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EXHIBIT 4.2
PODS, INC.
SERIES A SUBORDINATED CONVERTIBLE DEBENTURES
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INDENTURE
DATED AS OF_________ , 2001
SUNTRUST BANK
AS
TRUSTEE
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TABLE OF CONTENTS
PAGE
ARTICLE 1-- DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions...................................................... 1
Section 1.2 Other Definitions................................................ 3
Section 1.3 Incorporation by Reference of TIA................................ 3
Section 1.4 Rules of Construction............................................ 4
ARTICLE 2 -- THE DEBENTURES
Section 2.1 Form and Dating.................................................. 4
Section 2.2 Terms............................................................ 4
Section 2.3 Execution and Authentication..................................... 5
Section 2.4 Registrar and Paying Agent....................................... 5
Section 2.5 Paying Agent to Hold Money in Trust.............................. 6
Section 2.6 Certificateholder Lists.......................................... 6
Section 2.7 Transfer and Exchange............................................ 6
Section 2.8 Replacement Debentures........................................... 7
Section 2.9 Outstanding Debentures........................................... 7
Section 2.10 Treasury Debentures.............................................. 8
Section 2.11 Temporary Debentures............................................. 8
Section 2.12 Cancellation..................................................... 8
Section 2.13 Defaulted Interest............................................... 8
ARTICLE 3 -- CONVERSION; PREPAYMENT
Section 3.1 Applicability of Article......................................... 9
Section 3.2 Notices to Trustee............................................... 9
Section 3.3 Company Conversion Election Notice............................... 9
Section 3.4 Conversion Election or Deemed Conversion Election................ 10
Section 3.5 Deposit of Exchange Shares....................................... 10
Section 3.6 Prepayment; Notices to Trustee................................... 10
Section 3.7 Selection of Debentures to Be Prepaid............................ 11
Section 3.8 Notice of Prepayment............................................. 11
Section 3.9 Effect of Notice of Prepayment................................... 11
Section 3.10 Deposit of Prepayment Price...................................... 12
Section 3.11 Debentures Prepaid in Part....................................... 12
ARTICLE 4 -- COVENANTS
Section 4.1 Payment of Debentures............................................ 12
Section 4.2 SEC Reports...................................................... 13
Section 4.3 Compliance Certificate........................................... 13
Section 4.4 Usury Laws....................................................... 13
Section 4.5 Money for Debenture Payments to Be Held in Trust................. 13
Section 4.6 Continued Existence.............................................. 14
ARTICLE 5 -- SUCCESSORS
Section 5.1 When Company May Merge, Etc...................................... 15
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ARTICLE 6 -- DEFAULTS AND REMEDIES
Section 6.1 Events of Default................................................ 15
Section 6.2 Acceleration..................................................... 17
Section 6.3 Other Remedies................................................... 17
Section 6.4 Waiver of Past Defaults.......................................... 18
Section 6.5 Control by Majority.............................................. 18
Section 6.6 Limitation on Suits.............................................. 18
Section 6.7 Rights of Holders to Receive Payment............................. 19
Section 6.8 Collection Suit by Trustee....................................... 19
Section 6.9 Trustee May File Proofs of Claim................................. 19
Section 6.10 Priorities....................................................... 19
Section 6.11 Undertaking for Costs............................................ 20
ARTICLE 7 -- TRUSTEE
Section 7.1 Duties of Trustee................................................ 20
Section 7.2 Rights of Trustee................................................ 21
Section 7.3 Individual Rights of Trustee..................................... 22
Section 7.4 Trustee's Disclaimer............................................. 22
Section 7.5 Notice of Defaults............................................... 22
Section 7.6 Reports by Trustee to Holders.................................... 22
Section 7.7 Compensation and Indemnity....................................... 23
Section 7.8 Replacement of Trustee........................................... 23
Section 7.9 Successor Trustee by Merger, Etc................................. 25
Section 7.10 Eligibility; Disqualification.................................... 25
Section 7.11 Preferential Collection of Claims Against Company................ 25
ARTICLE 8 -- DISCHARGE OF INDENTURE
Section 8.1 Termination of Company's Obligations............................. 25
Section 8.2 Application of Trust Money....................................... 26
Section 8.3 Repayment to the Company......................................... 27
ARTICLE 9 -- AMENDMENTS
Section 9.1 Without Consent of Holders....................................... 27
Section 9.2 With Consent of Holders.......................................... 27
Section 9.3 Compliance with Trust Indenture Act.............................. 28
Section 9.4 Revocation and Effect of Consents................................ 28
Section 9.5 Notation on or Exchange of Debentures............................ 29
Section 9.6 Trustee Protected................................................ 29
ARTICLE 10 -- SUBORDINATION
Section 10.1 Agreement to Subordinate......................................... 29
Section 10.2 Certain Definitions.............................................. 29
Section 10.3 Liquidation; Dissolution; Bankruptcy............................. 30
Section 10.4 Default on Senior Indebtedness................................... 30
Section 10.5 Acceleration of Debentures....................................... 31
Section 10.6 When Distribution Must be Paid Over.............................. 31
Section 10.7 Notice by Company................................................ 32
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Section 10.8 Subrogation...................................................... 32
Section 10.9 Relative Rights.................................................. 33
Section 10.10 Subordination May Not Be Impaired by Company..................... 33
Section 10.11 Distribution or Notice to Representative......................... 33
Section 10.12 Rights of Trustee and Paying Agent............................... 34
Section 10.13 Trust Moneys Not Subordinated.................................... 34
Section 10.14 Trustee Not Fiduciary for Holders of Senior Indebtedness......... 34
ARTICLE 11 -- MISCELLANEOUS
Section 11.1 TIA Controls..................................................... 34
Section 11.2 Notices.......................................................... 35
Section 11.3 Communication by Holders with Other Holders...................... 35
Section 11.4 Certificate and Opinion as to Conditions Precedent............... 35
Section 11.5 Statements Required in Certificate or Opinion.................... 36
Section 11.6 Rules by Trustee and Agents...................................... 36
Section 11.7 Legal Holidays................................................... 36
Section 11.8 No Recourse Against Others....................................... 36
Section 11.9 Duplicate Originals.............................................. 37
Section 11.10 Variable Provisions.............................................. 37
Section 11.11 Governing Law.................................................... 37
Section 11.12 No Adverse Interpretation of Other Agreements.................... 38
Section 11.13 Successors....................................................... 39
Section 11.14 Severability..................................................... 39
Signatures..................................................................... 39
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INDENTURE dated as of ____________, 2001, between PODS, INC., a Florida
corporation ("Company"), and SunTrust, a national banking association
("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 Series A
Subordinated Convertible Debentures:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1. DEFINITIONS.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
authorized committee of the Board.
