such certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph (c) does not limit the effect of
paragraph (b) of this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.05, and the Trustee shall be
entitled from time to time to request such a direction.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall be under no obligation and may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 6.02. Rights of Trustee.
Subject to Section 6.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee may rely on and shall be protected in acting or refraining from
acting upon any document believed by it to be genuine and to have been
signed or presented by the proper person. 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 or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney, to the
extent reasonably required by such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers.
SECTION 6.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Subsidiaries or Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 6.10 and 6.11.
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SECTION 6.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 6.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Securityholder pursuant to Section 10.02
a notice of the Default within 90 days after it occurs. Except in the case of a
Default in any payment on any Security, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 6.06. Reports by Trustee to Holders.
Within 60 days after each May 15, beginning with May 15, 1997,
the Trustee shall mail to each Securityholder a brief report dated as of such
May 15 that complies with TIA ss. 313(a), but only if such report is required in
any year under TIA ss. 313(a). The Trustee also shall comply with TIA ▇▇.▇▇.
313(b) and 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which the
Securities are listed. The Company shall notify the Trustee in writing if the
Securities become listed on any national securities exchange or of any delisting
thereof.
SECTION 6.07. Compensation and Indemnity.
The Company shall pay the Trustee from time to time reasonable
compensation for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances incurred by it. Such expenses
shall include the reasonable compensation and expenses of the Trustee's agents
and counsel.
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The Trustee shall not be under any obligation to institute any
suit, or take any remedial action under this Indenture, or to enter any
appearance or in any way defend any suit in which it may be a defendant, or to
take any steps in the execution of the trusts created hereby or thereby or in
the enforcement of any rights and powers under this Indenture, until it shall be
indemnified to its satisfaction against any and all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture, including compensation for services, costs,
expenses, outlays, counsel fees and other disbursements, and against all
liability not due to its negligence or willful misconduct. The Company shall
indemnify the Trustee against any loss or liability incurred by it in connection
with the acceptance and administration of the trust and its duties hereunder as
Trustee, Registrar and/or Paying Agent, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity;
however, unless the position of the Company is prejudiced by such failure, the
failure of the Trustee to promptly notify the Company shall not limit its right
to indemnification. The Company shall defend each such claim and the Trustee
shall cooperate in the defense. The Trustee may retain separate counsel and the
Company shall reimburse the Trustee for the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or willful
misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to that of the Holders of the Securities on all
money or property held or collected by the Trustee, except that held in trust to
pay principal and interest on particular Securities.
When the Trustee incurs expenses or renders services after the
occurrence of any Event of Default specified in Sections 5.01(5) or (6), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy law.
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SECTION 6.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders
of a majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee in writing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting as Trustee
hereunder.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 6.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Securityholder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a
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successor Trustee. Any successor Trustee shall comply with TIA ss. 310(a)(5).
SECTION 6.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the successor corporation without any further act shall be the
successor Trustee; provided such corporation or association shall be otherwise
eligible and qualified under this Article.
SECTION 6.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall also comply with TIA ss.
310(b).
SECTION 6.11. Preferential Collection of
Claims Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE SEVEN
DISCHARGE OF INDENTURE
SECTION 7.01. Termination of Company's Obligations.
The Company may terminate all of its obligations under the
Securities and this Indenture if:
(a) all Securities previously authenticated and delivered (other
than destroyed, lost or stolen Securities which have been replaced or
paid) have been delivered to the Trustee for cancellation and the
Company has been paid all sums payable by it hereunder; or
(b) (1) the Securities mature within one year, and
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(2) the Company irrevocably deposits in trust with
the Trustee immediately available funds or U.S. Government
Obligations sufficient to pay principal and interest on the Securities
to maturity.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
6.07 and 6.08 shall survive until the Securities are no longer outstanding.
Thereafter the Company's obligations in Section 6.07 shall survive.
Upon receipt, in the case of (a) or (b) above in this Section
7.01, by the Trustee of an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
In order to have money available on a payment date to pay
principal or interest on the Securities, the U.S. Government Obligations shall
be payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
The term "U.S. Government Obligations" means direct obligations
of the United States for the payment of which the full faith and credit of the
United States is pledged.
