EXHIBIT 10-34
[CONFORMED COPY]
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SAFEGUARD SCIENTIFICS, INC.
AND
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION, Trustee
Indenture
Dated as of February 1, 1996
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$100,000,000
6% Convertible Subordinated Notes due 2006
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TABLE OF CONTENTS
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . --
RECITALS
Authorization of Indenture. . . . . . . . . . . . . . . . . . . 1
Form of Face of Security. . . . . . . . . . . . . . . . . . . . 1
Form of Trustee's Certificate of Authentication . . . . . . . . 5
Form of Reverse of Security . . . . . . . . . . . . . . . . . . 6
Form of Conversion Notice . . . . . . . . . . . . . . . . . . . 11
Form of Schedule for Endorsement on
Global Security to Reflect Changes
in Principal Amount . . . . . . . . . . . . . . . . . . . . . 12
Compliance with Legal Requirements. . . . . . . . . . . . . . . 13
Purpose of and Consideration for Indenture. . . . . . . . . . . 13
ARTICLE ONE
DEFINITIONS.
SECTION 1.1. Certain Terms Defined . . . . . . . . . . . . . . . . . . . 13
Accredited Investor . . . . . . . . . . . . . . . . . . . . 13
Acquisition Indebtedness. . . . . . . . . . . . . . . . . . 13
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 14
Board of Directors. . . . . . . . . . . . . . . . . . . . . 14
Business Day. . . . . . . . . . . . . . . . . . . . . . . . 14
Certificate of Transfer . . . . . . . . . . . . . . . . . . 14
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 14
Conversion Price. . . . . . . . . . . . . . . . . . . . . . 14
Corporate Trust Office. . . . . . . . . . . . . . . . . . . 14
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . 14
Event of Default. . . . . . . . . . . . . . . . . . . . . . 15
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . 15
Global Security . . . . . . . . . . . . . . . . . . . . . . 15
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 15
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 15
Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Holder, holder of Securities,
Securityholder. . . . . . . . . . . . . . . . . . . . . . 15
Majority Subsidiary . . . . . . . . . . . . . . . . . . . . 15
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Non-Recourse Indebtedness . . . . . . . . . . . . . . . . . 16
Officers' Certificate . . . . . . . . . . . . . . . . . . . 16
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . 16
Original issue date . . . . . . . . . . . . . . . . . . . . 16
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . 16
Principal . . . . . . . . . . . . . . . . . . . . . . . . . 17
Qualified Institutional Buyer . . . . . . . . . . . . . . . 17
Register. . . . . . . . . . . . . . . . . . . . . . . . . . 17
Regulation S. . . . . . . . . . . . . . . . . . . . . . . . 17
Regulation S Purchaser. . . . . . . . . . . . . . . . . . . 17
Responsible Officer . . . . . . . . . . . . . . . . . . . . 17
Restricted Security . . . . . . . . . . . . . . . . . . . . 17
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . 18
Securities Act. . . . . . . . . . . . . . . . . . . . . . . 18
Security or Securities. . . . . . . . . . . . . . . . . . . 18
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 18
Stock Transfer Agent. . . . . . . . . . . . . . . . . . . . 18
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . 18
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . . 19
ARTICLE TWO
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES.
SECTION 2.1. Authentication and Delivery of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.2. Execution of Securities . . . . . . . . . . . . . . . . . . 19
SECTION 2.3. Certificate of Authentication . . . . . . . . . . . . . . . 20
SECTION 2.4. Form, Denomination and Date of
Securities; Payments of Interest. . . . . . . . . . . . . 20
SECTION 2.5. Exchange and Registration of Transfer of
Securities; Restrictions on Transfers;
Depositary. . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.6. Mutilated, Defaced, Destroyed, Lost
and Stolen Securities . . . . . . . . . . . . . . . . . . 30
SECTION 2.7. Cancellation of Securities;
Destruction Thereof . . . . . . . . . . . . . . . . . . . 31
SECTION 2.8. Temporary Securities. . . . . . . . . . . . . . . . . . . . 32
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE.
SECTION 3.1. Payment of Principal and Interest . . . . . . . . . . . . . 32
SECTION 3.2. Offices for Payments, etc.. . . . . . . . . . . . . . . . . 33
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SECTION 3.3. Appointment to Fill a Vacancy in
Office of Trustee . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.4. Paying Agents . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.5. Certificate to Trustee. . . . . . . . . . . . . . . . . . . 34
SECTION 3.6. Securityholders' Lists. . . . . . . . . . . . . . . . . . . 35
SECTION 3.7 Reports by the Issuer . . . . . . . . . . . . . . . . . . . 35
SECTION 3.8 Reports by the Trustee. . . . . . . . . . . . . . . . . . . 35
SECTION 3.9 Information to be Provided to Holders of
Securities. . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT.
SECTION 4.1. Event of Default Defined; Acceleration
of Maturity; Waiver of Default. . . . . . . . . . . . . . 35
SECTION 4.2. Collection of Indebtedness by Trustee;
Trustee May Prove Debt. . . . . . . . . . . . . . . . . . 38
SECTION 4.3. Application of Proceeds . . . . . . . . . . . . . . . . . . 41
SECTION 4.4. Suits for Enforcement . . . . . . . . . . . . . . . . . . . 42
SECTION 4.5. Restoration of Rights on Abandonment
of Proceedings. . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.6. Limitations on Suits by
Securityholders . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.7. Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.8. Control by Securityholders. . . . . . . . . . . . . . . . . 43
SECTION 4.9. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . 44
ARTICLE FIVE
CONCERNING THE TRUSTEE.
