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EXHIBIT 10.2
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MAXTOR CORPORATION
(A DELAWARE CORPORATION)
AND
MAXTOR CORPORATION
(A CALIFORNIA CORPORATION)
GUARANTOR
TO
SECURITY PACIFIC NATIONAL BANK
TRUSTEE
______________
INDENTURE
DATED AS OF MARCH 1, 1987
______________
$100,000,000
5 3/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE MARCH 1, 2012
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MAXTOR CORPORATION
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE, DATED AS OF MARCH 1, 1987
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
----------------- -----------------
Section 310(a)(1) ..................................... 609
(a)(2) ..................................... 609
(a)(3) ..................................... Not Applicable
(a)(4) ..................................... Not Applicable
(b) ..................................... 608
610
Section 311(a) ..................................... 613(a)
(b) ..................................... 613(b)
(b)(2) ..................................... 613(b)
703(b)
Section 312(a) ..................................... 701
702(a)
(b) ..................................... 702(b)
(c) ..................................... 702(c)
Section 313(a) ..................................... 703(a)
(b) ..................................... 703(b)
(c) ..................................... 703(a), 703(b)
(d) ..................................... 703(c)
Section 314(a) ..................................... 704
(b) ..................................... Not Applicable
(c)(1) ..................................... 102
(c)(2) ..................................... 102
(c)(3) ..................................... Not Applicable
(d) ..................................... Not Applicable
(e) ..................................... 102
Section 315(a) ..................................... 601(a)
(b) ..................................... 602
703(a)(6)
(c) ..................................... 601(b)
(d) ..................................... 601(c)
(d)(1) ..................................... 601(a), 601(c)
(d)(2) ..................................... 601(c)(2)
(d)(3) ..................................... 601(c)(3)
(e) ..................................... 514
Section 316(a) ..................................... 101
(a)(1)(A) ..................................... 502
..................................... 512
(a)(1)(B) ..................................... 513
(a)(2) ..................................... Not Applicable
(b) ..................................... 508
Section 317(a)(1) ..................................... 503
(a)(2) ..................................... 504
(b) ..................................... 1003
Section 318(a) ..................................... 107
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS
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PAGE
Parties ...................................................... 1
Recitals of the Company ...................................... 1
Recitals of the Guarantor .................................... 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions
Act .......................................... 2
Affiliate; control ........................... 2
Authenticating Agent ......................... 2
Board of Directors ........................... 3
Board Resolution ............................. 3
Business Day ................................. 3
Closing Price ................................ 3
Commission ................................... 3
Common Stock ................................. 3
Company ...................................... 4
Company Request; Company Order ............... 4
Conversion price ............................. 4
Corporate Trust Office ....................... 4
Corporation .................................. 4
Debenture Register; Debenture Registrar ...... 4
Defaulted Interest ........................... 4
Event of Default ............................. 4
Guarantee .................................... 4
Guarantor .................................... 4
Holder ....................................... 5
Indenture .................................... 5
Interest Payment Date ........................ 5
Maturity ..................................... 5
Officers' Certificate ........................ 5
Opinion of Counsel ........................... 5
Outstanding .................................. 5
Paying Agent ................................. 6
Person ....................................... 6
Predecessor Debenture ........................ 6
Redemption Date .............................. 6
Redemption Price ............................. 6
Regular Record Date .......................... 6
Responsible Officer .......................... 7
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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Senior Indebtedness........................................ 7
Special Record Date........................................ 7
Stated Maturity............................................ 7
Subsidiary................................................. 7
Trustee.................................................... 8
Trust Indenture Act........................................ 8
Vice President............................................. 8
Section 102. Compliance Certificates and Opinions....................... 8
Section 103. Form of Documents Delivered to Trustee..................... 9
Section 104. Acts of Holders............................................ 9
Section 105. Notices, Etc., to Trustee, Company or Guarantor............ 11
Section 106. Notice to Holders; Waiver.................................. 11
Section 107. Conflict with Trust Indenture Act.......................... 12
Section 108. Effect of Headings and Table of Contents................... 12
Section 109. Successors and Assigns..................................... 12
Section 110. Separability Clause........................................ 12
Section 111. Benefits of Indenture...................................... 12
Section 112. Governing Law.............................................. 12
Section 113. Legal Holidays............................................. 12
ARTICLE TWO
Debenture Forms
Section 201. Forms Generally............................................ 13
Section 202. Form of Face of Debenture.................................. 13
Section 203. Form of Reverse of Debenture............................... 15
Section 204. Form of Guarantee.......................................... 21
Section 205. Form of Trustee's Certificate of Authentication............ 23
ARTICLE THREE
The Debentures
Section 301. Title and Terms............................................ 23
Section 302. Denominations.............................................. 24
Section 303. Execution, Authentication, Delivery and Dating of
Debentures............................................... 24
Section 304. Guarantee.................................................. 25
Section 305. Execution, Authentication, Delivery and Dating............. 25
Section 306. Temporary Debentures....................................... 26
Section 307. Registration, Registration of Transfer and Exchange........ 26
Section 308. Mutilated, Destroyed, Lost and Stolen Debentures........... 28
Section 309. Payment of Interest; Interest Rights Preserved............. 29
Section 310. Persons Deemed Owners...................................... 30
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Section 311. Cancellation.............................................. 30
Section 312. Computation of Interest................................... 31
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture................... 31
Section 402. Application of Trust Money................................ 32
Section 403. Release of Paying Agent................................... 33
Section 404. Unclaimed Moneys.......................................... 33
ARTICLE FIVE
Remedies
Section 501. Events of Default......................................... 33
Section 502. Acceleration of Maturity; Rescission and Annulment........ 35
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................. 36
Section 504. Trustee May File Proofs of Claim.......................... 37
Section 505. Trustee May Enforce Claims Without Possession of
Debentures.............................................. 38
Section 506. Application of Money Collected............................ 38
Section 507. Limitation on Suits....................................... 39
Section 508. Unconditional Right of Holders to Receive Principal
Premium and Interest and to Convert..................... 40
Section 509. Restoration of Rights and Remedies........................ 40
Section 510. Rights and Remedies Cumulative............................ 40
Section 511. Delay or Omission Not Waiver.............................. 40
Section 512. Control by Holders........................................ 41
Section 513. Waiver of Past Defaults................................... 41
Section 514. Undertaking for Costs..................................... 41
Section 515. Waiver of Stay or Extension Laws.......................... 42
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities....................... 42
Section 602. Notice of Defaults........................................ 43
Section 603. Certain Rights of Trustee................................. 44
Section 604. Not Responsible for Recitals or Issuance of Debentures.... 45
Section 605. May Hold Debentures....................................... 45
Section 606. Money Held in Trust....................................... 45
Section 607. Compensation and Reimbursement............................ 46
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PAGE
Section 608. Disqualification; Conflicting Interests ............................. 46
(a) Elimination of Conflicting Interest or Resignation ............ 46
(b) Notice of Failure to Eliminate Conflicting Interest
or Resign ................................................... 46
(c) "Conflicting Interest" Defined ................................ 46
(d) Definitions of Certain Terms Used in This Section ............. 50
(e) Calculation of Percentages of Securities ...................... 51
Section 609. Corporate Trustee Required; Eligibility .............................. 52
Section 610. Resignation and Removal; Appointment of Successor .................... 53
Section 611. Acceptance of Appointment by Successor ............................... 54
Section 612. Merger, Conversion, Consolidation or Succession to Business .......... 55
Section 613. Preferential Collection of Claims Against Company .................... 55
(a) Segregation and Appointment of Certain Collections
by Trustee, Certain Exceptions ............................... 55
(b) Certain Creditor Relationships Excluded from
Segregation and Apportionment ................................ 58
(c) Definitions of Certain Terms Used in This Section .............. 59
Section 614. Appointment of Authenticating Agent .................................. 59
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders ............ 61
Section 702. Preservation of Information; Communications to Holders ............... 62
Section 703. Reports by Trustee ................................................... 63
Section 704. Reports by Company and the Guarantor ................................. 65
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company or Guarantor May Consolidate, Etc., Only on Certain Terms .... 66
Section 802. Successor Corporation Substituted .................................... 67
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders ................... 67
Section 902. Supplemental Indentures with Consent of Holders ...................... 68
Section 903. Execution of Supplemental Indentures ................................. 69
Section 904. Effect of Supplemental Indentures .................................... 69
Section 905. Conformity with Trust Indenture Act .................................. 69
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PAGE
Section 906. Reference in Debentures to Supplemental
Indentures ........................................ 70
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest .......... 70
Section 1002. Maintenance of Office or Agency ..................... 70
Section 1003. Money for Debenture Payments to Be Held in Trust .... 71
Section 1004. Corporate Existence ................................. 72
Section 1005. Statement by Officers as to Default ................. 73
ARTICLE ELEVEN
Redemption of Debentures
Section 1101. Right of Redemption ................................. 73
Section 1102. Applicability of Article ............................ 73
Section 1103. Election to Redeem; Notice to Trustee ............... 73
Section 1104. Selection by Trustee of Debentures to be Redeemed ... 73
Section 1105. Notice of Redemption ................................ 74
Section 1106. Deposit of Redemption Price ......................... 75
Section 1107. Debentures Payable on Redemption Date ............... 75
Section 1108. Debentures Redeemed in Part ......................... 76
ARTICLE TWELVE
Sinking Fund
Section 1201. Sinking Fund Payments ............................... 76
Section 1202. Satisfaction of Sinking Fund Payments with
Debentures ........................................ 76
Section 1203. Redemption of Debentures for Sinking Fund ........... 77
ARTICLE THIRTEEN
Conversion of Debentures
Section 1301. Conversion Privilege and Conversion Price ............ 77
Section 1302. Exercise of Conversion Privilege ..................... 78
Section 1303. Fractions of Shares .................................. 79
Section 1304. Adjustment of Conversion Price ....................... 80
Section 1305. Notice of Adjustment of Conversion Price ............. 82
Section 1306. Notice of Certain Corporate Action ................... 83
Section 1307. Company to Reserve Common Stock ...................... 84
Section 1308. Taxes on Conversions ................................. 84
Section 1309. Cancellation of Converted Debentures ................. 84
Section 1310. Provisions in Case of Consolidation, Merger or
Sale of Assets ..................................... 84
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Section 1311. Disclaimer by Trustee of Responsibility for
Certain Matters ................................... 85
ARTICLE FOURTEEN
Subordination
Section 1401. Agreement of Subordination .......................... 85
Section 1402. Payments to Holders of Debentures ................... 86
Section 1403. Subrogation of Debentures ........................... 88
Section 1404. Authorization by Holders of Debentures .............. 89
Section 1405. Notices to Trustee and Senior Indebtedness Holders .. 89
Section 1406. Trustee's Relation to Senior Indebtedness ........... 90
Section 1407. No Impairment of Subordination ...................... 91
Testimonium ........................................................ 92
Signatures and Seals ............................................... 92
Acknowledgments ................................................... 93
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INDENTURE, dated as of March 1, 1987, between Maxtor Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Maxtor Corporation, a corporation duly
organized and existing under the laws of the State of California (herein called
the "Guarantor"), having its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Security Pacific National Bank, a national banking
association, as Trustee (herein called the "Trustee").