SECTION 7.02. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 7.01. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
and interest on the Securities. Money and securities so held in trust are not
subject to the subordination provisions of Article Nine and need not be
segregated from other funds except to the extent required by law.
SECTION 7.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall
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pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for two years; provided, however,
that the Trustee or such Paying Agent before being required to make any such
repayment, may at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York or mail to each such
Holder notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing any unclaimed balance of such money then remaining will be paid to
the Company.
SECTION 7.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 7.01 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 7.01 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
7.01; provided, however, that if the Company has made any payment of interest on
or principal of any Securities because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE EIGHT
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders.
The Company may amend or supplement this Indenture or the
Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 4.01;
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(3) to provide for uncertificated Securities in addition
to certificated Securities;
(4) to comply with any requirements of the SEC in order
to effect or maintain the qualification of this Identure under
the TIA; or
(5) to make any change that would provide any additional benefit
or rights to the Securityholders or that does not adversely affect the
rights of any Securityholder.
Notwithstanding the above, the Trustee and the Company may not
make any change that adversely affects the legal rights of any Securityholders
hereunder.
SECTION 8.02. With Consent of Holders.
Subject to Section 5.07, the Company, when authorized by a
resolution of its Board of Directors, may amend or supplement this Indenture or
the Securities with the written consent of the Holders of at least a majority in
principal amount of the Securities then outstanding, and the Holders of a
majority in principal amount of the Securities may waive compliance by the
Company with any provision of this Indenture or the Securities. However, without
the consent of each Securityholder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 5.04, may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change or extend the time for
payment of principal of or interest on any Security;
(3) reduce the principal of or change the fixed maturity
of any Security;
(4) waive a default in the payment of the principal of
or interest on any Security;
(5) make any Security payable in money other than that
stated in the Security;
(6) make any change in the subordination of the
Securities in a manner that is adverse to the Holders; or
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(7) make any change in this Section, Section 5.04 or
Section 5.07.
Notwithstanding the above and Section 5.07, the Holders of a
majority in principal amount of the Securities then outstanding may waive
compliance by the Company with Sections 3.10 and 3.11 of this Indenture.
It shall not be necessary for the consent of the Holders under
this Section 8.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof. Any amendment, waiver or consent shall be deemed effective
upon receipt by the Trustee of the necessary consents and shall not require
execution of any supplemental indenture to be effective.
After an amendment or waiver under this Section 8.02 becomes
effective, the Company shall mail to the Holders of each Security affected
thereby, with a copy to the Trustee, a notice briefly describing the amendment
or waiver. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment, waiver, consent or supplemental indenture. Except as otherwise
provided in this Section 8.02, the Holders of a majority in aggregate principal
amount of the Securities then outstanding may waive compliance in a particular
instance by the Company with any provisions of this Indenture or the Securities.
SECTION 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 8.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
until an amendment or waiver becomes effective, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security. For
such revocation to be effective, the Trustee must receive the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
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After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder unless it makes a change described in any of
clauses (1) through (7) of Section 8.02. In that case the amendment, supplement
or waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 8.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 8.06. Trustee Protected.
The Trustee shall sign any amendment or supplement or waiver
authorized pursuant to this Article if the amendment or supplement or waiver
does not adversely affect the rights of the Trustee. If it does adversely affect
the rights of the Trustee, the Trustee may but need not sign it. In signing such
amendment or supplement or waiver the Trustee shall be entitled to receive, and
(subject to Article Six) shall be fully protected in relying upon, an Opinion of
Counsel stating that such amendment or supplement or waiver is authorized or
permitted by and complies with this Indenture. The Company may not sign an
amendment or supplement until the Board of Directors approves it.
ARTICLE NINE
SUBORDINATION
SECTION 9.01. Securities Subordinated to Senior Indebtedness.
The Company agrees, and each Holder of the Securities by its
acceptance thereof likewise agrees, that the payment of all Obligations with
respect to the Securities is subordinated, to the extent and in the manner
provided in this Article, to the prior payment in full of all Senior
Indebtedness.