SECTION 5.1. Duties and Responsibilities of the
Trustee; During Default; Prior to
Default. . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.2. Certain Rights of the Trustee . . . . . . . . . . . . . . . 46
SECTION 5.3. Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof . . . . . . . . . . . . . 48
SECTION 5.4. Trustee and Agents May Hold
Securities; Collections, etc. . . . . . . . . . . . . . . 48
SECTION 5.5. Moneys Held by Trustee. . . . . . . . . . . . . . . . . . . 48
SECTION 5.6. Compensation and Indemnification
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of Trustee and Its Prior Claim. . . . . . . . . . . . . . 48
SECTION 5.7. Right of Trustee to Rely on
Officers' Certificate, etc. . . . . . . . . . . . . . . . 49
SECTION 5.8. Persons Eligible for Appointment
as Trustee. . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.9. Resignation and Removal; Appointment
of Successor Trustee. . . . . . . . . . . . . . . . . . . 49
SECTION 5.10. Acceptance of Appointment by
Successor Trustee . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . . . . . 52
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS.
SECTION 6.1. Evidence of Action Taken by
Securityholders . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.2. Proof of Execution of Instruments and
of Holding of Securities; Record Date. . . . . . . . . . . 53
SECTION 6.3. Holders to Be Treated as Owners . . . . . . . . . . . . . . 53
SECTION 6.4. Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.5. Right of Revocation of Action Taken . . . . . . . . . . . . 54
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES.
SECTION 7.1. Supplemental Indentures Without
Consent of Securityholders. . . . . . . . . . . . . . . . 55
SECTION 7.2. Supplemental Indentures With Consent
of Securityholders. . . . . . . . . . . . . . . . . . . . 56
SECTION 7.3. Effect of Supplemental Indenture. . . . . . . . . . . . . . 57
SECTION 7.4. Documents to Be Given to Trustee. . . . . . . . . . . . . . 57
SECTION 7.5. Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . . . . . 58
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 8.1. Covenant Not to Merge, Consolidate,
Sell or Convey Property Except
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Under Certain Conditions . . . . . . . . . . . . . . . . 58
SECTION 8.2. Successor Corporation Substituted . . . . . . . . . . . . . 58
SECTION 8.3. Opinion of Counsel to Trustee . . . . . . . . . . . . . . . 59
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 9.1. Satisfaction and Discharge of
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.2. Application by Trustee of Funds
Deposited for Payment of Securities.. . . . . . . . . . . 60
SECTION 9.3. Repayment of Moneys Held by Paying
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.4. Return of Moneys Held By Trustee and
Paying Agent Unclaimed for Three
Years . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE TEN
MISCELLANEOUS PROVISIONS.
SECTION 10.1. Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability. . . . . . . . . . . . . . . . . . . 61
SECTION 10.2. Provisions of Indenture for the Sole
Benefit of Parties and Security-
holders . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.3. Successors and Assigns of Issuer
Bound by Indenture. . . . . . . . . . . . . . . . . . . . 62
SECTION 10.4. Notices and Demands on Issuer,
Trustee and Securityholders . . . . . . . . . . . . . . . 62
SECTION 10.5. Officers' Certificates and Opinions
of Counsel; Statements to Be Con-
tained Therein. . . . . . . . . . . . . . . . . . . . . . 63
SECTION 10.6. Payments Due on Saturdays, Sundays
and Holidays. . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.7. Conflict of Any Provision of
Indenture with Trust Indenture
Act of 1939 . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.8. New York Law to Govern. . . . . . . . . . . . . . . . . . . 64
SECTION 10.9. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 10.10. Effect of Headings. . . . . . . . . . . . . . . . . . . . . 64
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES.
SECTION 11.1. Right of Optional Redemption; Prices. . . . . . . . . . . . 65
SECTION 11.2. Notice of Redemption; Partial
Redemptions . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.3. Payment of Securities Called for
Redemption. . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.4. Exclusion of Certain Securities from
Eligibility for Selection for
Redemption. . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE TWELVE
SUBORDINATION OF SECURITIES.
SECTION 12.1. Agreement to Subordinate. . . . . . . . . . . . . . . . . . 68
SECTION 12.2. Payments to Securityholders . . . . . . . . . . . . . . . . 69
SECTION 12.3. Subrogation of Securities . . . . . . . . . . . . . . . . . 70
SECTION 12.4. Authorization by Securityholders. . . . . . . . . . . . . . 72
SECTION 12.5. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . 72
SECTION 12.6. Trustee's Relation to Senior. . . . . . . . . . . . . . . . 73
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 12.7. No Impairment of Subordination. . . . . . . . . . . . . . . 74
ARTICLE THIRTEEN
CONVERSION OF SECURITIES.