Recitals of the Company
The Company has duly authorized the creation of an issue of its 5-3/4%
Convertible Subordinated Debentures due March 1, 2012 (herein called the
"Debentures") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Debentures, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
Recitals of the Guarantor
The Guarantor desires to make the Guarantees provided for herein and to
provide therefor the Guarantor has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Guarantees, when executed by the
Guarantor and endorsed on the Debentures and delivered hereunder, the valid
obligations of the Guarantor, and to make this Indenture a valid agreement of
the Guarantor, in accordance with their and its terms, have been done.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Debentures, as
follows:
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ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein with are defined in the Trust
Indenture Act, either directly or by reference herein, have the meanings
assigned to them therein;
(3) all accounting terms (including without limitation "capital
leases" and "retained earnings") not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the trustee to act
on behalf of the Trustee to authenticate Debentures.
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"Board of Directors" means either the board of directors of the Company or
the Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or the Guarantor, as the case may be,
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
"Closing Price" means with respect to the Common Stock of the Company on
any day, (i) the last reported sale price regular way or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case on the New York Stock Exchange, or
(ii) if the Common Stock is not listed or admitted to trading on such Exchange,
the last reported sales price regular way, or in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or (iii) if the Common Stock is
not listed or admitted to trading on any national securities exchange, the
closing sales price as reported by the National Association of Securities
Dealers' Automated Quotation System ("NASDAQ"), and if the closing sales price
is not reported by NASDAQ, the average of the closing bid and asked prices as
furnished by any New York Stock Exchange member firm selected from time to time
by the Company for that purpose.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties at such time.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of Section 1310, shares issuable on conversion of Debentures shall
include only shares of the class designated as Common Stock of the Company at
the date of this Indenture or shares of any class or
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classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company or the Guarantor, as the case may be, by its
Chairman of the Board, a Vice Chairman, its President or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"conversion price" has the meaning specified in Section 1301.
"Corporate Trust Office" means the principal office of the Trustee in the
Borough of Manhattan, The City of New York, at which at any particular time its
corporate trust business shall be administered.
"corporation" includes corporations, associations, companies and business
trusts.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 307.
"Defaulted Interest" has the meaning specified in Section 309.
"Event of Default" has the meaning specified in Section 501.
"Guarantee" means any guarantee of the Guarantor endorsed on a Debenture
authenticated and delivered pursuant to this Indenture and shall include the
guarantee set forth in Section 304.
"Guarantor" means the Person named as the Guarantor in the first paragraph
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor corporation.
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"Holder" means a Person in whose name a Debenture is registered in the
Debenture Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Debentures.
"Maturity" when used with respect to any Debenture means the date on which
the principal of such Debenture becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company or the Guarantor, as the case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or the Guarantor, and who shall be
acceptable to the Trustee.
"Outstanding" when used with respect to Debentures means, as of the date
of determination, all Debentures theretofore authenticated and delivered under
this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Debentures for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Debentures; provided that, if such Debentures are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Debentures in exchange for or in lieu of which other Debentures
have been authenticated and delivered pursuant to this Indenture;
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provided, however, that in determining whether the Holder of the requisite
principal amount of the Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company, the Guarantor or any other obligor upon the Debentures or any
Affiliate of the Company, the Guarantor or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Debentures which the
Trustee knows to be so owned shall be so disregarded. Debentures so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not the Company, the
Guarantor or any other obligor upon the Debentures or any Affiliate of the
Company, the Guarantor or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debentures on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by
such particular Debenture; and, for the purposes of this definition, any
Debenture authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Debenture shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Debenture.
"Redemption Date", when used with respect to any Debenture to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the February 15 or August 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
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"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Senior Indebtedness" means the principal of and premium, if any, and
unpaid interest on (a) indebtedness (other than the Debentures) of the Company
or the Guarantor, as the case may be, whether or not secured and whether
heretofore or hereafter (i) incurred for borrowed money or (ii) evidenced by a
note or similar instrument given in connection with the acquisition by the
Company or the Guarantor of any business, properties or assets, including
securities (but not including any account payable or other obligation created
or assumed by the Company or the Guarantor in the ordinary course of business
in connection with the obtaining of materials or services), (b) any refundings,
renewals, extensions or deferrals of any such indebtedness, and (c) obligations
under capital leases, in each case for the payment of which the Company or the
Guarantor is liable directly or indirectly by guarantee, letter of credit,
obligation to purchase or acquire or otherwise, unless the terms of the
instrument evidencing such indebtedness or capital lease or pursuant to which
such indebtedness or capital lease is outstanding specifically provide that
such indebtedness or capital lease is not superior in right of payment to the
Debentures.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Debenture or any
installment of interest thereon, means the date specified in such Debenture as
the fixed date on which the principal of such Debenture or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or the
Guarantor or by one or more other Subsidiaries, or by the Company or the
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Guarantor and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in
Section 905.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company or the Guarantor to the
Trustee to take any action under any provision of this Indenture, the Company
or the Guarantor, as the case may be, shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or the Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or the
Guarantor, as the case may be, stating that the information with respect to
such factual matters is in the possession of the Company or the Guarantor, as
the case may be, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent
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duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company or the Guarantor, as the case may be. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company or the
Guarantor, as the case may be, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Debentures shall be proved by the Debenture Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, the
Company or the Guarantor, as the case may be, in reliance thereon, whether or
not notation of such action is made upon such Debenture.
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Section 105. Notices, Etc., to Trustee, Company or Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or the Guarantor, as
the case may be, shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to or with the Trustee at ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Maxtor
Administrator, or
(2) the Company or the Guarantor, as the case may be, by the Trustee
or by any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company or the Guarantor, as the case may be,
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company or the Guarantor, as the
case may be.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event or report to
Holders, such notice or report shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at his address as it appears in
the Debenture Register (and to such other addressees a may be required in the
case of such notice or report under Section 313(c) of the Trust Indenture Act),
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice or report. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
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such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company, or the
Guarantor, shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture, the Debentures or the Guarantees
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture, the Debentures or the Guarantees, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness and the Holders of
Debentures, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 112. Governing Law.
This Indenture and the Debentures shall be governed by and construed in
accordance with the laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture or the last date on which a Holder has the right to
convert his Debentures shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Debentures) payment of interest or
principal (and premium, if any) or conversion of the Debentures need not be
made on such date, but may be made on the next succeeding
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Business Day with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, or on such last day for
conversion, provided that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
ARTICLE TWO
DEBENTURE FORMS
Section 201. Forms Generally.
The Debentures and the Trustee's certificates of authentication shall be
in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may
consistently herewith, be determined by the officers executing such Debentures,
as evidenced by their execution of such Debentures.
The definitive Debentures shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may
be produced in any other matter permitted by the rules of any securities
exchange on which the Debentures may be listed, all as determined by the
officers executing such Debentures, as evidenced by their execution of such
Debentures.
Section 202. Form of Face Debenture.
MAXTOR CORPORATION
5-3/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE MARCH 1, 2012
No. $
------------ -----------
MAXTOR CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company," which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ,
or registered assigns, the principal sum of Dollars on March
1, 2012, and to pay interest thereon from March 5,1987 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on March 1 and
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September 1 in each year, commencing September 1, 1987 at the rate of 5-3/4%
per annum, until the principal hereof is paid or made available for payment.
The interest so payable, and punctuality paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the February 15 or August 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Debentures not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. Payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Debenture Register.
Reference is hereby made to the further provisions of this Debenture set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, Maxtor Corporation has caused this instrument to be
duly executed under its corporate seal.
Dated:
MAXTOR CORPORATION
By
---------------------------------
President
Attest:
------------------------------------
Secretary
SECTION 203. Form of Reverse of Debenture.