"COMPANY" means the party named as such above until a successor
replaces it and thereafter means the successor or any other obligor with respect
to the Debentures.
"COMPANY ORDER" means an order signed in the name of the Company by its
Chairman of the Board, President or a Vice President, and by its Treasurer, an
Assistant Treasurer, Controller, an Assistant Controller, Secretary or an
Assistant Secretary, and delivered to the Trustee.
"DATE OF ISSUE" means the date that the Company receives the funds for
the purchase of a Debenture if such funds are received prior to 3:00 p.m. on a
business day or the next business day if the Company receives such funds on a
non-business day or after 3:00 p.m. on a business day. For this purpose, the
Company's business days will be deemed to be Monday through Friday, except on
Florida legal holidays.
"DEBENTURES" means the Series A Subordinated Convertible Debentures
described herein issued under this Indenture.
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"DEFAULT" means any event which is, or after notice or passage of time
would be, an Event of Default.
"HOLDER" or "CERTIFICATEHOLDER" means a person in whose name a
Debenture is registered.
"INDENTURE" means this Indenture as amended from time to time.
"OFFICERS' CERTIFICATE" means a certificate signed by two officers of
the Company, one of whom must be the President, the Treasurer or a Vice
President of the Company.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PRINCIPAL" of a debt security means the principal of the security plus
the premium, if any, on the security.
"SEC" means the United States Securities and Exchange Commission.
"STATED MATURITY," when used with respect to a Debenture, means the
date specified in such Debenture as the fixed date on which the principal of
such Debenture and any accrued but unpaid interest is due and payable.
"SUBSIDIARY" means any person of which at least a majority of capital
stock having ordinary voting power for the election of directors or other
governing body of such person is owned by the Company directly or through one or
more subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code 77aaa-77bbbb)
as in effect on the date of execution of this Indenture.
"TRUSTEE" means the party named as such above until a successor
replaces it and thereafter means the successor.
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"TRUST OFFICER" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
Section 1.2. OTHER DEFINITIONS.
Term Defined in
Section
ADDITIONAL INTEREST 2.2(b)
BANKRUPTCY LAW 6.1
CUSTODIAN 6.1
EVENT OF DEFAULT 6.1
INDEBTEDNESS 10.2
LEGAL HOLIDAY 11.7
OFFICER 11.10
REPRESENTATIVE 10.2
SENIOR INDEBTEDNESS 10.2
U.S. GOVERNMENT OBLIGATIONS 8.1
Section 1.3. INCORPORATION BY REFERENCE OF TIA.
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 used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Debentures;
"INDENTURE SECURITY HOLDER" means a Certificateholder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Debentures means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute, or defined by SEC rule under the
TIA have the meanings assigned to them.
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Section 1.4. 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 United States generally accepted accounting
principles in effect on the date of execution of this Indenture;
(3) "OR" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE DEBENTURES
Section 2.1. FORM AND DATING.
The Debentures shall be substantially in the form of EXHIBIT A, with
such appropriate insertions, omissions, substitutions and other variations
required or permitted by this Indenture. The Debentures may have notations,
legends or endorsements required by law or usage.
Section 2.2. TERMS.
(a) AMOUNT LIMITED; TERMS. The aggregate principal amount of
Debentures which may be authenticated and delivered under this Indenture is
$10,000,000. Debentures may be issued in one or more series. The aggregate
principal amount of the Debentures to be authenticated and delivered under this
Indenture is $10,000,000.
(b) INTEREST. Interest on the Debentures shall be payable at the
rate set forth in the Debentures, until the principal thereof is paid or made
available for payment. The Debentures shall bear interest from and commencing
with their Date of Issue.
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(c) DENOMINATIONS. The Debentures shall be issued in denominations
of $25,000 or any multiple thereof or in denominations in excess of $25,000 that
are in increments of $5,000.
(d) SUBORDINATION. The Debentures shall be subordinated and junior
in right of payment to all Senior Indebtedness of the Company as provided in
Article 10.
Section 2.3. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Debentures for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Debenture no longer holds that
office at the time the Debenture is authenticated, the Debenture shall
nevertheless be valid.
A Debenture shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Debenture has been authenticated under this Indenture.