SECTION 13.1. Conversion Privilege. . . . . . . . . . . . . . . . . . . . 74
SECTION 13.2. Exercise of Conversion Privilege. . . . . . . . . . . . . . 74
SECTION 13.3. Fractional Interests. . . . . . . . . . . . . . . . . . . . 76
SECTION 13.4. Conversion Price. . . . . . . . . . . . . . . . . . . . . . 76
SECTION 13.5. Adjustment of Conversion Price. . . . . . . . . . . . . . . 76
SECTION 13.6. Adjustment of Conversion Price -
Fundamental Change . . . . . . . . . . . . . . . . . . . 85
SECTION 13.7. Notice of Certain Events. . . . . . . . . . . . . . . . . . 90
SECTION 13.8. Taxes on Conversion . . . . . . . . . . . . . . . . . . . . 91
SECTION 13.9. Issuer to Provide Stock . . . . . . . . . . . . . . . . . . 91
SECTION 13.10. Disclaimer of Responsibility for
Certain Matters . . . . . . . . . . . . . . . . . . . . . 92
SECTION 13.11. Return of Funds Deposited for
Redemption of Converted Securities. . . . . . . . . . . . 92
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
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SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
EXHIBIT A Form of Letter to be Delivered by
Institutional Accredited
Investors . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Certificate of Transfer for
Securities. . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Certificate of Transfer for
Restricted Common Stock . . . . . . . . . . . . . . . . C-1
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THIS INDENTURE, dated as of February 1, 1996 between SAFEGUARD
SCIENTIFICS, INC., a corporation incorporated under the laws of the Commonwealth
of Pennsylvania (the "Issuer"), and FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, a national banking association organized and existing under the
laws of the United States (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue of its 6%
Convertible Subordinated Notes due 2006 (the "Securities") and, to provide,
among other things, for the authentication, delivery and administration thereof,
the Issuer has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Securities and the Trustee's certificate of
authentication shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
CUSIP Number [U75040AA0 - for Securities initially purchased
in compliance with Regulation S]
[786449AC2 - for all other Securities]
No. $
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT)("INSTITUTIONAL ACCREDITED INVESTOR") OR (C)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER
THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE
TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH NOTE EXCEPT (A) TO SAFEGUARD SCIENTIFICS, INC. OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO FIRST TRUST OF
NEW YORK, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY OR AT SUCH EARLIER TIME AS THE NOTE CEASES TO BE SUBJECT TO THE
REQUIREMENTS OF PARAGRAPHS (C), (E), (F) AND (H) OF RULE 144 UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
[Where the Note is a Global Security add: "Unless and until it is
exchanged in whole or in part for Notes in definitive registered form, this Note
may not be transferred except as a whole by the Depositary to the nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."]
[In addition, a Global Security issued to Cede & Co. will bear the
following legend: Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an
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authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
SAFEGUARD SCIENTIFICS, INC.
6% Convertible Subordinated Notes due 2006
SAFEGUARD SCIENTIFICS, INC., a corporation incorporated under the laws
of the Commonwealth of Pennsylvania (the "Issuer"), for value received hereby
promises to pay to or registered assigns the principal sum
of Dollars on February 1, 2006, and to pay interest, semi-annually
on February 1 and August 1 of each year, on said principal sum at the rate per
annum set forth above from the February 1 or the August 1, as the case may be,
next preceding the date of this Security to which interest on the Securities has
been paid or duly provided for, unless the date hereof is a date to which
interest on the Securities has been paid or duly provided for, in which case
from the date of this Security, or unless no interest has been paid or duly
provided for on the Securities, in which case from February 6, 1996 until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after January 15 or July
15, as the case may be, and before the following February 1 or August 1, this
Security shall bear interest from such February 1 or August 1; provided, that if
the Issuer shall default in the payment of interest due on such February 1 or
August 1, then this Security shall bear interest from the next preceding
February 1 or August 1 to which interest on the Securities has been paid or duly
provided for, or, if no interest has been paid or duly provided for on the
Securities since the original issue date of this Security, from February 6,
1996. The interest so payable on any February 1 or August 1 will, except as
otherwise provided in the Indenture referred to on the reverse hereof, be paid
to the person in whose name this Security is registered at the close of business
on the January 15 or July 15 preceding such February 1 or August 1, whether or
not such day is a Business Day.
Payment of the principal of and interest on this Security will be made
in immediately available funds and 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. Payment in respect of the principal of this Security will be
made only against surrender of this Security. Each such payment of the
principal of and
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interest on this Security will be made at the Issuer's office or agency for such
purpose in the Borough of Manhattan, The City of New York, which office or
agency will initially be the Corporate Trust Office of the Trustee; PROVIDED,
HOWEVER, that upon application by the Holder to the Trustee not later than the
10th day immediately preceding the relevant January 15 or July 15, such Holder
may receive payment of interest by wire transfer to a U.S. Dollar account (such
transfers to be made only to Holders of an aggregate principal amount in excess
of U.S. $5,000,000) maintained by the payee with a bank in The City of New York;
and PROVIDED, FURTHER, that, subject to the preceding proviso, payment of
interest may, at the option of the Issuer, be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Register. Unless such designation is revoked, any such designation made by the
Holder with respect to this Security will remain in effect with respect to
future payments with respect to this Security payable to the Holder. The Issuer
will pay any administrative costs imposed by banks in connection with making any
such payments upon application of such Holder for reimbursement. If this
Security is a Global Security, then, notwithstanding the third sentence of this
paragraph, each such payment will be made in accordance with the procedures of
the U.S. Depositary as then in effect.