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its 5-3/4% Convertible Subordinated Debentures due
March 1, 2012 (herein called the "Debentures"), limited in aggregate principal
amount to not more than $100,000,000 issued and to be issued under an Indenture,
dated as of March 1, 1987 (herein called the "Indenture"), between the Company,
Maxtor Corporation, a corporation duly organized and existing under the laws of
the State of California (herein called the "Guarantor" which term includes any
successor guarantor under the Indenture hereinafter referred to) and Security
Pacific National Bank as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee, the holders of Senior Indebtedness and
the Holders of the Debentures and of the terms upon which the Debentures are,
and are to be, authenticated and delivered.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Debenture is entitled, at his option, at any time on or before
the close of business on March 1, 2012, or in case this Debenture or a portion
hereof is called for redemption, then in respect of this Debenture or such
portion hereof until and including, but (unless the Company and the Guarantor
default in making the payment due upon redemption) not after, the close
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of business on the business day prior to the Redemption Date, to convert this
Debenture (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount hereof, or of such portion,
into fully paid and nonassessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock of the Company at a conversion
price equal to $40.00 aggregate principal amount of Debentures for each share
of Common Stock (or at the current adjusted conversion price if an adjustment
has been made as provided in the Indenture) by surrender of this Debenture,
duly endorsed or assigned to the Company or in blank, to the Company at its
office or agency maintained for such purpose in the Borough of Manhattan, The
City of New York, accompanied by written notice to the Company that the Holder
hereof elects to convert this Debenture, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
case such surrender shall be made during the period from the close of business
on any Regular Record Date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date (unless this Debenture or the
portion thereof being converted has been called for redemption during such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Debenture then being
converted Subject to the aforesaid requirement for payment and, in the case
of a conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right of the
Holder of this Debenture (or any Predecessor Debenture) of record at such
Regular Record Date to receive an installment of interest (with certain
exceptions provided in the Indenture), no payment or adjustment is to be made
on conversion for interest accrued hereon or for dividends on the Common Stock
issued on conversion. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional interest the
Company shall pay a cash adjustment as provided in the Indenture. The
conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the sale or transfer of all or
substantially all of the assets of the Company, the Indenture shall be amended,
without the consent of any Holders of Debentures, so that this Debenture, if
then outstanding, will be convertible thereafter, during the period this
Debenture shall be convertible as specified above, only into the
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kind and amount of securities, cash and other property receivable upon the
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which this Debenture might have been converted
immediately prior to such consolidation, merger, sale or transfer.
The Debentures are subject to redemption at any time, upon not less than 30
days' nor more than 60 days' notice by mail, as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount), if redeemed during the twelve-month period
beginning March 1 of the year indicated, plus accrued interest on the date of
redemption:
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
1987........................ 105.750% 1992.................... 102.875%
1988........................ 105.175% 1993.................... 102.300%
1989........................ 104.600% 1994.................... 101.725%
1990........................ 104.025% 1995.................... 101.150%
1991........................ 103.450% 1996.................... 100.575%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Debentures, or one or more
Predecessor Debentures, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
Notwithstanding the foregoing, the Company may not, prior to March 1, 1989,
redeem any Debentures unless the Closing Price of the Common Stock on twenty of
the thirty consecutive days on which there was such a price immediately
preceding the fifth day prior to the initial publication of the notice of such
redemption is at least 150% of the conversion price in effect at the close of
business on such day.
The sinking fund provides for the redemption on March 1 in each year
beginning with March 1, 1998 and ending with March 1, 2011 of 5% of the maximum
aggregate principal amount of Debentures issued, at a Redemption Price equal to
100% of the principal amount together with interest accrued to the date fixed
for redemption. Debentures acquired or redeemed by the Company otherwise than
through sinking fund payments may be credited against subsequent sinking fund
payments otherwise required to be made.
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In the event of redemption or conversion of this Debenture in part only, a
new Debenture or Debentures for the unredeemed or unconverted portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by the Debentures is, to the extent provided in
the Indenture, subordinated and subject in right of payment to the prior payment
in full of all Senior Indebtedness of the Company, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by his acceptance hereof, agrees to be bound by such provisions
of the Indenture and authorizes and directs the Trustee to take such action on
his behalf as may be necessary or appropriate to acknowledge or effectuate the
subordination of this Debenture as provided in the Indenture and appoints the
Trustee his attorney-in-fact for any and all such purposes. Each Holder of this
Debenture, by his acceptance hereof, agrees that each holder of Senior
Indebtedness, whether created or acquired before or after the issuance of the
Debentures, shall be deemed conclusively to have relied on such provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
If an Event of Default shall occur and be continuing, the principal of all
the Debentures may be declared due and payable in the manner and with the affect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company or the Guarantor and the rights and obligations of the Company or the
Guarantor and the rights of the Holders of the Debentures under the Indenture at
any time by the Company or the Guarantor, as the case may be, and the Trustee
with the consent of the Holders of 66 2/3% in aggregate principal amount of the
Debentures at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Debentures at the time Outstanding, on behalf of the Holders of all the
Debentures, to waive compliance by the Company or the Guarantor, as the case may
be, with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Debenture shall be conclusive and binding upon such Holder and upon all
future Holders of this Debenture and of any Debenture issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
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whether or not notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
of the Guarantee endorsed hereon or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on this Debenture at the times,
place and rate, and in the coin or currency, herein prescribed or to convert
this Debenture as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Debenture
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Debenture Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Debenture, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made to the Holder for any such registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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(FORM OF CONVERSION NOTICE)
TO MAXTOR CORPORATION:
The undersigned owner of this Debenture hereby irrevocably exercises the
option to convert this Debenture, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
Maxtor Corporation in accordance with the terms of the Indenture referred to in
this Debenture, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Debentures representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account
of interest accompanies this Debenture.
Dated:
Fill in for registration of shares of
Common Stock and Debentures if
to be issued otherwise than to the
registered holder.
------------------------------------------
Signature
-------------------------------------
Name
-------------------------------------
Address
-------------------------------------
Please print name and address
(including zip code number)
SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING NUMBER
-------------------------------------
Principal Amount to be Converted
(in an integral multiple of $1,000, if
less than all):
$____
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Section 204. Form of Guarantee.
GUARANTEE OF MAXTOR CORPORATION
FOR VALUE RECEIVED, Maxtor Corporation, a corporation duly organized and
existing under the laws of the State of California (herein called the
"Guarantor" which term includes any successor corporation under the
Indenture referred to in the Debenture upon which this Guarantee is endorsed),
hereby unconditionally guarantees to the Holder (which term, as well as other
capitalized terms used herein, shall have the respective meanings assigned in
the said Indenture, unless otherwise defined herein) of the Debenture
authenticated and delivered by the Trustee upon which this Guarantee is
endorsed the due and punctual payment of the principal of (and premium, if any)
and interest on such Debenture when and as the same shall become due and
payable, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise, according to the terms of such Debenture and all
of the Indenture referred to therein. In case of the failure of the Company
punctually to make any such principal, premium or interest payment, the
Guarantor hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise, and if such
payment were made by the Company. The Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Debenture or said Indenture, the absence
of any action to enforce the same, the waiver or consent by the Holder of such
Debenture or by the Trustee with respect to any provisions thereof or of said
Indenture, the recovery of any judgment against the Company or any action to
enforce the same or any other circumstance which might otherwise constitute
legal or equitable discharge or defense of a guarantor. The Guarantor hereby
waives diligence, presentment, demand of payment, filing claims with a court
in the event of merger or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to such
Debenture or the indebtedness evidenced thereby and all demands whatsoever, and
convenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in such Debenture and in the Guarantee.
No reference herein to the Indenture and no provision of this Guarantee or
of the Indenture shall alter or impair the Guarantee of the Guarantor which is
absolute and unconditional, of the due and punctual payment of the
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principal of (and premium,if any) and interest on the Debenture upon which this
Guarantee is endorsed.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Debenture upon which this Guarantee is
endorsed shall have been executed by the Trustee under the Indenture referred
to above by the manual signature of one of its authorized officers.
The indebtedness evidenced by the Guarantees of the Debentures is, to the
extent provided in the Indenture, subordinated and subject in right of payment
to the prior payment in full of all Senior Indebtedness of the Guarantor, and
this Guarantee is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Debenture, by his acceptance hereof,
agrees to be bound by such provisions of the Indenture and authorizes and
directs the Trustee to take such action on his behalf as may be necessary or
appropriate to acknowledge or effectuate the subordination of this Guarantee as
provided in the Indenture and appoints the Trustee his attorney-in-fact for any
and all such purposes. Each Holder of this debenture, by his acceptance hereof,
agrees that each holder of Senior Indebtedness of the Guarantor, whether
created or acquired before or after the issuance of the Debenture, shall be
deemed conclusively to have relied on such provisions in acquiring or
continuing to hold, such Senior Indebtedness.
If an Event of Default shall occur and be continuing, the principal of all
the Debentures may be declared due and payable in the manner and with the
effect provided in the Indenture.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed under its corporate seal.
Dated:
MAXTOR CORPORATION
By
-------------------------------------
President
Attest:
---------------------------------------
Secretary
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Section 205. Form of Trustee's Certificate of Authentication.
This is one of the Debentures referred to in the within-mentioned
Indenture.
Security Pacific National Bank
as Trustee
By
----------------------------
Authorized Officer
ARTICLE THREE
The Debentures
Section 301. Title and Terms.