The Trustee shall authenticate Debentures for original issue up to the
aggregate principal amount of $10,000,000. The aggregate principal amount of
Debentures outstanding at any time may not exceed that amount except as provided
in Section 2.8.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Debentures. An authenticating agent may authenticate
Debentures whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same right as an Agent to deal with the Company or
an Affiliate.
Section 2.4. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Debentures may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Debentures may be presented for payment ("PAYING AGENT").
The Registrar shall keep a register of the Debentures and of their transfer and
exchange. The Debentures may be paid at the Company's option by check or draft
mailed to the person entitled thereto at his or her address appearing in the
register. The Company
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may appoint one or more co-registrars and one or more additional paying agents.
The Company may change any Paying Agent, Registrar or co-registrar without
notice to any Certificateholder. The term "PAYING AGENT" includes any additional
paying agent. The Company shall notify the Trustee of the name and address of
any Agent not a party this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its subsidiaries may act as Paying Agent or
Registrar.
Section 2.5. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Certificateholders or the Trustee all money held by the Paying Agent for the
payment of principal or interest on the Debentures, and will notify the Trustee
of any failure by the Company in making any such payment. While any such failure
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
shall have no further liability for the money. If the Company acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Certificateholders all money held by it as Paying Agent. The Paying Agent
may charge for its expenses in issuing a replacement interest check.
Section 2.6. CERTIFICATEHOLDER 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
Certificateholders. If the Trustee is not the Registrar, the Company shall
timely furnish to the Trustee the changes in this list and will furnish an
updated list of the names and addresses of Certificateholders in such form and
as of such date and at such other times as the Trustee may request in writing.
Section 2.7. TRANSFER AND EXCHANGE.
Where Debentures are presented to the Registrar or a co-registrar with
a request to register, transfer or to exchange them for an equal principal
amount of Debentures but of other denominations, the Registrar shall register
the transfer or make
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the exchange if its requirements for such transactions are met, subject to the
requirement that the Debentures be issued in denominations of $25,000 or any
multiple thereof or in denominations in excess of $25,000 that are in increments
of $5,000 and that each Debenture may be transferred only in authorized
denominations and for the same aggregate principal amount. To permit
registrations of transfer and exchanges, the Company shall issue and the Trustee
shall authenticate Debentures at the Registrar's request. The Company may charge
for its expenses in transferring or exchanging a Debenture.
The Company shall not be required (i) to issue, transfer or exchange
any Debenture during a period beginning at the opening of business 15 days
before either (A) the day of the mailing of a notice of conversion of Debentures
pursuant to Section 4.2 and ending at the close of business on the day of such
mailing or (B) the date of the maturity of that Debenture, or (C) the due date
of any scheduled principal payment, (ii) to transfer or exchange any Debenture
selected for conversion.
Section 2.8. REPLACEMENT DEBENTURES.
If the Holder of a Debenture claims that the Debenture has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Debenture if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be sufficient in
the judgment of both the Company and the Trustee to protect the Company, the
Trustee, any Agent or any authenticating agent from any loss which any of them
may suffer if a Debenture is replaced. The Trustee may waive such indemnity bond
if so instructed by the Company. The Company may charge for its expenses in
replacing a Debenture.
Every replacement Debenture is an additional obligation of the Company.
Section 2.9. OUTSTANDING DEBENTURES.
The Debentures outstanding at any time are all of the Debentures
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, and those described in this Section as not outstanding.
If a Debenture is replaced pursuant to Section 2.8, it ceases to be
outstanding unless the Trustee receives proof
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satisfactory to it that the replaced Debenture is held by a bona fide purchaser.
If Debentures are considered paid under Section 4.1, they cease to be
outstanding and interest on them ceases to accrue.
Section 2.10. TREASURY DEBENTURES.
In determining whether the Holders of the required principal amount of
the Debentures have concurred in any direction, waiver or consent, Debentures
owned by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Debentures which the Trustee knows are
so owned shall be so disregarded.
Section 2.11. TEMPORARY DEBENTURES.
Until definitive Debentures are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Debentures. Temporary
Debentures shall be substantially in the form of definitive Debentures but may
have variations that the Company considers appropriate. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Debentures in exchange for temporary Debentures.
Section 2.12. CANCELLATION.
The Company at any time may deliver Debentures to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Debentures surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Debentures surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Debentures as the Company directs. The Company may not issue new
Debentures to replace Debentures that it has paid or that have been delivered to
the Trustee for cancellation.
Section 2.13. DEFAULTED INTEREST.
If the Company fails to make a payment of interest on the Debentures,
it shall pay such interest thereafter in any lawful manner. It shall pay such
interest, plus any interest payable on it, to the persons who are
Certificateholders of Debentures on a subsequent special record date. The
Company shall fix the special record date and payment date. At least 15 days
before
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the special record date, the Company shall mail to Certificateholders of
Debentures a notice that states the special record date, payment date, and
amount of such interest to be paid.
ARTICLE 3
CONVERSION; PREPAYMENT
Section 3.1. APPLICABILITY OF ARTICLE.
Conversion of Debentures, as required by any provision of this Indenture or
the Debentures, shall be made in accordance with such provision and this Article
and in compliance with any applicable tender offer rules under the Securities
Exchange Act of 1934, as amended, including Rule 14e-1 thereunder.
Section 3.2. NOTICES TO TRUSTEE.
If the Debentures are to be converted pursuant to section 3 of the
Debentures, the Company shall notify the Trustee by Officers' Certificate of the
Exchange Date and the details of the Conversion. The Company shall give each
notice provided for in this Section at least thirty (30) days before the
Exchange Date (as defined in the Debentures).