Reference is made to the further provisions set forth on the reverse
hereof including without limitation provisions subordinating the payment of
principal of, premium, if any, and interest on the Securities to the payment in
full of all Senior Indebtedness as defined in said Indenture and provisions
giving the Holder hereof the right to convert this Security into Common Stock of
the Issuer on the terms and subject to the conditions and limitations referred
to on the reverse hereof, as more fully specified in said Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated: February 6, 1996
SAFEGUARD SCIENTIFICS, INC.
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned Indenture.
FIRST TRUST OF NEW YORK,
as Trustee
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Authorized Officer
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[FORM OF REVERSE OF SECURITY]
SAFEGUARD SCIENTIFICS, INC.
6% Convertible Subordinated Notes due 2006
This Security is one of a duly authorized issue of debt securities of
the Issuer, limited to the aggregate principal amount of $115,000,000 (except as
otherwise provided in the Indenture mentioned below), issued or to be issued
pursuant to an indenture dated as of February 1, 1996 (the "Indenture"), duly
executed and delivered by the Issuer to FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, Trustee (herein called the "Trustee"). Reference is hereby made to
the Indenture and all indentures supplemental thereto for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Issuer and the holders (the words "holders" or "holder" meaning
the registered holders or registered holder) of the Securities.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities may be declared
due and payable, in the manner and with the effect, and subject to the
conditions, provided in the Indenture. The Indenture provides that in certain
events such declaration and its consequences may be waived by the holders of a
majority in aggregate principal amount of the Securities then outstanding and
that, prior to any such declaration, such holders may waive any past default
under the Indenture and its consequences except a default in the payment of
principal of or premium, if any, or interest on any of the Securities or in
respect of the conversion of any of the Securities. Any such consent or waiver
by the holder of this Security (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future holders and
owners of this Security and any Security which may be issued in exchange or
substitution herefor, whether or not any notation thereof is made upon this
Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent of
the holders of not less than a majority in aggregate principal amount of the
Securities at the time outstanding, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions
6
of the Indenture or of any supplemental indenture or modifying in any manner the
rights of the holders of the Securities; PROVIDED that no such supplemental
indenture shall (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on the redemption hereof, or
alter the conversion provisions with respect to any Security in a manner
materially adverse to the Holder thereof or modify the subordination provisions
of the Indenture in a manner materially adverse to the Holders or impair or
affect the right of any Holder to institute suit for the payment or conversion
thereof or change the currency for payment of principal of, premium or interest
on, any Security or materially and adversely affect the right to convert the
Securities into Common Stock of SAFEGUARD SCIENTIFICS, INC. without the consent
of the holder of each Security so affected; or (b) reduce the aforesaid
percentage of Securities, the consent of the holders of which is required for
any such supplemental indenture or waiver, without the consent of the holders of
all Securities then outstanding.
The indebtedness evidenced by the Securities is, to the extent and in
the manner provided in the Indenture, expressly subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness of the Issuer
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Security is issued subject to the provisions of
the Indenture with respect to such subordination. Each holder of this Security,
by accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee in his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
Subject to the provisions of the Indenture, the holder of this
Security has the right, at his option, at any time until and including, but not
after the close of business on the Trading Day preceding, February 1, 2006
(except that, in case this Security or a portion hereof shall be called for
redemption and the Issuer shall not thereafter default in making due provision
for the payment of the redemption price, such right shall terminate with respect
to this Security or such portion hereof at the close of business on the Trading
Day preceding the date fixed for redemption), to convert the principal of this
Security, or any portion thereof which is $1,000 or a integral multiple of
$1,000, into fully paid and non-assessable shares of Common Stock of Issuer, as
said shares shall be constituted
7
at the date of conversion, at the Conversion Price of $57.97 per share in
principal amount of Securities for each share of such Common Stock, or at the
adjusted Conversion Price in effect at the date of conversion if an adjustment
has been made, determined as provided in the Indenture, upon surrender of this
Security to the Issuer at the office or agency of the Issuer maintained for the
purpose in the Borough of Manhattan, The City of New York, which office or
agency will initially be the Corporate Trust Office of the Trustee, together
with a fully executed notice substantially in the form set forth at the foot
hereof that the holder elects so to convert this Security (or any portion hereof
which is a integral multiple of $1,000) and, if this Security is surrendered for
conversion during the period between the close of business on January 15 or July
15 in any year and the opening of business on the following February 1 or August
1 and has not been called for redemption on a redemption date within such period
(or on such February 1 or August 1), accompanied by payment of an amount equal
to the interest payable on such February 1 or August 1 on the principal amount
of the Security being surrendered for conversion. Except as provided in the
preceding sentence or as otherwise expressly provided in the Indenture, no
payment or adjustment shall be made on account of interest accrued on this
Security (or portion thereof) so converted or on account of any dividend or
distribution on any such Common Stock issued upon conversion. If so required by
the Issuer or the Trustee, this Security, upon surrender for conversion as
aforesaid, shall be duly endorsed by, or be accompanied by instruments of
transfer, in form satisfactory to the Issuer, duly executed by, the holder or by
his duly authorized attorney. The Conversion Price from time to time in effect
is subject to adjustment as provided in the Indenture. No fractions of shares
will be issued on conversion, but an adjustment in cash will be made for any
fractional interest as provided in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple of $1,000. The
Securities may only be purchased and transferred in principal amounts of
$100,000 and $1,000 integral multiples in excess thereof.