The aggregate principal amount of Debentures which may be authenticated and
delivered under this Indenture is limited to not more than the aggregate
principal amount of Debentures specified in the Officer's Certificate referred
to in the third paragraph of Section 303 except for Debentures authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Debentures pursuant to Section 305, 306, 307, 906, 1108 or 1302.
The Debentures shall be known and designated as the "5 1/4% Convertible
Subordinated Debentures due March 1, 2012" of the Company. Their Stated
Maturity shall be March 1, 2012, and they shall bear interest at the rate of
5 3/4% per annum, from March 5, 1987 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, as the case may be,
payable semiannually on March 1 and September 1, commencing September 1, 1987,
until the principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the Debentures
shall be payable at the office or agency of the Company in the Borough of
Manhattan, The City of New York maintained for such purpose and at any other
office or agency maintained by the Company for such purpose; provided, however,
that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Debenture Register.
The Debentures shall be redeemable as provided in Article Eleven.
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The Debentures shall be entitled to the benefits, and be redeemable
through operation, of the sinking fund as provided in Article Twelve.
The Debentures shall be convertible into Common Stock of the Company as
provided in Article Thirteen.
The Debentures shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Fourteen.
Section 302. Denominations.
The Debentures shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating of Debentures.
The Debentures shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman, its President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Debentures; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Debentures as in
this Indenture provided and not otherwise.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder.
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Section 304. Guarantee.
The Guarantor hereby unconditionally guarantees to each Holder of a
Debenture authenticated and delivered by the Trustee upon which a Guarantee is
endorsed, and to each Holder of any coupon appertaining thereto, the due and
punctual payment of the principal of (and premium, if any) and interest on such
Debenture when and as the same shall become due and payable, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise, according to the terms of such Debenture and of this Indenture. In
case of the failure of the Company punctually to make any such principal,
premium or interest payment, the Guarantor hereby agrees to cause any such
payment to be made punctually when and as the same shall become due and
payable, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise, and as if such payment were being made by the
Company. The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
such Debenture or this Indenture, the absence of any action to enforce the
same, the waiver or consent by the Holder of such Debenture or by the Trustee
with respect to any provisions thereof or of this Indenture, the recovery of
any judgment against the Company or any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. The Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to such Debenture or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Debentures and in the Guarantees.
The Guarantees shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Fourteen.
Section 305. Execution, Authentication, Delivery and Dating.
The Guarantees shall be executed on behalf of the Guarantor by its
Chairman of the Board, its Vice Chairman, its President or one of its Vice
Presidents, under is corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Debentures may be manual or facsimile.
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Guarantees bearing the manual or facsimile signatures of individuals who
where at any time the proper officers of the Guarantor shall bind the
Guarantor, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Guarantor or
did not hold such offices at the date of such Guarantees.
Each Guarantee shall be dated the date of the Debenture on which such
Guarantee is endorsed.
The delivery of any Debenture by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee endorsed
thereon on behalf of the Guarantor.
Section 306. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Debentures which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Debentures in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Debentures may determine, as evidenced by their
execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Debentures the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Debentures
of authorized denominations. Until so exchanged the temporary Debentures shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debentures.
Section 307. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Debenture Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the
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registration of Debentures and of transfers of Debentures. The Trustee is
hereby appointed "Debenture Registrar" for the purpose of registering
Debentures and transfers of Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Debentures of any authorized denominations, of a like aggregate principal
amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Debentures
which the Holder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Section 306, 906, 1108 or 1302 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Debenture during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Debentures selected for redemption under Section 1104 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
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exchange any Debenture so selected for redemption in whole or in part, except
the unredeemed portion of any Debenture being redeemed in part.
Section 308. Mutilated, Destroyed, Lost and Stolen Debentures.
If any mutilated Debenture is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Debenture of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Debenture and (ii)
such bond, security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Debenture has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost of
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.
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Section 309. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Debenture (or one or more Predecessor Debentures) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in
the Debenture Register, not less than 10 days prior to such Special Record
Date therefor having been so mailed, such Defaulted Interest
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shall be paid to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debenture.
In the case of any Debenture which is converted after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Debenture whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Debenture (or one or more Predecessor Debentures) is
registered at the close of business on such Regular Record Date.
SECTION 310. Persons Deemed Owners.
Prior to due presentment of a Debenture for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 309) interest on such Debenture and for all other
purposes whatsoever, whether or not such Debenture be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 311. Cancellation.
All Debentures surrendered for payment, redemption, registration of
transfer or exchange or conversion or for credit against any sinking fund
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payment pursuant to Section 1202 shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Debentures previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Debentures so delivered
shall be promptly cancelled by the Trustee. No Debentures shall be authenticated
in lieu of or in exchange for any Debentures cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Debentures held by the Trustee shall be disposed of as directed by a Company
Order.
Section 312. Computation of Interest.
Interest on the Debentures shall be computed on the basis of a year of
twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Debentures herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 308 and
(ii) Debentures for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Debentures not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
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(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company or the Guarantor, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Debentures not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest to the date of such deposit (in the case of
Debentures which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be.
(2) the Company or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company and the Guarantor to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614
and, if money shall have been deposited with the Trustee pursuant to sub-clause
(B) of clause (1) of this Section, the obligations of the Trustee under Section
402 and the last paragraph of Section 1003, shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee. All moneys deposited
with the Trustee pursuant to Section 401 (and held by it or any Paying Agent)
for the payment of Debentures subsequently converted shall be returned to the
Company upon Company Request.
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Section 403. Release of Paying Agent.
In connection with the satisfaction and discharge of this Indenture all
moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee and thereupon such
Paying Agent shall be released from all further liability with respect to such
moneys.
Section 404. Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any Paying Agent for
the payment of the principal of (and premium, if any) or interest on any
Debenture and not applied but remaining unclaimed for two years after the date
upon which such principal (and premium, if any) or interest shall have become
due and payable, shall be repaid to the Company by the Trustee or such Paying
Agent on demand and the Holder of such Debenture shall thereafter look only to
the Company for any payment which such Holder may be entitled to collect and all
liability of the Trustee or any Paying Agent with respect to such moneys shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment may at the expense of the
Company cause to be published once a week for two successive weeks (in each case
on any day of the week) in a newspaper in the Borough of Manhattan, New York,
New York, a notice that said moneys have not been so applied and that after a
date named therein any unclaimed balance of said moneys then remaining will be
returned to the Company. It shall not be necessary for more than one such
publication to be made in the same newspaper.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article Fourteen or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Debenture when it
becomes due and payable, and continuance of such default for a period of 30
days; or
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(2) default in the payment of the principal of (or premium, if any,
on) any Debenture at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of Sections 1201 and 1203; or
(4) default in the performance, or breach, of any covenant or
agreement of the Company or the Guarantor, in this Indenture (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company and the Guarantor by the
Trustee or to the Company, the Guarantor and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Outstanding Debentures a
written notice specifying such defaults or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed in excess of $10,000,000 by the Company or
the Guarantor under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed in excess of $10,000,000 by the Company or
the Guarantor, whether such indebtedness now exists or shall hereafter be
created, which default (i) shall consist of a failure to pay such
indebtedness at final maturity and after the expiration of any applicable
grace period or (ii) shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such acceleration having
been rescinded or annulled, or such indebtedness having been discharged,
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company and the Guarantor by the
Trustee or to the Company, the Guarantor and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Outstanding Debentures a
written notice specifying such default and requiring the Company to cause
such acceleration to be rescinded or annulled or cause such indebtedness
to be discharged and stating that such notice is a "Notice of Default"
hereunder, provided, however, that, subject to the provisions of Section
601 and 602, the Trustee shall not be deemed to have knowledge of such
default unless either (A) a Responsible Officer in the Corporate Trust
Office of the Trustee shall have actual knowledge of such default or (B)
the Trustee
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shall have received written notice thereof from the Company, from the
Guarantor, from any Holder, from the holder of any such indebtedness or
from the trustee under any such mortgage, indenture or other instrument; or
(6) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or the Guarantor a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or the Guarantor under Federal bankruptcy law or any other
applicable Federal or State law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company
or the Guarantor or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the institution by the Company or the Guarantor of proceedings
to be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it or a petition or answer or consent seeking reorganization or
relief under Federal bankruptcy law or any other applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or the Guarantor or of any substantial
part of its property, or the making by it of an assignment for the benefit
of creditors or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company or the Guarantor in furtherance of any such action.
Section 502. Acceleration of Maturity ; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debentures may declare the principal of
all the Debentures to be due and payable immediately, by a notice in
writing to the Company and the Guarantor (and to the Trustee if given by
Holders), and upon any such declaration such principal shall become
immediately due and payable.
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At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Outstanding Debentures, by written notice
to the Company, the Guarantor and the Trustee, may rescind and annual such
declaration and its consequences if
(1) the Company or the Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all Debentures.
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne by
the Debentures, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the nonpayment of the principal
of Debentures which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
Each of the Company and the Guarantor covenant that if
(1) default is made in the payment of any installment of interest on
any Debenture when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Debenture at the Maturity thereof,
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the Company or the Guarantor, as the case may be, will, upon demand of the
Trustee, pay to it, for he benefit of the Holders of such Debentures, the whole
amount then due and payable on such debentures for principal (and premium, if
any) and interest, with interest upon the overdue principal (and premium, if
any) and, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest, at the rate borne by the
Debentures; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company and the Guarantor fail to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company, the Guarantor or any other obligor upon
the Debentures and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company, the Guarantor or any
other obligor upon the Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, the Guarantor or any other obligor
upon the Debentures or the property of the Company, the Guarantor or such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Debentures shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company or the Guarantor for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise.