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This Article Nine shall constitute a continuing offer to all
persons who, in reliance upon such provisions, become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders and/or each of them may enforce
such provisions. No amendment of any provision of this Article Nine shall be
effective as against any holder of Senior Indebtedness who has not consented
thereto.
SECTION 9.02. Company Not To Make Payments with Respect
to Securities in Certain Circumstances.
(a) Upon the maturity of the principal of any Senior Indebtedness
by lapse of time, acceleration or otherwise, all Obligations thereon shall first
be paid in full, or such payment duly provided for in cash or in a manner
satisfactory to the holders of such Senior Indebtedness, before any payment is
made on account of any Obligations with respect to the Securities or to acquire
any of the Securities.
(b) Upon the happening of an event of default (or if any event of
default would result upon any payment with respect to the Securities) with
respect to any Senior Indebtedness, as such event of default is defined therein
or in the instrument under which it is outstanding, permitting the holders to
accelerate the maturity thereof, and, if the default is other than default in
payment of the principal or interest on such Senior Indebtedness (a "non-payment
default"), upon written notice thereof given to the Company and the Trustee by
the holders of such Senior Indebtedness or their representative, then, unless
and until such event of default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company of any Obligations with
respect to the Securities or to acquire any of the Securities; provided,
however, that in the event of a non-payment default, such payment blockage shall
not exceed a period of 179 days commencing on the date of receipt by the Company
of written notice of such non-payment default or event of default by a holder of
such Senior Indebtedness or by their representatives; provided, that during any
360-day period the aggregate of all payment blockage periods pursuant hereto
shall not exceed 179 days and there shall be a period of at least 181
consecutive days in each 360-day period when no payment blockage period pursuant
hereto is in effect.
(c) In the event that, notwithstanding the provisions of this
Section 9.02, the Company shall make any payment to the Trustee or the Holders
on account of any Obligations
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with respect to the Securities, after the happening of a default in payment of
the principal on Senior Indebtedness or an event of default in respect of the
payment of interest on Senior Indebtedness or after receipt by the Company and
the Trustee of written notice as provided in this Section 9.02 of an event of
default with respect to any Senior Indebtedness, then, unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist, such payment (subject to the provisions of Sections 9.06 and 9.07)
shall be held by the Trustee or Holders, as the case may be, in trust for the
benefit of, and shall be paid over and delivered to, the holders of Senior
Indebtedness (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of Senior Indebtedness. The Company shall give
prompt written notice to the Trustee of any default under any Senior
Indebtedness or under any agreement pursuant to which Senior Indebtedness may
have been issued.
SECTION 9.03. Securities Subordinated to Prior Payment of
All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Company.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company:
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full of all Obligations due thereon
(including without limitation interest accruing after the commencement
of any such proceeding at the rate specified in the respective Senior
Indebtedness) before the Holders of the Securities are entitled to
receive any payment on account of any Obligations with respect to the
Securities;
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(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the
Holders of the Securities or the Trustee on behalf of the Holders of the
Securities would be entitled except for the provisions of this Article
Nine, shall be paid by the liquidating trustee or agent or other person
making such payment or distribution directly to the holders of Senior
Indebtedness or their representative, or to the trustee under any
indenture under which Senior Indebtedness may have been issued, to the
extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such Senior
Indebtedness; and
(c) in the event that notwithstanding the foregoing
provisions of this Section 9.03, any payment or distribution
of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or the Holders
of the Securities on account of any Obligations with respect to the
Securities before all Senior Indebtedness is paid in full, or effective
provision made for its payment, such payment or distribution (subject to
the provisions of Section 9.06 and 9.07) shall be received and held in
trust for and shall be paid over to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or their representative,
or to the trustee under any indenture under which Senior Indebtedness
may have been issued, for application to the payment of such Senior
Indebtedness until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of
any dissolution, winding up, liquidation or reorganization of the Company.