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At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of Securities
of other authorized denominations.
Upon due presentment for registration of transfer of this Security at
the above-mentioned office or agency of the Issuer, a new Security or Securities
of authorized denominations, for a like aggregate principal amount, will be
issued to the transferee as provided in the Indenture. No service charge shall
be made for any such transfer, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
On or after February 2, 1999 and before February 2, 2001, the
Securities may be redeemed at the option of the Issuer as a whole, or in part,
at the following redemption prices (expressed in percentages of the principal
amount) together in each case with accrued interest to the date fixed for
redemption, provided that for 20 Trading Days within any period of 30
consecutive Trading Days (including the last Trading Day of such period) ending
on the Trading Day immediately prior to the notice of redemption the Closing
Price of the Common Stock on the New York Stock Exchange equals or exceeds 125%
of the then effective Conversion Price and further provided that all interest on
the Securities for all interest periods ending on or prior to the notice of
redemption to the Trustee has been paid in full or set aside for payment in
full. If redeemed during the twelve-month period beginning February 2:
Year Redemption Price
---- ----------------
1999 104.00%
2000 103.33
On or after February 2, 2001, the Securities may be redeemed at the
option of the Issuer as a whole, or in part, on any date up to one Trading Date
prior to maturity, at the following redemption prices (expressed in percentages
of the principal amount) together in each case with accrued interest to the date
fixed for redemption. If redeemed during the twelve-month period beginning
February 2:
9
Year Redemption Price
---- ----------------
2001 102.67%
2002 102.00
2003 101.33
2004 100.67
and at 100% if redeemed on or after February 2, 2005.
PROVIDED, in either case, that if the date fixed for redemption is a February 1
or August 1, then the interest payable on such date shall be paid to the holder
of record on the next preceding January 15 or July 15.
Subject to payment by the Issuer of a sum sufficient to pay the amount
due on redemption, interest on this Security (or portion hereof if this Security
is redeemed in part) shall cease to accrue upon the date duly fixed for
redemption of this Security (or portion hereof if this Security is redeemed in
part).
The Issuer, the Trustee, and any authorized agent of the Issuer or the
Trustee, may deem and treat the registered holder hereof as the absolute owner
of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Issuer or the Trustee or any authorized agent of the Issuer or
the Trustee), for the purpose of receiving payment of, or on account of, the
principal hereof and premium, if any and, subject to the provisions on the face
hereof, interest hereon and for all other purposes, and neither the Issuer nor
the Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of and
premium, if any, or the interest on this Security, for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
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[FORM OF CONVERSION NOTICE]
To: SAFEGUARD SCIENTIFICS, INC.
The undersigned owner of this Security hereby: (i) irrevocably
exercises the option to convert this Security, or the portion hereof below
designated, for shares of Common Stock ($.10 par value per share) of SAFEGUARD
SCIENTIFICS, INC. in accordance with the terms of the Indenture referred to in
this Security and (ii) directs that such shares of Common Stock deliverable upon
the conversion, together with any check in payment for fractional shares and any
Security(ies) 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 delivered registered in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the undersigned
on account of interest accompanies this Security.
Dated ,
---------------------------
Signature
Fill in for registration of shares if to be delivered, and of Securities if to
be issued, otherwise than to and in the name of the registered holder.
---------------------------
Social Security or Other
Taxpayer Identifying Number
- - ------------------------------
(Name)
- - ------------------------------
(Street Address)
- - ------------------------------
(City, State and Zip Code)
(Please print name and
address)
Principal Amount to be
11
Converted: (if less than all)
$
-------------------------------
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[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Security
Date Principal Amount of Remaining Principal Notation
- - ---- Securities by which Amount of this Made by
this Global Security Global Security -------
Is To Be Reduced or ---------------
Increased, and
Reason for Reduction
or Increase
-----------
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AND WHEREAS, all things necessary to make the Securities, when
executed by the Issuer and authenticated and delivered by the Trustee as in this
Indenture provided, the valid, binding and legal obligations of the Issuer, and
to constitute these presents a valid indenture and agreement according to its
terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective holders from time to
time of the Securities as follows:
ARTICLE ONE
DEFINITIONS.
SECTION 1.1 CERTAIN TERMS DEFINED. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture which are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act are referred to in the Trust
Indenture Act of 1939 (except as herein otherwise expressly provided or unless
the context otherwise clearly requires), shall have the meanings assigned to
such terms in said Trust Indenture Act and in said Securities Act as in force at
the date of this Indenture. All accounting terms used herein and not expressly
defined shall have the meanings given to them in accordance with generally
accepted accounting principles, and the term "GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES" shall mean such accounting principles which are generally accepted
at the date or time of any computation or at the date hereof. 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. The terms defined in this Article include the plural as well as
the singular.