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(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Debentures
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of Debentures.
All rights of action and claims under this Indenture or the Debentures may
be prosecuted and enforced by the Trustee without the possession of any of the
Debentures or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Debentures in respect of which such judgment has been
recovered.
Section 506. Application of Money Collected.
Subject to Article Fourteen, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
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of principal (or premium, if any) or interest, upon presentation of the
Debentures and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
607;
Second: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debentures in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Debentures for principal (and premium, if
any) and interest, respectively; and
Third: The balance, if any, to the Company.
Section 507. Limitation on Suits.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given notice to the Trustee of a
continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Debentures shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Debentures;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
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or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any
Debenture shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 309)
interest on such Debenture on the respective Stated Maturities expressed in such
Debenture (or, in the case of redemption, on the Redemption Date) and to convert
such Debenture in accordance with Article Thirteen and to institute suit for the
enforcement of any such payment and right to convert, and such rights shall not
be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debenture to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time
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to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the Outstanding
Debentures shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Debentures may on behalf of the Holders of all the Debentures
waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debenture, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Debenture affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debenture by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suite of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section shall not apply to any suit instituted by the Trustee, to any
suit
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instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Debentures, or to any suite
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest on any Debenture on or after the respective
Stated Maturities expressed in such Debenture (or, in the case of redemption,
on or after the Redemption Date) or for the enforcement of the right to convert
any Debenture in accordance with Article Thirteen.
Section 515. Waiver of Stay or Extension Laws.
Each of the Company and the Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
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(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in aggregate principal amount of the
Outstanding Debentures relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture; and
(4) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Debenture Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Debenture or in the payment of any
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sinking fund installments, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and provided, further, that in the case of any default of the character
specified in Section 501(4), no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
Section 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company or the Guarantor
mentioned herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any actin hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel shall be fully and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
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(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note 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 and the Guarantor, personally or
by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company
or the Guarantor, as the case may be, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures. The Trustee shall not be
accountable for the use or application by the Company of Debentures or the
proceeds thereof.
Section 605. May Hold Debentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar or any other agent of the Company or the Guarantor, in its individual
or any other capacity, may become the owner or pledgee of Debentures and,
subject to Sections 608 and 613, may otherwise deal with the Company or the
Guarantor with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Debenture Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company or the Guarantor.
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SECTION 607. Compensation and Reimbursement.
The Company and the Guarantor agree
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company and the
Guarantor under this Section the Trustee shall have a lien prior to the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any)
or interest on Debentures.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, it shall, within 90 days after ascertaining that it has
such conflicting interest, either eliminate such conflicting interest or resign
in the manner and with the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section, the Trustee shall, within 10 days after the
expiration of such 90-day period, transmit by mail to all Holders, as their
names and addresses appear in the Debenture Register, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have a
conflicting interest if
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(1) the Trustee is trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other indenture is
a collateral trust indenture under which the only collateral consists of
Debentures issued under this Indenture, provided that there shall be
excluded from the operation of this paragraph any indenture or indentures
under which other securities, or certificates of interest or participation
in other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are hereafter
qualified under the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act that differences exist between the
provisions of this Indenture and the provisions of such other
indenture or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture and such other indenture or indentures,
or
(ii) the Company shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture and such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under one of such indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Debentures or an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct to indirect common control with
the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (i) one individual may be a director or an executive officer, or both,
of the Trustee and a director or an executive officer, or both, of the
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Company but may not be at the same time an executive officer of both the
Trustee and the Company; (ii) if and so long as the number of directors of
the Trustee in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a director of
the Company; and (iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent or
depositary, or in any other similar capacity, or, subject to the provisions
of paragraph (1) of the Subsection, to act as trustee, whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company not including the
Debentures issued under this Indenture and securities issued under any
other indenture under which the Trustee is also trustee, or (ii) 10% or
more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 5% or more of the voting securities of any person who,
to the knowledge of the Trustee, owns 10% or more of the voting securities
of, or controls directly or indirectly or is under direct or indirect
common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 10% or more of any class of security of any person
who, to the knowledge of the Trustee, owns 50% or more of the voting
securities of the Company; or
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(9) the Trustee owns, on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which would
have constituted a conflicting interest under paragraph (6), (7) or (8) of
this Subsection. As to any such securities of which the Trustee acquired
ownership through becoming executor, administrator or testamentary trustee
of an estate which included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such estate do
not exceed 25% of such voting securities or 25% of any such class of
security. Promptly after May 15 in each calendar year, the Trustee shall
make a check of its holdings of such securities in any of the
above-mentioned capacities as of such May 15. If the company fails to make
payment in full of the principal of (or premium, if any) or interest on any
of the Debentures when and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the Trustee shall make a prompt
check of its holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such 30-day period, and
after such date, notwithstanding the foregoing provisions of this
paragraph, all such securities so held by the Trustee, with sole or joint
control over such securities vested in it, shall, but only so long as such
failure shall continue, be considered as though beneficially owned by the
Trustee for the purpose of paragraphs (6), (7) and (8) of this Subsection.
The specification of percentages in paragraphs (5) to (9), inclusive, of
this Subsection shall not be construed as indicating that the ownership of such
percentages of the securities of a person is or is not necessary or sufficient
to constitute direct or indirect control for the purposes of paragraph (3) or
(7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed to be "in
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default" when a default in payment of principal shall have continued for 30
days or more and shall not have been cured; and (iii) the Trustee shall not be
deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter", when used with reference to the Company,
means every person who, within three years prior to the time as of which
the determination is made, has purchased from the Company with a view to,
or has offered or sold for the Company in connection with, the distribution
of any security of the Company outstanding at such time, or has
participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the direct
or indirect underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
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(5) The term "Company" means any obligor upon the Debentures
including, without limitation, the Guarantor.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom
is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares and the number of units if relating to
any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
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(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided however, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes and provided, further, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State authority and having its Corporate Trust Office in, or maintaining an
office or agency for the payment of principal of and interest and premium, if
any, on the Debentures in, the Borough of Manhattan, The City of New York. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
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SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company and the Guarantor. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Debentures, delivered
to the Trustee and to the Company and the Guarantor.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after written
request therefor by the Company, the Guarantor or by any Holder who has
been a bona fide Holder of a Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company, the Guarantor
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company or the Guarantor by a Board Resolution
may remove the Trustee, or (ii) subject to Section 514, any Holder who has been
a bona fide Holder of a Debenture for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company
and the Guarantor, by Board Resolutions, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in aggregate principal amount
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of the Outstanding Debentures delivered to the Company and the Guarantor and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Company and the Guarantor. If no successor
Trustee shall have been so appointed by the Company and the Guarantor, or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Debenture for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company and the Guarantor shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage prepaid, to
all Holders as their names and addresses appear in the Debenture Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and the Guarantor and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on request of
the Company, the Guarantor or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 607. Upon request of
any such successor Trustee, the Company and the Guarantor shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
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SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Debentures shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Debentures so authenticated with the same effect
as if such successor Trustee had itself authenticated such Debentures.
SECTION 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within four months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Debentures and the holders of other indenture securities, as defined in
Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four months' period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or deposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four months'
period, or an amount equal to the proceeds of any such property, if
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disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of the claim
hereinafter mentioned, upon any property held by it as security for any
such claim, if such claim was created after the beginning of such four
months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
Subsection (c) of this Section, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or (C),
against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such four months' period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
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manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceedings for reorganization is pending shall have
jurisdiction (i) to apportion among the Trustee, the Holders and the holders of
other indenture securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds thereof, or
(ii) in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee and the Holders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
four months' period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such four months' period
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it shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such four months' period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (c) of
this Section.
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(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of or interest on any of the Debentures or upon the other
indenture securities when and as such principal or interest becomes due and
payable;
(2) the term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, ▇▇▇▇ of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, ▇▇▇▇ of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the Debentures
including, without limitation, the Guarantor; and
(6) the term "Federal Bankruptcy Code" means the Bankruptcy Code or
Title 11 of the United States Code.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Debentures remain Outstanding the Trustee may
appoint an Authenticating Agent or Agents which shall be authorized to act on
behalf of the Trustee to authenticate Debentures issued upon exchange,
registration of transfer or partial redemption thereof or
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pursuant to Section 306, and Debentures so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Debentures by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall
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mail written notice of such appointment by first-class mail, postage prepaid,
to all Holders as their names and addresses appear in the Debenture Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent
herein. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment is made pursuant to this Section, the Debentures may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Debentures described in the within-mentioned Indenture.
_________________________
As Trustee
By_______________________
As Authenticating Agent
By_______________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names an Addresses of Holders.
The Company and the Guarantor will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 5 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
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(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company or the Guarantor of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Debenture Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Debenture
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Debenture for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Debentures and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five business days after the
receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), and as to the approximate
cost of mailing to such Holders the form of proxy or other communication,
if any, specified in such application.