Section 3.3. COMPANY CONVERSION ELECTION NOTICE.
On a date that is at least thirty (30) days prior to the date on which the
Company is obligated to close on an "Approved Sale" (as defined below) or an
"IPO" (as defined below) (each a "Conversion Event"), the Company shall deliver
to each registered holder of a Debenture with respect to which there has been no
exercise of the applicable Holder Payment Acceleration Right (each an "Eligible
Debenture"), a written notice (the "Company Conversion Election Notice").
The Company Conversion Election Notice shall identify the Eligible
Debentures and shall state:
(1) the Exchange Date;
(2) the number of Exchange Shares calculated in accordance with the
Conversion Price, adjusted in accordance with the terms of the Debentures;
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(3) that the holder may elect either Conversion or Installment Payments
(each as defined in the Debentures) by timely delivery of a Holder Conversion
Election Notice and that failure to timely deliver a Holder Conversion Election
Notice shall constitute a deemed election of Conversion;
(4) the name and address of the Paying Agent;
(5) that Debentures with respect to which Conversion is elected or deemed
to be elected must be surrendered to the Paying Agent to receive issuance of the
Exchange Shares; and
(6) that interest on Debentures with respect to which Conversion is elected
or deemed to be elected ceases to accrue on and after the Exchange Date.
At the Company's request, the Trustee shall give the Company Conversion
Election Notice in the Company's name and at its expense.
Section 3.4. CONVERSION ELECTION OR DEEMED CONVERSION ELECTION.
All Debentures with respect to which there is a timely delivery of a Holder
Conversion Notice or there is a deemed election of Conversion, become due and
payable on the Exchange Date by issuance of the Exchange Shares.
Section 3.5. DEPOSIT OF EXCHANGE SHARES.
On or before the Exchange Date, the Company shall deposit with the Paying
Agent, or if the Company is acting as Paying Agent it shall deposit into a
separate trust account pursuant to Section 2.5 hereof, the Exchange Shares and
money sufficient to pay any amounts due as a result of the payment of money in
lieu of fractional Exchange Shares on all Debentures to be converted on that
date. The Paying Agent shall return to the Company any money not required for
that purpose within two years following the Exchange Date.
Section 3.6. PREPAYMENT; NOTICES TO TRUSTEE.
If the Company wants to prepay the Debentures pursuant to section 4 of the
Debentures, it shall notify the Trustee by Officers' Certificate of the
prepayment date and the principal amount of Debentures to be prepaid. The
Company shall give each
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notice provided for in this Section at least fifty (50) days before the
prepayment date.
Section 3.7. SELECTION OF DEBENTURES TO BE PREPAID.
If less than all of the Debentures, as specified by Officers' Certificate,
are to be prepaid, the portion thereof selected for prepayment shall be
determined ratably or by lot. If fewer than all of such Series of Debentures as
specified by Officers' Certificate are to be prepaid, the Trustee shall then
make the selection not more than fifty (50) days before the prepayment date from
Debentures outstanding not previously called for prepayment. The Trustee may
select for prepayment portions of the principal of Debentures that have
denominations greater than $25,000. Provisions of this Indenture that apply to
Debentures called for prepayment also apply to portions of Debentures called for
prepayment. The Trustee shall notify the Company promptly of the Debentures or
portions of Debentures to be called for prepayment.
Section 3.8. NOTICE OF PREPAYMENT.
At least thirty (30) days but not more than sixty (60) days before a
prepayment date, the Company shall mail a notice of prepayment by first-class
mail to each Holder of the Debentures to be prepaid.
The notice shall identify the Debentures to be prepaid and shall state:
(1) the prepayment date;
(2) the prepayment price, which shall be equal to 100% of the remaining
unpaid Principal Amount of the Debenture plus accrued interest on a daily basis
to the prepayment date;
(3) the name and address of the Paying Agent;
(4) that Debentures called for prepayment must be surrendered to the
Paying Agent to collect the prepayment price; and
(5) that interest on Debentures called for prepayment ceases to accrue on
and after the prepayment date.
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At the Company's request, the Trustee shall give the notice of prepayment
in the Company's name and at its expense.
Section 3.9. EFFECT OF NOTICE OF PREPAYMENT.
Once notice of prepayment is mailed, Debentures called for prepayment
become due and payable on the prepayment date at the prepayment price.
Section 3.10. DEPOSIT OF PREPAYMENT PRICE.
On or before the prepayment date, the Company shall deposit with the Paying
Agent, or if the Company is acting as Paying Agent it shall deposit into a
separate trust account pursuant to Section 2.5 hereof, money sufficient to pay
the prepayment price of and accrued interest on all Debentures to be prepaid on
that date. The Paying Agent shall return to the Company any money not required
for that purpose within two years following the prepayment date.
Section 3.11. DEBENTURES PREPAID IN PART.
Upon surrender of a Debenture that is prepaid in part, the Company shall
issue and the Trustee shall authenticate for the Holder a new Debenture equal in
principal amount to the portion of the surrendered Debenture that was not
prepaid.
ARTICLE 4
COVENANTS
Section 4.1. PAYMENT OF DEBENTURES.
The Company shall pay the principal of and interest on the Debentures on
the dates and in the manner provided in the Debentures. Principal and interest
shall be considered paid on the date due if the Paying Agent holds on that date
money designated for and sufficient to pay all principal and interest then due.