"ACCREDITED INVESTOR" means an "accredited investor" as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"ACQUISITION INDEBTEDNESS" means the principal of,
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premium, if any, and interest on and all other amounts owing with respect to any
indebtedness for money borrowed or obligations incurred, assumed or guaranteed
by such person in connection with the acquisition by it or any of its Majority
Subsidiaries of any other businesses, properties or other assets.
"AFFILIATE" has the meaning assigned thereto in Rule 144 under the
Securities Act and any successor rule thereto.
"BOARD OF DIRECTORS" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act hereunder.
"BUSINESS DAY" means a day which in the city (or in any of the cities,
if more than one) where amounts are payable in respect of the Securities, as
specified on the face of the form of Security recited above, is neither a legal
holiday nor a day on which banking institutions are authorized by law or
regulation to close.
"CERTIFICATE OF TRANSFER" means a certificate to be completed by the
transferor and, in certain instances, the transferee of a Restricted Security,
the form of which is attached hereto as Exhibit B.
"COMMON STOCK" means the Common Stock ($.10 per share par value) of
Issuer as the same exists at the date of execution and delivery of this
Indenture or as such stock may be reconstituted from time to time.
"CONVERSION PRICE" has the meaning given to that term in Section 13.4
hereof.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 100 Wall Street, Suite 1600, New York, New York
10005.
"DEPOSITARY" means, The Depository Trust Company until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who is
then a Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities shall mean the
Depositary with respect to the Global Securities.
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"EVENT OF DEFAULT" means any event or condition specified as such in
Section 4.1 which shall have continued for the period of time, if any, therein
designated.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GLOBAL SECURITY" means either the 144A Global Security or the
Regulation S Global Security, as these terms are defined in Section 2.5 hereof.
"INDEBTEDNESS" means with respect to any person, any of the following
(without duplication): (i) the principal of, premium, if any, and interest on
and all other amounts owing with respect to any indebtedness (including any such
indebtedness representing any deferred payment obligation for the payment of the
purchase price of property or assets) of such person for money borrowed or
evidenced by bonds, notes, debentures or similar obligations, including any
guaranty by such person of any indebtedness for money borrowed of any other
person, whether any such indebtedness or guaranty is outstanding on the date of
the Indenture or is thereafter created, assumed or incurred, (ii) Acquisition
Indebtedness, (iii) lease obligations which such person capitalizes in
accordance with generally accepted accounting principles and (iv) any amounts
payable by such person under or in respect of any interest rate exchange
agreement, interest rate swap agreement or other similar agreement entered into
in respect of all or any portion of the above.
"INDENTURE" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"ISSUER" means SAFEGUARD SCIENTIFICS, INC., a corporation incorporated
under the laws of the Commonwealth of Pennsylvania, and, subject to Article
Eight, its successors and assigns.
"HOLDER", "HOLDER OF SECURITIES", "SECURITYHOLDER" or other similar
terms means the registered holder of any Security.
"MAJORITY SUBSIDIARY" means, as to any person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such person; unless otherwise specified, "Majority Subsidiary" means a Majority
Subsidiary of the Issuer.
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"NON-RECOURSE INDEBTEDNESS" means Indebtedness or that portion of
Indebtedness as to which none of the Issuer and any of its subsidiaries: (i)
provides credit support (including any undertaking, agreement or instrument
which would constitute Indebtedness) or (ii) is directly or indirectly liable.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors or the President or any Vice President (whether or not
designated by a number or numbers or a word or words added before or after the
title "Vice President") and by the Senior Vice President-Finance or Corporate
Controller or the Secretary or any Assistant Secretary of the Issuer and
delivered to the Trustee. Each such certificate shall comply with Section 314
of the Trust Indenture Act of 1939 and include the statements provided for in
Section 10.5.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer or who may be other
counsel satisfactory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act and include the statements provided for
in Section 10.5, if and to the extent required hereby.
"ORIGINAL ISSUE DATE" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"OUTSTANDING", when used with reference to Securities, shall, subject
to the provisions of Section 6.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofor cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Issuer) or shall
have been set aside, segregated and held in trust by the Issuer (if the
Issuer shall act as its own paying agent), provided that if such Securities
are to be redeemed prior to the maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory to the
Trustee shall have been
17
made for giving such notice; and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant
to the terms of Section 2.6 (unless proof satisfactory to the Trustee is
presented that any of such Securities is held by a person in whose hands
such Security is a legal, valid and binding obligation of the Issuer),
Securities converted into Common Stock pursuant hereto and Securities not
deemed outstanding pursuant to Section 11.2.
"PRINCIPAL" wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"QUALIFIED INSTITUTIONAL BUYER" has the meaning assigned thereto in
Rule 144A.
"REGISTER" has the meaning given to that term in Section 2.5 hereof.
"REGULATION S" means Regulation S under the Securities Act, and any
successor regulation thereto.
"REGULATION S PURCHASER" means a person purchasing an interest in the
Securities in accordance with Rule 904 of Regulation S.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means the
chairman of the board of directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president
(whether or not designated by numbers or words added before or after the title
"vice president"), the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
"RESTRICTED SECURITY" means a Security that bears or is required to
bear the legend set forth in Section 2.5(d) hereof.