If the trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 702(a) a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the
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reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants, and file with the Commission together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Debentures, by receiving and holding the same, agrees
with the Company, the Guarantor and the Trustee that neither the Company nor
the Guarantor nor the Trustee nor any agent of any of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 702(b), regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1987, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Debenture Register, a brief report dated as of such May
15 with respect to:
(1) its eligibility under Section 609 and its qualifications under
Section 608, or in lieu thereof, if to the best of its knowledge it has
continued to be eligible and qualified under said Sections, a written
statement to such effect;
(2) the character and amount of any advances made by the Trustee (as
such) which remain unpaid on the date of such report, and for the
reimbursement of which it claims or may claim a lien or charge, prior to
that of the Debentures, on any property or funds held or collected by it as
Trustee, except that the Trustee shall not be required (but may elect)
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to report such advances if such advances so remaining unpaid aggregate not
more than 1/2 of 1% of the principal amount of the Debentures Outstanding
on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Debentures, including, without limitation, the Guarantor) to the Trustee in
its individual capacity, on the date of such report, with a brief
description of any property held as collateral security therefor, except an
indebtedness based upon a creditor relationship arising in any manner
described in Section 613(b)(2), (3), (4) or (6);
(4) the property and funds, if any, physically in the possession of
the Trustee as such on the date of such report;
(5) any additional issue of Debentures which the Trustee has not
previously reported; and
(6) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Debentures, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Debenture Register, a brief report with respect to the
character and amount of any advances made by the Trustee (as such) since the
date of the last report transmitted pursuant to Subsection (a) of this Section
(or if no such report has yet been so transmitted, since the date of execution
of this instrument) for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Debentures, on property or funds held or
collected by it as Trustee and which it has not previously reported pursuant to
this Subsection, except that the Trustee shall not be required (but may elect)
to report such advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of the Debentures Outstanding at such time,
such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Debentures are listed, with the Commission and with the Company and the
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Guarantor. The Company will notify the Trustee when the Debentures are listed
on any stock exchange.
SECTION 704. Reports by Company and the Guarantor.
The Company and the Guarantor shall:
(1) file with the Trustee, within 15 days after the Company or the
Guarantor is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or the
Guarantor may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company or the Guarantor is not required to file information, documents or
reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company and the Guarantor with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Holders, as their names and addresses
appear in the Debenture Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company and the Guarantor pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company or Guarantor May Consolidate, Etc., Only on Certain Terms.
Neither the Company nor the Guarantor shall consolidate with or merge into
any other corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and neither the Company nor the
Guarantor shall permit any Person to consolidate with or merge into the Company
or the Guarantor, as the case may be, or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, or the
Guarantor, as the case may be, unless;
(1) in case the Company or the Guarantor shall consolidate with or
merge into another corporation or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company or the Guarantor is
merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company or the Guarantor
substantially as an entirety (i) shall be a corporation organized and
existing under the laws of the United States of America, any State thereof
or the District of Columbia, (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, in the case of the Company, the due and
punctual payment of the principal of (and premium, if any) and interest on
all the Debentures and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed, and, in the case of
the Guarantor, the due and punctual performance of the Guarantees and of
every covenant on the part of the Guarantor to be performed or observed and
(iii) in the case of the Company, shall have provided for conversion rights
in accordance with Section 1310;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company, the Guarantor
or a Subsidiary as a result of such transaction as having been incurred by
the Company, the Guarantor or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have occurred and
be continuing; and
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(3) the Company or the Guarantor, as the case may be, has delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer or lease and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and that
all conditions precedent herein provided for relating to such transaction
have been met.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation or merger by the Company or the Guarantor with or
into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company or the Guarantor substantially as an
entirety to any Person in accordance with Section 801, the successor corporation
formed by such consolidation or into which the Company or the Guarantor is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
or the Guarantor, as the case may be, under this Indenture with the same effect
as if such successor corporation had been named as the Company or the Guarantor,
as the case may be, herein, and thereafter, except in the case of a lease to
another Person, the predecessor corporation shall be relieved of all obligations
and covenants under this Indenture and the Debentures.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, each of the Company and the Guarantor,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
or the Guarantor and the assumption by any such successor of the covenants
of the Company or the Guarantor herein and in the Debentures; or
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(2) to add to the covenants of the Company or the guarantor for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or the Guarantor; or
(3) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Section 1310; or
(4) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provision with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action shall not adversely affect the interests of
the Holders.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% in aggregate
principal amount of the Outstanding Debentures, by Act of said Holders
delivered to the Company, the Guarantor and the Trustee, the Company and the
Guarantor, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders under
this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Debenture affected
thereby,
(1) change the Stated Maturity of the principal of (and premium, if
any), or any installment of interest on, any Debenture, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof or change the place of payment where,
or the coin or currency in which, the principal of any Debenture or any
premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or adversely affect the right to convert any Debenture as
provided in Article Thirteen or modify the provisions of this Indenture
with respect to the subordination of the Debentures in a manner adverse to
the Holders, or
(2) change in any manner adverse to the interests of the Holders, the
terms and conditions of the obligations of the Company and the
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Guarantor in respect of the due and punctual payment of the principal of
(and premium, if any), or any installment of interest on, the Debenture
provided for in this Indenture.
(3) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or
(4) modify any of the provisions of this Section or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Debenture affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
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SECTION 906. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Debentures.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and premium, if
any) and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company and the Guarantor will maintain in the Borough of Manhattan,
The City of New York, an office or agency where Debentures may be presented or
surrendered for payment, where Debentures may be surrendered for registration
of transfer or exchange, where Debentures may be surrendered for conversion and
where notices and demands to or upon the Company or the Guarantor in respect of
the Debentures 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 or the Guarantor shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee,
and the Company and the Guarantor hereby appoint the Trustee as its agent to
receive all such presentations, surrenders, notices and demands.
The Company and the Guarantor may also from time to time designate one or
more other offices or agencies (in or outside of the above location) where the
Debentures may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the
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Company or the Guarantor of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York for such purposes. The Company
or the Guarantor, as the case may be, will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
SECTION 1003. Money for Debenture Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of (and premium, if any) or interest
on any of the Debentures, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the principal of (and premium, if any) or interest on any
Debentures, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium or interest,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of its 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 (and
premium, if any) or interest on Debentures in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures, including, without limitation, the
Guarantor) in the making of any payment of principal (and premium, if any)
or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Debenture and remaining unclaimed for three years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Debenture shall
thereafter, as an unsecured general creditor, look only to the Company and the
Guarantor for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, each of the Company and the Guarantor will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Company or the Guarantor, as the case may be, shall
not be required to preserve any such right or franchise if its Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company or the Guarantor, as the case may
be, and that the loss thereof is not disadvantageous in any material respect to
the Holders.
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SECTION 1005. Statement by Officers as to Default.
The Company and the Guarantor will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date hereof,
an Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company or the Guarantor is in default in the performance
and observance of any of the terms, provisions and conditions of Sections 1001
to 1004, inclusive, and if the Company or the Guarantor shall be in default,
specifying all such defaults and the nature and status thereof of which they
may have knowledge.
ARTICLE ELEVEN
REDEMPTION OF DEBENTURES
SECTION 1101. Right of Redemption.
The Debentures may be redeemed otherwise than through operation of the
sinking fund provided for in Article Twelve at the election of the Company, as a
whole or from time to time in part, at any time, at the Redemption Prices
specified in the form of Debenture hereinbefore set forth for redemptions
otherwise than through operation of the sinking fund, together with accrued
interest to the Redemption Date. Notwithstanding the foregoing, the Company may
not, prior to March 1, 1989, redeem any Debentures unless the Closing Price of
the Common Stock on twenty of the thirty consecutive days on which there was
such a price immediately preceding the fifth day prior to the initial
publication of the notice of such redemption is at least 150% of the conversion
price in effect at the close of business on such day.
SECTION 1102. Applicability of Article.
Redemption of Debentures at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Debentures pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Debentures, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Debentures to be redeemed.
SECTION 1104. Selection by Trustee of Debentures to Be Redeemed.
If less than all the Debentures are to be redeemed, the particular
Debentures to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Debentures not
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previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of Debentures of a denomination larger than $1,000.
If any Debenture selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Debenture so selected, the converted portion of such Debenture shall be deemed
(so far as may be) to be the portion selected for redemption. Debentures which
have been converted during a selection of Debentures to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Debenture Registrar
in writing of the Debentures selected for redemption and, in the case of any
Debentures selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debentures shall relate, in the
case of any Debentures redeemed or to be redeemed only in part, to the portion
of the principal amount of such Debenture which has been or is to be redeemed.
Section 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Debentures to be redeemed, at his address appearing in the
Debenture Register.
All notices of redemption shall state:
(1) the Redemption Date.
(2) the Redemption Price.
(3) if less than all the Outstanding Debentures are to be redeemed,
the identification (and, in the case of partial redemption, the principal
amounts) of the particular Debentures to be redeemed.
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture to be redeemed and that interest
thereon will cease to accrue on and after said date,
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(5) the conversion price, the date on which the right to
convert the principal of the Debentures to be redeemed will terminate
and the place or places where such Debentures may be surrendered for
conversion,
(6) the place or places where such Debentures are to be
surrendered for payment of the Redemption Price, and
(7) that the redemption is for the sinking fund, if such is the
case.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Debentures
which are to be redeemed on that date other than any Debentures called for
redemption on that date which have been converted prior to the date of such
deposit.
If any Debenture called for redemption is converted, any money
deposited with the trustee or with any Paying Agent or so segregated and held
in trust for the redemption of such Debenture shall (subject to any right of
the Holder of such Debenture or any Predecessor Debenture to receive interest
as provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 1107. Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company and the Guarantor shall default in the payment of the Redemption Price
and accrued interest) such Debentures shall cease to bear interest. Upon
surrender of any such Debenture for redemption in accordance with said notice,
such Debenture shall be paid by the Company at the Redemption Price, together
with accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Debentures, or
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one or more Predecessor Debentures, registered as such at the close of business
on the relevant Record Dates according to their terms and the provisions of
Section 307.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date as the rate borne by the
Debenture.