SECTION 9.04. Securityholders To Be Subrogated to
Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to the Senior Indebtedness until all amounts owing on the
Securities shall be paid in full, and for the purpose of such
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subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders of
the Securities by virtue of this Article which otherwise would have been made to
the Holders of the Securities shall, as between the Company and the Holders of
the Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article
Nine are and are intended solely for the purpose of defining the relative rights
of the Holders of the Securities, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
SECTION 9.05. Obligation of the Company Unconditional.
Nothing contained in this Article Nine or elsewhere in this
Indenture or in any Security is intended to or shall impair, as between the
Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal 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 of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon Default under
this Indenture, subject to the rights, if any, under this Article Nine of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy. Upon any distribution of
assets of the Company referred to in this Article Nine, the Trustee, subject to
the provisions of Sections 6.01 and 6.02, and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Nine.
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SECTION 9.06. Trustee Entitled To Assume Payments
Not Prohibited in Absence of Notice.
The Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee, unless it shall have received at its corporate trust department
written notice thereof from the Company or from one or more holders of Senior
Indebtedness or from any trustee thereof; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Article Six, shall be
entitled to assume conclusively that no such facts exist. The Trustee shall be
entitled to rely on the delivery to it of a written notice by a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders.
SECTION 9.07. Application by Trustee of Monies
Deposited with It.
Except as provided in Section 7.02, any deposit of monies by the
Company with the Trustee or any Paying Agent (whether or not in trust) for the
payment of the principal of interest on any Securities shall be subject to the
provisions of Sections 9.01, 9.02, 9.03 and 9.04 except that, if prior to the
third business day prior to the date on which by the terms of this Indenture any
such monies may become payable for any purpose (including, without limitation,
the payment of either the principal or the interest on any Security) the Trustee
or, in the case of any such deposit of monies with a Paying Agent, the Paying
Agent shall not have received with respect to such monies the notice provided
for in Section 9.06, then the Trustee or such Paying Agent, as the case may be,
shall have full power and authority to receive such monies and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such third
business day. 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 Nine, the Trustee may request such person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article Nine,
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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.
The Trustee, however, shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness but shall have only such obligations
to such holders as are expressly set forth in this Article Nine.
SECTION 9.08. Subordination Rights Not Impaired
by Acts or Omissions of Company or
Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the 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 of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with.
SECTION 9.09. Securityholders Authorize Trustee To
Effectuate Subordination of Securities.
Each Holder of the Securities by his acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Nine and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of its or his
Securities in the form required in said proceedings and the causing of said
claim to be approved. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claims, then the holders of Senior
Indebtedness are hereby authorized to have the right to file and are hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Securities.
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SECTION 9.10. Right of Trustee To Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in
this Article Nine in respect of any Senior Indebtedness at any time held by it
to the same extent as any other holder of Senior Indebtedness, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.
SECTION 9.11. Article Nine Not To Prevent Events of Default.
The failure to make a payment on account of principal or interest
by reason of any provision in this Article Nine shall not be construed as
preventing the occurrence of an Event of Default under Section 5.01.
SECTION 9.12. Ranking; Designation.
The Securities rank senior in right of payment to the 5 1/4%
Debentures and pari passu in right of payment to the 10 3/8% Notes and the 8
1/4% Notes. The Indebtedness evidenced by the Securities is hereby irrevocably
designated as "Senior Indebtedness" for purposes of the Indenture dated as of
February 1, 1993 between the Company and First Trust National Association, as
trustee, pursuant to which the 5 1/4% Debentures were issued.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION 10.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person or mailed by certified or registered mail
(return receipt requested) addressed as follows:
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If to the Company:
Leucadia National Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
With a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Trustee:
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to him by first-class mail at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. If the
Company mails notices or communications to Securityholders it shall mail a copy
to the Trustee and each Agent at the same time. All notices or communications
shall be in writing.
SECTION 10.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
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SECTION 10.04. Certificate and Opinion as
to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
person, such covenant or condition has been complied with.
SECTION 10.06. When Treasury Securities Disregarded.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or by any Affiliate shall be disregarded, except
that for the purpose of determining whether the Trustee shall be protected in
relying
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on any such direction, waiver or consent, only Securities which the Trustee
knows are so owned shall be so disregarded.