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"RIGHTS" mean any right to purchase capital stock of the Issuer to be
attached to the shares of Common Stock of the Issuer upon conversion, or similar
rights issued the holders of Common Stock in addition thereto or in replacement
thereof.
"RULE 144A" means Rule 144A under the Securities Act and any successor
rule thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY" or "SECURITIES" means any note, as the case may be,
authenticated and delivered under this Indenture.
"SENIOR INDEBTEDNESS" means Indebtedness of the Issuer whether
outstanding on the date hereof or thereafter created, incurred, assumed or
guaranteed (including, without limitation, interest that accrues on or after the
filing of a petition in bankruptcy or for reorganization, if a claim for post-
petition interest is allowed in such proceeding) except (i) any Indebtedness
outstanding after the date of the Indenture as to which, by the express terms of
the instrument creating or evidencing the same, it is provided that such
Indebtedness is not senior or superior in right of payment to the Securities,
(ii) the Securities, (iii) any Indebtedness of the Issuer to any Majority
Subsidiary, (iv) Indebtedness incurred in connection with the purchase of goods,
assets, materials or services in the ordinary course of business or representing
amounts recorded as accounts payable, trade payables or other current
liabilities of the Issuer on the books of the Issuer (other than Acquisition
Indebtedness and the current portion of any long-term Indebtedness of the Issuer
that but for this clause (iv) would constitute Senior Indebtedness), (v) any
Indebtedness of or amount owed by the Issuer to employees for services rendered
to the Issuer, and (vi) any liability for federal, state, local or other taxes
owing or owed by the Issuer.
"STOCK TRANSFER AGENT" means Chemical Mellon Shareholder Services,
L.L.C., as transfer agent for the Common Stock, or any successor transfer agent.
"TRADING DAY" shall mean (A) if the applicable security is listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such other
national securities exchange is open for business or (B) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made on the Nasdaq National Market or (C) if the applicable security is not
otherwise listed,
19
admitted for trading or quoted, any day other than a Saturday or Sunday or on a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"TRUSTEE" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Five, shall also
include any successor trustee.
"TRUST INDENTURE ACT OF 1939" means the Trust Indenture Act of 1939 as
in force at the date as of which this Indenture was originally executed.
ARTICLE TWO
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES.
SECTION 2.1 AUTHENTICATION AND DELIVERY OF SECURITIES. Upon the
execution and delivery of this Indenture, or from time to time thereafter,
Securities in an aggregate principal amount not in excess of the amount
specified in the form of Security hereinabove recited (except as otherwise
provided in Section 2.6) may be executed by the Issuer and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Securities to or upon the written order of the Issuer, signed by
both (a) its Chairman of the Board of Directors, or any Vice Chairman of the
Board of Directors, or its President or any Vice President (whether or not
designated by a number or numbers or a word or words added before or after the
title "Vice President") and (b) by its Senior Vice President-Finance or
Corporate Controller without any further action by the Issuer.
If the Securities are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall authenticate and
deliver one or more Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of all or a
portion of the Securities issued and not yet cancelled or exchanged, (ii) shall
be registered in the name of the Depositary for such Global Security or
Securities or the nominee of such Depositary, and (iii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions.
SECTION 2.2 EXECUTION OF SECURITIES. The Securities shall be signed
on behalf of the Issuer by both (a)
20
its Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors or its President or any Vice President (whether or not designated by a
number or numbers or a word or words added before or after the title "Vice
President") and (b) by its Senior Vice President-Finance or Corporate Controller
or its Secretary or any Assistant Secretary, under its corporate seal which may,
but need not, be attested. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security which
has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Issuer, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such officer.
SECTION 2.3 CERTIFICATE OF AUTHENTICATION. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by manual signature of one of its
authorized officers, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee upon any
Security executed by the Issuer shall be conclusive evidence that the Security
so authenticated has been duly authenticated and delivered hereunder and that
the holder is entitled to the benefits of this Indenture.
SECTION 2.4 FORM, DENOMINATION AND DATE OF SECURITIES; PAYMENTS OF
INTEREST. The Securities and the Trustee's certificates of authentication shall
be substantially in the form recited above. The Securities shall be issuable as
registered securities without coupons and in denominations of $1,000 and
integral multiples of $1,000. The Securities shall be numbered, lettered, or
otherwise distinguished in such manner or in accordance with such plans
21
as the officers of the Issuer executing the same may determine with the approval
of the Trustee.
Any of the Securities may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with the rules of any securities market in
which the Securities are admitted to trading, or to conform to general usage.
Each Security shall be dated the date of its authentication, shall
bear interest from the applicable date and shall be payable on the dates
specified on the face of the form of Security recited above.
The person in whose name any Security is registered at the close of
business on any record date with respect to any interest payment date shall be
entitled to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, or, subject, in the case of
conversion of such Security during such period, to Section 13.2, except if and
to the extent the Issuer shall default in the payment of the interest due on
such interest payment date, in which case such defaulted interest shall be paid
to the persons in whose names outstanding Securities are registered at the close
of business on a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Issuer to the holders
of Securities not less than 15 days preceding such subsequent record date. The
term "record date" as used with respect to any interest payment date (except a
date for payment of defaulted interest) shall mean if such interest payment date
is the first day of a calendar month, the fifteenth day of the next preceding
calendar month and shall mean, if such interest payment date is the fifteenth
day of a calendar month, the first day of such calendar month, whether or not
such record date is a Business Day.