The Company shall pay interest on overdue principal at the rate then borne
by the Debentures, and it shall pay interest on overdue installments of interest
at the same rate to the extent lawful.
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Section 4.2. SEC REPORTS.
The Company shall file with the Trustee within fifteen (15) days after it
files them with the SEC copies of the annual reports and quarterly 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) for the
Debentures which the Company is required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended.
The Company also shall comply with the other provisions of TIA Section 314(a).
Section 4.3. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within one hundred twenty (120)
days after the end of each fiscal year of the Company, an Officers' Certificate
stating that a review of the activities of the Company and its subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge) and that to the best of his or her knowledge no event has occurred
and remains in existence by reason of which payments on account of the principal
of or interest, if any, on the Debentures are prohibited. See Section 11.10.
Section 4.4. USURY LAWS.
The Company will not voluntarily claim and will actively resist any
attempts to claim the benefit of any usury laws against the Holders of the
Debentures.
Section 4.5. MONEY FOR DEBENTURE PAYMENTS TO BE HELD IN TRUST.
Whenever the Company shall have one or more Paying Agents, it will, on or
prior to each date for the payment of the principal of or interest on the
Debentures, deposit with a Paying Agent a sum sufficient to pay the principal or
interest
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so becoming due, such sum to be held in trust for the benefit of the persons
entitled to such payments; and, unless such Paying Agent is the Trustee, the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of or
interest on the Debentures in trust for the benefit of the persons entitled
thereto until such sums shall be paid to such persons or otherwise disposed of
as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Debentures) in the making of any payment of principal or
interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
For the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, the Company may at any time pay, or direct
any Paying Agent to pay, to the Trustee all sums held in trust by the Company or
such Paying Agent, such sums to be held by the Trustee upon the same terms as
those upon which such sums were held by the Company or such Paying Agent; and,
upon such payment by the Company or any Paying Agent to the Trustee, the Company
or such Paying Agent, as the case may be, shall be released from all further
liability with respect to such money.
Section 4.6. CONTINUED EXISTENCE.
Subject to Article 5, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
corporation.
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ARTICLE 5
SUCCESSORS
Section 5.1. WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate or merge with or into, or transfer or
lease all or substantially all of its assets to, any corporation, person or
entity person unless the corporation formed by or surviving any such
consolidation or merger (if other than the Company), or to which such transfer
or lease shall have been made, assumes by supplemental indenture all the
obligations of the Company under the Debentures then outstanding and this
Indenture; provided that this covenant shall not apply to Debentures with
respect to which the registered holder has elected or is deemed to have elected
Conversion (as defined in the Debentures).
The Company shall deliver to the Trustee prior to 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.
The surviving corporation shall be the successor Company, but the
predecessor Company in the case of a transfer or lease shall not be released
from the obligation to pay the principal of and interest on the Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in the payment of interest on any
Debenture when the same becomes due and payable and the Default continues for a
period of thirty (30) days;
(2) the Company defaults in the payment of the principal of any
Debenture when the same becomes due and payable at
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maturity, upon conversion or otherwise, which default has not been cured;
(3) the Company fails to comply with any of its other agreements
or covenants in, or provisions of, the Debentures or this Indenture and the
Default continues for the period and after the notice specified below;
(4) the Company or any material subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary proceeding under any such
Bankruptcy Law,
(b) consents to the entry of an order for relief against
it in an involuntary Bankruptcy proceeding,
(c) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is unable to pay its debts as the same
become due;
(5) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any material
subsidiary in an involuntary Bankruptcy proceeding,
(b) appoints a Custodian of the Company or any material
subsidiary or for all or substantially all of its 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;
(6) the maturity of any Senior Indebtedness in an amount exceeding
$1,000,000 is accelerated under the terms of the instrument under which such
Senior Indebtedness is outstanding, if such acceleration is not annulled within
thirty (30) days after written notice.
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The term "BANKRUPTCY LAW" means Title 11 of the United States 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) is not an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Debentures notify the Company of the Default and the Company does not cure the
Default within sixty (60) 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 6.2. ACCELERATION.
If an Event of Default occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least 25% in principal amount of the then
outstanding Debentures, by notice to the Company and the Trustee, may declare
the principal of and accrued interest on all the Debentures to be due and
payable. Upon such declaration the principal and interest owing on the then
outstanding Debentures shall be due and payable immediately. The Holders of a
majority in principal amount of the then outstanding Debentures, by notice to
the Trustee, may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived, except nonpayment of principal or interest
that has become due solely because of the acceleration.
Section 6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal or interest on the
Debentures or to enforce the performance of any provision of the Debentures or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Debentures or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of Debentures 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. All remedies are
cumulative to the extent permitted by law.
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Section 6.4. WAIVER OF PAST DEFAULTS.
The Holders of a majority in principal amount of the then outstanding
Debentures, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences except a continuing Default or Event of Default in
the payment of the principal of or interest on the Debentures.
Section 6.5. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then outstanding
Debentures 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 the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders of the Debentures, or would involve the Trustee in
personal liability.
Section 6.6. LIMITATION ON SUITS.
The Holder of Debentures may pursue a remedy with respect to this Indenture
or the Debentures only if:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Debentures make a 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 sixty (60)
days after receipt of the request and the offer of indemnity; and
(5) during such sixty (60) day period the Holders of a majority of
principal amount of the then outstanding Debentures do not give the Trustee a
direction inconsistent with the request.
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A Certificateholder may not use this Indenture to prejudice the rights of
another Holder of the Debentures or to obtain a preference or priority over
another Holder of the Debentures.