SECTION 1108. Debentures Redeemed in Part.
Any Debenture which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Debenture without service
charge, a new Debenture or Debentures, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Debenture so
surrendered.
ARTICLE TWELVE
SINKING FUND
SECTION 1201. Sinking Fund Payments.
As and for a sinking fund for the retirement of the Debentures, the
Company will, until all Debentures are paid or payment thereof provided for,
deposit in accordance with Section 1106, prior to March 1 in each year,
commencing in 1998 and ending in 2011, an amount in cash sufficient to redeem,
on such March 1, 5% of the maximum aggregate principal amount of Debentures
issued hereunder at the Redemption Price specified in the form of Debenture
hereinbefore set forth for redemption through operation of the sinking fund.
The cash amount of any sinking fund payment is subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption
of Debentures on such March 1 as herein provided.
SECTION 1202. Satisfaction of Sinking Fund Payments with Debentures.
The Company (1) may deliver Outstanding Debentures (other than any
previously called for redemption) and (2) may apply as a credit Debentures
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which have been redeemed at the election of the Company pursuant to Section
1101, in each case in satisfaction of all or any part of any sinking fund
payment required to be made pursuant to Section 1201, provided that such
Debentures have not been previously so credited. Each such Debenture shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in the form of Debenture hereinbefore set forth for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 1203. Redemption of Debentures for Sinking Fund.
On or before January 1 in each year commencing with the year 1998 and
ending in 2011, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment
pursuant to Section 1201, the portion thereof, if any, which is to be satisfied
by payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Debentures pursuant to Section 1202 and will also
deliver to the Trustee any Debentures to be so delivered. If the sinking fund
payment to be made in cash, plus any unused balance of any preceding sinking
fund payments made in cash, shall be $25,000 or less on any March 1, such
aggregate amount may, at the election of the Company, be carried over to and
paid with the next succeeding sinking fund payment. Before February 1 in each
such year the Trustee shall select the Debentures to be redeemed upon the next
ensuing March 1 in the manner specified in Section 1104 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1105. Such notice having been duly given, the
redemption of such Debentures shall be made upon the terms and in the manner
stated in Sections 1107 and 1108.
ARTICLE THIRTEEN
CONVERSION OF DEBENTURES
SECTION 1301. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Debenture or any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000 may be
converted at the principal amount thereof, or of such portion thereof, into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Stock of the Company, at the conversion
price, determined as hereinafter provided, in effect at the time of conversion.
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Such conversion right shall expire at the close of business on March 1, 2012.
In case a Debenture or portion thereof is called for redemption, such
conversion right in respect of the Debenture or portion so called shall expire
at the close of business on the business day prior to the Redemption Date,
unless the Company defaults in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be initially $40.00 per
share of Common Stock. The conversion price shall be adjusted in certain
instances as provided in paragraphs (1), (2), (3), (4), (7) and (8) of Section
1304.
SECTION 1302. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any Debenture
to be converted shall surrender such Debenture, duly endorsed or assigned to
the Company or in blank, at any office or agency of the Company maintained for
that purpose pursuant to Section 1002, accompanied by written notice to the
Company at such office or agency that the Holder elects to convert such
Debenture or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Debentures surrendered for
conversion during the period from the close of business on any Regular Record
Date to the opening of business on the following Interest Payment Date shall
(except in the case of Debentures or portions thereof which have been called
for redemption on a Redemption Date within such period or on such Interest
Payment Date) be accompanied by payment in New York Clearing House funds or
other funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Debentures
being surrendered for conversion. Any Debenture surrendered for conversion
during the period from the close of business on any Regular Record Date for the
payment of interest to the opening of business on the following Interest Payment
Date which has been called for redemption on a date within such period or on
such Interest Payment Date must be accompanied by payment in New York Clearing
House funds or other funds acceptable to the Company of an amount, if any, equal
to the difference between (i) the interest payable to the registered Holder of
such Debenture on such Interest Payment Date in respect of the principal amount
of the Debenture being surrendered for conversion and (ii) the accrued interest
on such principal amount to the date of conversion. Except as provided in the
two preceding sentences and subject to the fourth
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paragraph of Section 309, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Debentures surrendered for
conversion or on account of any dividends on the Common Stock issued upon
conversion.
Debentures shall be deemed to have been converted immediately prior to the
close of business on the date of surrender of such Debentures for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Debentures as Holders shall cease, and the person or persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1303.
In the case of any Debenture which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Debenture
or Debentures of authorized denominations in aggregate principal amount equal
to the unconverted portion of the principal amount of such Debenture.
SECTION 1303. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion of
Debentures. If more than one Debenture shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Debentures (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Debenture or Debentures (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the current market
price per share of Common Stock (determined as provided in paragraph (6) of
Section 1304) at the close of business on the day of conversion.
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SECTION 1304. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other distribution
on any class of capital stock of the Company in shares of Common Stock, the
conversion price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the date following the date fixed for such determination.
(2) In case the Company shall issue rights or warrants to all holders of
its shares of Common Stock entitling them to subscribe for or purchase Common
Stock at a price per share less than the current market price per share
(determined as provided in paragraph (6) of this Section) of the Common Stock
on the date fixed for the determination of stockholders entitled to receive
such rights or warrants, the conversion price in effect at the opening of
business on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the total
number of shares of Common Stock so offered for subscription or purchase would
purchase at such current market price and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination.
(3) In case the outstanding shares of Common Stock shall be subdivided
into a greater number of shares, the conversion price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares, the conversion price in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
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proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of shares of Common Stock evidences of indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid in cash out of
the retained earnings of the Company and any dividend or distribution referred
to in paragraph (1) of this Section), the conversion price shall be adjusted so
that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the close of business on the date fixed
for the determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (6) of this Section) of the Common Stock
on the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets or evidences of indebtedness so distributed allocable to one share
of Common Stock and the denominator shall be such current market price per
share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
(5) In case the Common Stock shall be changed into the same or a different
number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a subdivision or
combination of shares or a stock dividend described in paragraph (1) or
paragraph (3) of this Section, or a consolidation, merger or sale of assets
described in Section 1310), then and in each such event the Holders of
Debentures shall have the right thereafter to convert such Debentures into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders of the
number of shares of Common Stock into which such Debentures might have been
converted immediately prior to such reorganization, reclassification or change.
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(6) For the purpose of any computation under paragraphs (2) and (4) of
this Section, the current market price per share of Common Stock on any date
shall be deemed to be the average of the Closing Prices for the 15 consecutive
Business Days selected by the Company commencing not more than 30 and not less
than 20 Business Days before the date in question.
(7) No adjustment in the conversion price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this
paragraph (7)) would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this paragraph
(7) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this paragraph (7) shall
be made to the nearest cent.
(8) The Company may make such reductions in the conversion price, in
addition to those required by paragraphs (1), (2), (3) and (4) of this Section,
as it considers to be advisable in order to avoid or diminish any income tax to
any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax purposes
or for any other reasons. The Company shall have the power to resolve any
ambiguity or correct any error in this Section 1304 and its actions in so doing
shall be final and conclusive.
SECTION 1305. Notice of Adjustment of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price in
accordance with Section 1304 and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable
detail the facts upon which such adjustment is based and the computation
thereof, and such certificate shall forthwith be filed at each office or
agency maintained for the purpose of conversion of Debentures pursuant to
Section 1002; and
(b) a notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price shall as soon as practicable be
mailed by the Company to the Trustee and to all Holders at their last
addresses as they shall appear in the Debenture Register.
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SECTION 1306. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its shares of Common Stock payable otherwise than in cash out of its
earned surplus; or
(b) the Company shall authorize the granting to the holders of its
shares of Common Stock of rights or warrants entitling them to subscribe
for or purchase any shares of capital stock of any class or of any other
rights; or
(c) of any reclassification of the shares of Common Stock of the
Company (other than a subdivision or combination of its outstanding shares
of Common Stock), or of any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Debentures pursuant to Section 1002, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Debenture Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights or warrants, or, if a record
is not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution, rights or warrants are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Such notice shall also state whether such transaction will result in any
adjustment in the conversion price applicable to the Debentures and, if so,
shall state what the adjusted conversion price will be and when it will become
effective. Neither the failure to give the notice required by this Section, nor
any defect therein, to any particular Holder shall affect the sufficiency of the
notice or the legality or validity of any such dividend, distribution, right,
warrant, reclassification, consolidation, merger, sale,
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transfer, liquidation, dissolution or winding-up, or the vote on any action
authorizing such with respect to the other holders.
SECTION 1307. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized shares of Common Stock, for the
purpose of effecting the conversion of Debentures, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding Debentures
and shall take all action necessary so that shares of Common Stock so issued
will be validly issued, fully paid and nonassessable.
SECTION 1308. Taxes on Conversions.
The Company will pay any and all stamp or similar taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Debenture or Debentures to be converted, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.
SECTION 1309. Cancellation of Converted Debentures.
All Debentures delivered for conversion shall be delivered to the Trustee
to be cancelled by or at the direction of the Trustee, which shall dispose of
the same as provided in Section 311.
SECTION 1310. Provisions in Case of Consolidation, Merger or Sale of Assets.