SECTION 10.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting
of Securityholders. The Registrar or Paying Agent may make reasonable rules for
its functions.
SECTION 10.08. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which
banks and trust companies in The City of New York, New York or Boston,
Massachusetts are not required by law or executive order to be open. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
the place on the next succeeding day that is not a Legal Holiday, without
additional interest.
SECTION 10.09. Governing Law.
The laws of the State of New York shall govern this Indenture and
the Securities without regard to principles of conflicts of laws.
SECTION 10.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 10.11. No Recourse Against Others.
All liability described in paragraph 17 of the Securities of any
director, officer, employee or stockholder, as such, of the Company is waived
and released.
SECTION 10.12. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
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SECTION 10.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
instrument.
SECTION 10.14. Separability.
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, and a Holder shall have no claim therefor against any party
hereto.
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SIGNATURES
LEUCADIA NATIONAL CORPORATION
By ______________________________________
Name:
Title:
(Seal)
Attest:
By___________________________
Name:
Title:
[ ]
By ______________________________________
Name:
Title:
(Seal)
EXHIBIT A
[Form of Security]
[ ]% SENIOR SUBORDINATED NOTE DUE OCTOBER [ ], 2006
No. $
LEUCADIA NATIONAL CORPORATION
(a New York corporation)
promises to pay to ____________________
or registered assigns
the principal sum of Dollars on October [ ], 2006.
Interest Payment Dates: April [ ] and October [ ]
Record Dates: [ ] and [ ]
Dated:
LEUCADIA NATIONAL CORPORATION
_________________________________________
Chairman of the Board
[Seal]
Attest:
__________________________________
Secretary
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Certificate of Authentication
This Note is one of the Securities
referred to in the within-mentioned
Indenture.
[ ], TRUSTEE
By__________________________________
Authorized Signatory
[Seal]
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LEUCADIA NATIONAL CORPORATION
[ ]% Senior Subordinated Note due October [ ], 2006
1. Interest.
Leucadia National Corporation (the "Company") promises to pay
interest on the principal amount of this Note at the rate per annum shown above.
The Company will pay interest semiannually on April [ ] and October [ ] of each
year commencing April [ ], 1997. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from October [ ], 1996. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. Method of Payment.
The Company will pay interest on the Notes (except defaulted
interest) to the persons who are registered holders of Notes at the close of
business on the [ ] or [ ] next preceding the interest payment date even though
Notes are cancelled after the record date and on or before the interest payment
date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay interest by check payable in such
money. It may mail an interest check to a Holder's registered address.
3. Paying Agent, Registrar.
Initially, [ ] will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its Subsidiaries (as defined in the
Indenture) may act in any such capacity.
4. Indenture.
The Company issued the Notes under an Indenture dated as of
October [ ], 1996 (the "Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by
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reference to the Trust Indenture Act of 1939 (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb)
as in effect on the date of the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general unsecured subordinated
obligations of the Company limited to $135,000,000 aggregate principal amount,
except as otherwise provided in the Indenture.
5. Subordination.
The Notes are subordinated to Senior Indebtedness, which is
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Notes may be paid. Each Noteholder by
accepting a Note agrees to such subordination and authorizes the Trustee to give
it effect.
6. Maintenance of Consolidated Tangible Net Worth.
If, on the last day of each of any two consecutive fiscal
quarters of the Company (the last day of the second such fiscal quarter being
referred to herein as the "Deficiency Date") the Company's Consolidated Tangible
Net Worth is less than the Minimum Tangible Net Worth, then the Company is
required, no later than 65 days after a Deficiency Date (110 days if a
Deficiency Date is the last day of the Company's fiscal year), to make an offer
to purchase (an "Offer") 10% of the aggregate principal amount of Notes
originally issued (the "Offer Amount") at a purchase price of 100% of the
principal amount of such Notes, plus accrued interest to the date of purchase.