Section 6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Debenture to receive payment of principal and interest on the
Debenture, on or after the respective due dates expressed in the Debenture, 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 the
Holder.
Section 6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(1) or Section 6.1(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 on the Debentures with respect to which
the Event of Default occurred.
Section 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
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
Certificateholders allowed in any judicial proceedings relative to the Company,
its creditors or its property.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to holders of Senior Indebtedness to the extent required by
Article 10;
Third: to Holders of Debentures for amounts due and unpaid on the
Debentures for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Debentures for
principal and interest, respectively; and
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Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to the
Certificateholders.
Section 6.11. 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 a
Trustee, a 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 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.7, or a suit by Holders of more than 10% in
principal amount of the then outstanding Debentures.
ARTICLE 7
TRUSTEE
Section 7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and power vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically set
forth 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 the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
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(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 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 any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.5.
(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 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 with the Company. Money held in
trust by the Trustee need not be segregated from the other funds except to the
extent required by law.
Section 7.2. RIGHTS OF TRUSTEE.
(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
need not investigate any fact or matter stated in the document.
(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 of
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
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(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 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Debentures and may otherwise deal with the Company or an Affiliate
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 7.10 and
7.11.
Section 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Debentures, it shall not be accountable for the Company's use
of the proceeds from the Debentures, and it shall not be responsible for any
statement in the Debentures other than its authentication.
Section 7.5. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of the Debentures a
notice of the Default or Event of Default within ninety (90) days after it
occurs. Except in the case of a Default or Event of Default in payment on a
Debenture, 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 Holders of the Debentures.
Section 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 11.10, the
Trustee shall mail to Certificateholders a brief report dated as of such
reporting date that complies with Section 313(a) of the TIA. The Trustee also
shall comply with Section 313(b)(2) of the TIA.
A copy of each report at the time of its mailing to Certificateholders
shall be filed with the SEC and each stock exchange on which the Debentures are
listed. The Company shall notify the Trustee when the Debentures are listed on
any stock exchange.
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Section 7.7. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
out-of-pocket expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel, and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment of obligations in this Section, the Trustee
shall have a lien prior to the Debentures on all money or property held or
collected by the Trustee, including that held in trust to pay principal and
interest on the Debentures.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.8. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
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The Trustee may resign by so notifying the Company. The Trustee may be
removed with respect to the Debentures by the Holders of a majority in principal
amount of the then outstanding Debentures by so notifying the Trustee and the
Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or any
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the Trustee or
its property;
(4) the Trustee becomes incapable of action; or
(5) in the judgment of the Company, comparable services are
available from another entity qualifying under Section 7.10 at a materially
lower cost to the Company.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, a successor
Trustee may be appointed by act of the Holders of a majority in principal amount
of the then outstanding Debentures to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within sixty (60) days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding
Debentures may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder of the
Debentures may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon 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
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Indenture. The successor Trustee shall mail a notice of its succession to the
Holders of Debentures. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.7.
Section 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the requirements
of Section 310(a)(1) of the TIA. The Trustee shall always have a combined
capital and surplus as stated in Section 11.10. The Trustee is subject to
Section 310(b) of the TIA. Section 11.10 lists any excluded indenture or trust
agreement.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to Section 311(a) of the TIA, excluding any creditor
relationship described in Section 311(b) of the TIA. A Trustee who has resigned
or been removed shall be subject to Section 311(a) of the TIA to the extent
indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.1. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 7.7 and 8.3 shall survive) when all
outstanding Debentures theretofore authenticated and issued have been delivered
to the Trustee for cancellation. In addition, the Company may terminate its
obligations under this Indenture if:
(a) The Debentures then outstanding mature within one year or all
of the Debentures then outstanding are to be called
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for conversion within one year under arrangements satisfactory to the Trustee
for giving the notice of redemption; and
(b) The Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations sufficient to pay principal and interest on
the Debentures then outstanding to maturity or conversion, as the case may be.
The Company may make the deposit only during the one-year period and only if
Article 11 permits it.
However, the Company's obligations in Sections 2.4, 2.5, 2.6, 2.7, 2.8,
4.1, 6.7, 6.8 and 8.3, and in Article 10, shall survive until no Debentures are
outstanding. Thereafter, only the Company's obligations in Sections 7.7 and 8.3
shall survive.
If a deposit is made pursuant to this Section 8.1, the Trustee, upon
request, shall acknowledge in writing the discharge of the Company's obligations
under 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 Debentures, 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.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged.
Section 8.2. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.1. 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
Debentures. Money and Debentures so held in trust are not subject to Article 10.
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Section 8.3. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any money or Debentures held by them at any time in excess of amounts
required to be so held hereunder.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Company, Certificateholders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person.
ARTICLE 9
AMENDMENTS
Section 9.1. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Debentures
without the consent of the Holders of the Debentures by Company Order:
(1) to clarify any ambiguity, defect or inconsistency;
(2) to comply with Section 5.1;
(3) to provide for uncertified Debentures in addition to
certificated Debentures;
(4) to increase the aggregate principal amount of Debentures which
may be authenticated and delivered under this Indenture; and
(5) to make any change that does not adversely affect the legal
rights hereunder of the Holders of the Debentures.