(1) In case of any consolidation of the Company with, or merger of the
Company into, any other corporation, or in case of any merger of another
corporation into the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company, the corporation formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Debenture then outstanding shall
have the right thereafter, during the period such Debenture shall be
convertible as specified in Section 1301, to convert such Debenture only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the
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number of shares of Common Stock of the Company into which such Debenture might
have been converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall provide for adjustments which, for
events subsequent to the effective date of such supplemental indenture, shall
be as nearly equivalent as may be practicable to the adjustments provided for
in this Article. The above provisions of this Section shall similarly apply to
successive consolidations, mergers, sales or transfers.
(2) The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any such supplemental indenture
relating either to the kind or amount of shares of stock or securities or
property receivable by Holders upon the conversion of their Debentures after
any such reclassification, change, consolidation, merger, sale or conveyance or
to any adjustment to be made with respect thereto.
SECTION 1311. Disclaimer by Trustee of Responsibility for Certain
Matters.
The Trustee shall not at any time be under any duty or responsibility to
any Holder of Debentures to determine whether any facts exist which may require
any adjustment of the conversion price, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed in making the
same. The Trustee shall not be accountable with respect to the validity, value,
kind or amount of any shares of Common Stock, or any securities or property,
which may at any time be issued or delivered upon the conversion of any
Debenture; and it makes no representation with respect thereto. The Trustee
shall not be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debenture for the purpose of conversion or,
subject to Section 601, to comply with any of the covenants of the Company
contained in this Article.
ARTICLE FOURTEEN
SUBORDINATION
SECTION 1401. Agreement of Subordination.
The Company and the Guarantor covenant and agree, and each Holder of
Debentures issued hereunder by his acceptance thereof likewise covenants and
agrees, that all Debentures shall be issued subject to the provisions of this
Article; and each Person holding any Debenture, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
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All Debentures issued hereunder and the Guarantees endorsed thereon shall,
to the extent and in the manner hereinafter set forth, be subordinated and
subject in right of payment to the prior payment in full of all amounts then
due on all Senior Indebtedness.
SECTION 1402. Payments to Holders of Debentures.
No payment shall be made by the Company or the Guarantor on account of
principal of (or premiums, if any) or interest on the Debentures or on account
of the purchase or other acquisition of Debentures, if there shall have
occurred and be continuing a default with respect to any Senior Indebtedness of
the Company or any Senior Indebtedness of the Guarantor, respectively,
permitting the acceleration thereof and such default is the subject of a
judicial proceeding or the Company or the Guarantor, as the case may be,
receives notice of such a default from the holders of such Senior Indebtedness
(provided, however, that in the case of Senior Indebtedness and issued pursuant
to an indenture such notice may be validly given only by the trustee under such
indenture), unless and until such default or event of default shall have been
cured or waived or shall have ceased to exist.
Upon any acceleration of the principal of the Debentures or any payment by
the Company or the Guarantor, or distribution of assets of the Company or the
Guarantor of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization
of the Company or the Guarantor, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or
to become due upon all Senior Indebtedness of the Company or the Guarantor, as
the case may be, shall first be paid in full in money or money's worth, or
payment thereof provided for, before any payment is made on account of the
principal of (and premium, if any) or interest on the Debentures; and upon any
such dissolution or winding up or liquidation or reorganization, any payment by
the Company or the Guarantor, as the case may be, or distribution of assets of
the Company or the Guarantor, as the case may be, of any kind or character,
whether in cash, property or securities, to which the Holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article, shall be paid by the Company or the Guarantor, as the case may be, or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution directly to the holders of such
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, as their
respective interests may appear,
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to the extent necessary to pay all such Senior Indebtedness in full in money or
money's worth, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders of the Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment by or
distribution of assets of the Company or the Guarantor, as the case may be, of
any kind or character, whether in cash, property or securities, prohibited by
the foregoing, shall be received by the Trustee or the Holders of the
Debentures before all such Senior Indebtedness is paid in full in money or
money's worth, or provision is made for such payment, and if such fact shall
then have been made known to the Trustee or, as the case may be, such Holder,
then and in such event such payment or distribution shall be paid over or
delivered to the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of all such Senior Indebtedness remaining unpaid to the extent necessary to pay
all such Senior Indebtedness in full in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders of such
Senior Indebtedness (but subject to the power of a court of competent
jurisdiction to make other equitable provision, which shall have been determined
by such court to give effect to the rights conferred in this Article upon the
Senior Indebtedness and the holders thereof with respect to Debentures or the
Holders thereof or the Trustee, by a lawful plan of reorganization or
readjustment under applicable bankruptcy law).
The consolidation of the Company or the Guarantor with, or the merger of
the Company or the Guarantor into, another corporation or the liquidation or
dissolution of the Company or the Guarantor following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided in Article Eight
shall not be deemed a dissolution, winding up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article Eight. Nothing in this Section shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
The holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the Debentures, without
incurring responsibility to the Holders of the Debentures and without impairing
or releasing the obligations of the Holders of the Debentures
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hereunder to the holders of Senior Indebtedness: (i) change the manner, place
or terms of payment or change or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 1403. Subrogation of Debentures.
Subject to the payment in full of all amounts then due (whether by
acceleration of the maturity thereof or otherwise) on account of the principal
of, premium, if any, and interest on all Senior Indebtedness at the time
outstanding, the Holders of the Debentures shall be subrogated to the rights of
the holders of Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company or the Guarantor, as the case may
be, applicable to the Senior Indebtedness until the principal of (and premium,
if any) and interest in the Debentures shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders of
the Debentures or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article
to the holders of Senior Indebtedness by Holders of the Debentures or the
Trustee, shall, as between the Company or the Guarantor, as the case may be,
their respective creditors other than holders of Senior Indebtedness, and the
Holders of the Debentures, be deemed to be a payment by the Company or the
Guarantor, as the case may be, to or on account of the Senior Indebtedness. It
is understood that the provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders of the
Debentures, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Debentures is intended to or shall impair, as among the Company or the
Guarantor, as the case may be, their respective creditors other than the
holders of Senior Indebtedness, and the Holders of the Debentures, the
obligation of the Company or the Guarantor, as the case may be, which is
absolute and unconditional, to pay to the Holders of the Debentures the
principal of (and premium, if any) and interest on the Debentures as and when
the same shall become due and payable in accordance with their terms,
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or is intended to or shall affect the relative rights of the Holders of the
Debentures and creditors of the Company or the Guarantor, as the case may be,
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness in respect of cash, property or securities of the Company or
the Guarantor, as the case may be, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company or the Guarantor
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Debentures 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
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Debentures, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company or the Guarantor, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 1404. Authorization by Holders of Debentures.
Each Holder of a Debenture by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate, as between the Holder of the Debenture and the holders of Senior
Indebtedness, the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 1405. Notices to Trustee and Senior Indebtedness Holders.
The Company and Guarantor shall give prompt written notice to the Trustee
of any fact known to the Company or the Guarantor, as the case may be, which
would prohibit the making of any payment or moneys to or by the Trustee in
respect of the Debentures pursuant to the provision of this Article.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of moneys to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article,
unless and until the Trustee shall have received at its Corporate Trust Office
written notice thereof from the Company or the Guarantor or a holder
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or holders of Senior Indebtedness or from any trustee therefor; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Section 601, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received at least
three Business Days prior to the date upon which by the terms hereof any such
moneys may become payable for any purpose (including, without limitation, the
payment of the principal of (premium, if any) or interest on any Debenture) with
respect to such moneys the notice provided for in this Section, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such moneys and to apply the same to the purpose
for which they were received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior to such
date.
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. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
The Company and the Guarantor agree that if any default shall occur with
respect to any Senior Indebtedness, which default permits the holders of such
Senior Indebtedness to accelerate the maturity thereof, the Company will give
prompt notice in writing of such happening to all known holders of Senior
Indebtedness and shall certify to each such holder the name of the Trustee.
SECTION 1406. Trustee's Relation to Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 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 Section 613 or elsewhere in this Indenture shall deprive the Trustee
of any of its rights as such holder.
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With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not 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.
SECTION 1407. No Impairment of Subordination.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or the Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company or the Guarantor with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
MAXTOR CORPORATION
(a Delaware corporation)
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
[CORPORATE SEAL]
MAXTOR CORPORATION
(a California corporation)
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
[CORPORATE SEAL]
SECURITY PACIFIC NATIONAL BANK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Attest:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------
[CORPORATE SEAL]
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On the 5th day of March, 1987, before me personally came ▇▇▇▇▇▇ ▇. ▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he resides at
San Jose, California; that he is the Senior Vice President of MAXTOR
CORPORATION (a Delaware Corporation), one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
[NOTARIAL SEAL] S/S ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of New York
No. ▇▇-▇▇▇▇▇▇▇
Qualified in Westchester County
Certificate Filed in New York County
Commission Expires March 30, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On the 5th day of March, 1987, before me personally came ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he resides at
Palo Alto, California; that he is Assistant Secretary of MAXTOR CORPORATION (a
California corporation), one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
[NOTARIAL SEAL] S/S ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of New York
No. ▇▇-▇▇▇▇▇▇▇
Qualified in Westchester County
Certificate Filed in New York County
Commission Expires March 30, 1987
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On the 5th day of March, 1987, before me personally came ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he resides at
Embarcadero #▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇; that he is Vice President of
SECURITY PACIFIC NATIONAL BANK, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
[NOTARIAL SEAL] S/S ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of New York
No. ▇▇-▇▇▇▇▇▇▇
Qualified in Westchester County
Certificate Filed in New York County
Commission Expires March 30, 1987