If the aggregate principal amount of Notes tendered to the Company exceeds the
Offer Amount, the Company is required to purchase the Notes tendered to it pro
rata among such Notes tendered (with such adjustments as may be appropriate so
that only Notes in denominations of $1,000 and integral multiples thereof shall
be purchased). The Company may reduce the principal amount of Notes to be
purchased pursuant to the Offer by subtracting 100% of the principal amount of
Notes acquired by the Company subsequent to the Deficiency Date through purchase
(otherwise than pursuant to this provision, pursuant to a Change of Control
offer or pursuant to a Certain Payment or Investment offer) or exchange, and
surrendered for cancellation.
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7. Change of Control.
In the event of a Change of Control of the Company, each Holder
shall have the right, at such Holder's option, to require the Company to buy all
or any portion of such Holder's Notes, at 101% of the principal amount thereof,
plus accrued interest to the date of purchase.
8. Certain Payments or Investments.
In the event of a Certain Payment or Investment by the Company,
each Holder shall have the right, at such Holder's option, to require the
Company to buy all or any portion of such Holder's Notes, at 101% of the
principal amount thereof, plus accrued interest to the date of purchase.
9. Restrictive Covenants.
The Indenture imposes certain limitations on, among other things,
the ability of the Company to merge or consolidate with any other Person or
sell, lease or otherwise transfer all or substantially all of its properties or
assets, the ability of the Company to pay dividends and to make certain other
distributions and payments and the ability of the Company and its Subsidiaries
to make certain Investments or redeem, retire or repurchase or acquire for value
shares of Capital Stock of the Company, the ability of the Company and the
Subsidiaries to incur additional Indebtedness and the ability of the Company and
the Subsidiaries to enter into certain transactions with Affiliates, all subject
to certain limitations described in the Indenture.
10. Denominations, Transfer, Exchange.
The Notes are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture.
11. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes and neither the Company, the Trustee nor any Agent shall be
affected by notice to the contrary.
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12. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent will pay the money back to
the Company at its request. After that, Noteholders entitled to the money must
look to the Company for payment unless an abandoned property law designates
another person.
13. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes, and any past default or noncompliance with any
provision may be waived with the consent of the Holders of a majority in
principal amount of the Notes. Without the consent of any Noteholder, the
Company may amend or supplement the Indenture or the Notes to cure any
ambiguity, omission, defect or inconsistency or to provide for uncertificated
Notes in addition to certificated Notes or to make any change that does not
adversely affect the rights of any Noteholder.
14. Successor Corporation.
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor corporation will
be released from those obligations.
15. Defaults and Remedies.
The terms of the Notes include the Events of Default as set forth
in Section 5.01 of the Indenture. Subject to certain limitations in the
Indenture, if an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy, insolvency or
reorganization relating to the Company, all outstanding Notes shall become due
and payable immediately without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
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exercise of any trust or power. The Company must furnish quarterly compliance
certificates to the Trustee.
16. Trustee Dealings with Company.
[ ], the Trustee under the Indenture, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its affiliates, and may otherwise deal with the
Company or its affiliates, as if it were not the Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Notes or the Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Noteholder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
18. Authentication.
This Note shall not be valid until the Trustee or an
authenticating agent signs the certificate of authentication on the other side
of this Note.
19. Abbreviations.
Customary abbreviations may be used in the name of a Noteholder
or an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors
Act).
The Company will furnish to any Noteholder upon written request
and without charge a copy of the Indenture. Requests may be made to: Secretary,
Leucadia National Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
___________________________________________
: :
___________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent to transfer this Note 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 Note)
Date: _______________________
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 3.10, Section 3.11 or Section 3.15 of the Indenture, check
the appropriate box:
Section 3.10 [ ]
Section 3.11 [ ]
Section 3.15 [ ]
If you want to have only part of this Note purchased by the
Company pursuant to Section 3.10, Section 3.11 or Section 3.15 of the Indenture,
state the amount (in integral multiples of $1,000):
$
Date: _____________________ Signature:__________________________
(Sign exactly as your
name appears on the
other side of this
Note)
Signature Guarantee: ___________________________________________________________