Section 9.2. WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture or the Debentures with
the written consent of the Holders of at least a majority in principal amount of
the then outstanding Debentures. However, without the consent of each
Certificateholder affected, an amendment under this Section may not:
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(1) reduce the amount of Debentures whose Holders must consent to
an amendment;
(2) reduce the rate of or change the time for payment of interest,
including default interest, on any issued and authenticated Debenture;
(3) reduce the principal of or change the fixed maturity of any
Debenture;
(4) make any Debenture payable in money other than that stated in
such Debenture;
(5) make any change in Section 6.4, Section 6.7 or Section 9.2(2);
or
(6) make any change in Article 10 that adversely affects the
rights of any Certificateholder.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of an issue of Senior
Indebtedness unless the holders of the issue pursuant to its terms consent to
the change or the change is otherwise permissible.
After an amendment under this Section becomes effective, the Company shall
mail to the Holders of the Debentures affected by such amendment a notice
briefly describing the amendment.
Section 9.3. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Debentures shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a Holder
of a Debenture is a continuing consent by the Holder and every subsequent Holder
of a Debenture or portion of a Debenture that evidences the same debt as the
consenting Holder's Debenture, even if notification of the consent is not made
on any Debenture. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Debenture or portion of a Debenture if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes
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effective. An amendment or waiver becomes effective in accordance with its terms
and thereafter binds every Holder of the Debentures.
Section 9.5. NOTATION ON OR EXCHANGE OF DEBENTURES.
The Trustee may place an appropriate notation about an amendment or waiver
on any Debenture thereafter authenticated. The Company in exchange for all
Debentures may issue and the Trustee shall authenticate new Debentures that
reflect the amendment or waiver.
Section 9.6. TRUSTEE PROTECTED.
The Trustee shall sign all supplemental indentures, except that the Trustee
need not sign any supplemental indenture that adversely affects its rights.
ARTICLE 10
SUBORDINATION
Section 10.1. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Certificateholder by accepting a Debenture
agrees, that the indebtedness evidenced by the Debenture is subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full of all Senior Indebtedness, and that the subordination
is for the benefit of the holders of Senior Indebtedness.
Section 10.2. CERTAIN DEFINITIONS.
"INDEBTEDNESS" means any indebtedness, contingent or otherwise, in respect
of (i) borrowed money (whether or not the recourse of the lender is to the whole
of the assets of the Company or only to a portion thereof), or evidenced by
bonds, notes, debentures or similar instruments or letters of credit, or
representing the balance deferred and unpaid on the purchase price of any
property or interest therein, (ii) all reimbursement obligations and other
liabilities (contingent or otherwise) with respect to letters of credit, bank
guarantees or banker's acceptances, and (iii) all obligations and liabilities
(contingent or otherwise) in respect of leases which are required, in conformity
with generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of the Company.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
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"SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest,
rent, all amounts payable as fees, costs, expenses, liquidated damages,
indemnities and other amounts to the extent accrued or due on or in connection
with all Indebtedness (present or future) created, incurred, assumed or
guaranteed by the Company (and all renewals, extensions or refundings thereof),
except such Indebtedness that by its terms expressly provides that such
Indebtedness is not senior or superior in right of payment to the Debentures.
Senior Indebtedness shall include the guarantee by the Company of any
Indebtedness of any other person (including, without limitation, subordinated
Indebtedness of another person), unless such Indebtedness is expressly
subordinated to any other Indebtedness of the Company. Notwithstanding anything
herein to the contrary, Senior Indebtedness shall not include (i) debt of the
Company to any subsidiary of the Company, a majority of the voting stock of
which is owned, directly or indirectly, by the Company, (ii) indebtedness
evidenced by the Debentures, and (iii) accounts payable or other indebtedness to
trade creditors created or assumed by the Company in the ordinary course of
business.
A distribution may consist of cash, Debentures or other property.
Section 10.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of the principal and interest (including interest
accruing after the commencement of any such proceeding) to the date of payment,
on the Senior Indebtedness before Certificateholders shall be entitled to
receive any payment of principal or interest on Debentures; and
(2) until the Senior Indebtedness is paid in full in cash, any
distribution to which Certificateholders would be entitled but for this Article
shall be made to holders of Senior Indebtedness as their interest may appear,
except that Holders of Debentures may receive Debentures that are subordinated
to Senior Indebtedness to at least the same extent as such Debentures.
Section 10.4. DEFAULT ON SENIOR INDEBTEDNESS.
Upon the maturity of any Senior Indebtedness by lapse of time, acceleration
or otherwise, all such Senior Indebtedness 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
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Indebtedness, before any payment is made by the Company or any person acting on
behalf of the Company on account of the principal or interest on the Debentures.
The Company may not pay principal or interest on the Debentures and may not
acquire Debentures for cash or property other than capital stock of the Company
if:
(1) a default on Senior Indebtedness occurs and is continuing that
permits holders of such Senior Indebtedness to accelerate its maturity, and
(2) the default is the subject of judicial proceedings or the
Company receives a notice of the default from a person who may give it pursuant
to Section 10.12. If the Company receives any such notice, a similar notice
received within nine (9) months thereafter relating to the same default on the
same issue of Senior Indebtedness shall not be effective for purposes of this
Section.
The Company may resume payments on the Debentures and may acquire them
when:
(a) the default is cured or waived, or
(b) one hundred twenty (120) days pass after the notice is given
if the default is not the subject of judicial proceedings, if this Article
otherwise permits the payment or acquisition at that time.
Section 10.5. ACCELERATION OF DEBENTURES.
If payment of the Debentures is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Indebtedness of the
acceleration. The Company may pay Holders of the Debentures when one hundred
twenty (120) days pass after the acceleration occurs if this Article permits the
payment at that time.
Section 10.6. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that, notwithstanding the provisions of Section 10.4, the
Company shall make any payment to the Trustee on account of the principal and
interest on the Debentures, two (2) business days after the happening of a
default in payment of the principal or interest on Senior Indebtedness, or two
(2)
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business days after receipt by the Company and the Trustee of written notice as
provided in Sections 10.4 and 10.12 of an Event of Default or an event which,
with the passage of time or the giving of notice or both, would constitute 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 shall be held by the Trustee, in trust for the
benefit of, and shall be paid forthwith 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 to or for the holders of Senior Indebtedness.
If a distribution is made to the Holders of Debentures that because of this
Article should not have been made to them, the Holders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and pay
it over to them as their interests may appear.
Section 10.7. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of principal or interest
on the Debentures to violate this Article, but failure to give such notice shall
not affect the subordination of the Debentures to the Senior Indebtedness
provided in this Article. Nothing in this Article 10 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 6.7.
Section 10.8. SUBROGATION.
After all Senior Indebtedness is paid in full and until the Debentures are
paid in full, Holders of the then outstanding Debentures shall be subrogated to
the rights of holders of Senior Indebtedness to receive distributions applicable
to Senior Indebtedness to the extent distributions otherwise payable to such
Holders have been applied to the payment of Senior Indebtedness. A distribution
made under this Article to
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holders of Senior Indebtedness which otherwise would have been made to
Certificateholders is not, as between the Company and Certificateholders, a
payment by the Company on Senior Indebtedness.
Section 10.9. RELATIVE RIGHTS.
This Article defines the relative rights of Certificateholders and holders
of Senior Indebtedness. Nothing said in this indenture shall:
(1) impair, as between the Company and Certificateholders, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Debentures in accordance with their terms;
(2) affect the relative rights of Certificateholders and creditors
of the Company other than holders of Senior Indebtedness; or
(3) prevent the Trustee or any Certificateholder from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of holders of Senior Indebtedness to receive distributions otherwise payable to
Certificateholders.
If the Company fails because of this Article to pay principal or interest
on a Debenture on the due date, the failure is still a Default or Event of
Default.
Section 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the subordination
of the indebtedness evidenced by the Debentures shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
Section 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
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Section 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on the Debentures
until it receives notice of facts that would cause a payment of principal or
interest on the Debentures to violate this Article. Only the Company, a
Representative or a holder of an issue of Senior Indebtedness that has no
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 10.13. TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments from
money or the proceeds of U.S. Government Obligations held in trust under Article
8 by the Trustee for the payment of principal of and interest on the Debentures
shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this Article 10, and none of the
Holders of the Debentures shall be obligated to pay over any such amount to the
Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
Section 10.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders of the Debentures or the Company or
any other person, money or assets to which any holders of Senior Indebtedness of
the Company shall be entitled by virtue of this Article 10 or otherwise.
ARTICLE 11
MISCELLANEOUS
Section 11.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be
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included in this Indenture by the TIA, the required provision shall control.
Section 11.2. NOTICES.
Any notice by the Company or the Trustee to the other is duly given if in
writing and delivered in person or mailed by first-class mail to the other's
address stated in Section 11.10. The Company or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice to a Certificateholder shall be mailed by first-class mail to
the address shown on the register kept by the Registrar or such other name and
addresses as provided to the Trustee pursuant to Sections 313(c)(2) and (3) of
the TIA. Failure to mail a notice or communication to a Certificateholder or any
defect in it shall not affect its sufficiency with respect to other
Certificateholders.
If a notice is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice to Certificateholders, it shall mail a copy
to the Trustee and each Agent at the same time.
All other notices shall be in writing.
Section 11.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Certificateholders may communicate pursuant to Section 312(b) of the TIA
with other Certificateholders with respect to their rights under this Indenture
or the Debentures. The Company, the Trustee, the Registrar and anyone else shall
have the protection of Section 312(c) of the TIA.
Section 11.4. 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:
(a) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for
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in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 11.5. 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 the 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 such person, he or she has
made such examination or investigation as is necessary to enable him or her 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 such
person, such condition or covenant has been complied with.
Section 11.6. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or a meeting of
Certificateholders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.7. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open. If a payment date is a Legal Holiday
at a place of payment, payment may be made at that place on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 11.8. NO RECOURSE AGAINST OTHERS.
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All liability described in the Debentures of any director, officer,
employee or stockholder, as such, of the Company is waived and released.
Section 11.9. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
Section 11.10. VARIABLE PROVISIONS.
"OFFICER" means the President, any Vice President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
The Company initially appoints itself [TRUSTEE?] as Paying Agent and
Registrar.
The first certificate pursuant to Section 4.3 shall be for the fiscal year
ending on September 30, 2001.
The reporting date for Section 7.6 is __________ of each year. The first
reporting date is ___________, 2001.
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
conditions.
The Company's address is:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The Trustee's address is:
SunTrust Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
-------------------------------
Section 11.11. GOVERNING LAW.
The internal laws of the State of Florida shall govern this Indenture and
the Debentures.
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Section 11.12. 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
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subsidiary. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 11.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Debentures
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 11.14. SEVERABILITY.
In case any provision in this Indenture or the Debentures shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SIGNATURES
Dated: as of ______________, 2001 PODS, INC.
By:
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
Dated: as of _____________, 2001
SUNTRUST BANK
By:
------------------------------
Its
------------------------------
Attest:
--------------------------
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