SECTION 2.5. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY. (a) The Issuer shall keep at its
principal office, or shall cause to be kept, at one of the offices or agencies
maintained pursuant to Section 3.2, a register (the "Register") in which,
subject to such reasonable regulations as it may prescribe, Securities shall be
registered and the transfer of Securities shall be registered as in this Article
Two provided. Such Register
22
shall be in written form or in any other form capable of being converted into
written form within a reasonable time. At all reasonable times such Register
shall be open for inspection by the Trustee.
Upon surrender for registration of transfer of any Security to the
Trustee and satisfaction of the requirements for such transfer set forth in this
Section 2.5, the Issuer shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations in excess of $100,000 and of a
like aggregate principal amount at maturity and bearing such restrictive legends
as may be required by this Indenture.
Securities may be exchanged for a like aggregate principal amount at
maturity of Securities of other authorized denominations in excess of $100,000.
Securities to be exchanged shall be surrendered at any office or agency to be
maintained by the Issuer pursuant to Section 3.2 and the Issuer shall execute
and register and the Trustee shall authenticate and deliver in exchange therefor
the Security or Securities which the Securityholder making the exchange shall be
entitled to receive, bearing registration numbers not contemporaneously
outstanding.
All Securities presented for registration of transfer or for exchange,
redemption, conversion or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder or his attorney duly authorized in writing. Prior to
the earlier of (i) the date which is three years after the issuance of the
Security (or any predecessor Security) or (ii) the date after which the Issuer
instructs the Trustee to remove the restricted legend described in paragraph (d)
hereof from the Security (or a predecessor Security) the Certificate of Transfer
shall be required, unless the Issuer otherwise instructs the Trustee.
No service charge shall be charged to the Securityholder for any
exchange or registration of transfer of Securities, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
Neither the Issuer nor the Trustee shall be required to exchange or
register a transfer of (a) any Securities for a period of 15 days next preceding
the first mailing of notice of redemption to Holders of Securities to be
redeemed or (b) any Securities or portions thereof selected or called for
23
redemption or (c) any Securities or portion thereof surrendered for conversion.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture as the Securities surrendered upon
such exchange or transfer.
(b) So long as the Securities are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Securities to be
traded on the PORTAL Market may be represented by a Global Security or
Securities registered in the name of the Depositary or the nominee of the
Depositary. Securities sold pursuant to Regulation S may be represented by a
Security in global form (the "Regulation S Global Security") and Securities sold
to Qualified Institutional Buyers in compliance with Rule 144A may be
represented by another Security in global form (the "144A Global Security").
The transfer and exchange of beneficial interests within a Global Security shall
be effected through the Depositary, in accordance with this Indenture (including
the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.
At any time at the request of the beneficial holder of an interest in
a Global Security, such beneficial holder shall be entitled to obtain a
definitive Security upon written request to the Trustee in accordance with the
procedures of the Depositary for the issuance thereof. Upon receipt of any such
request, the Trustee will cause, in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount at maturity of
the Global Security to be reduced and, following such reduction, the Issuer will
execute and the Trustee will authenticate and deliver to such beneficial holder
(or its nominee) a Security or Securities in the appropriate aggregate principal
amount at maturity of the name of such beneficial holder (or its nominee) and
bearing such restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in a Global Security which
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its nominee) of a definitive Security or
Securities registered in the name of the transferee (or its nominee) on the
books maintained by the Trustee. With respect to any such transfer, the Trustee
will cause, in accordance with the standing instructions and procedures of the
Depositary, the aggregate principal amount at maturity of the Global Security to
be reduced and, following such reduction, the Issuer will
24
execute and the Trustee will authenticate and deliver to the transferee (or such
transferee's nominee, as the case may be), a Security or Securities in the
appropriate aggregate principal amount at maturity in the name of such
transferee (or its nominee) and bearing such restrictive legends as may be
required by this Indenture.
(c) So long as the Securities are eligible for book-entry settlement,
or unless otherwise required by law, upon any transfer of a definitive Security
to a Qualified Institutional Buyer in accordance with Rule 144A or a Regulation
S Purchaser in accordance with Rule 904 under the Securities Act, unless
otherwise requested by the transferor, and upon receipt of the definitive
Security or Securities being so transferred, together with a certification from
the transferor that the transferee is a Qualified Institutional Buyer or
Regulation S Purchaser, as applicable (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on either the 144A Global
Security or the Regulation S Global Security, as appropriate, to reflect an
increase in the aggregate principal amount at maturity of the Securities
represented by such Global Security, the Trustee shall cancel such definitive
Security or Securities in accordance with the standing instructions and
procedures of the Depositary, the aggregate principal amount at maturity of
Securities represented by the appropriate Global Security to be increased
accordingly; PROVIDED that no definitive Security, or portion thereof, in
respect of which the Issuer or an Affiliate of the Issuer held any beneficial
interest shall be included in such Global Security until such definitive
Security is freely tradable in accordance with Rule 144(k); and PROVIDED FURTHER
that the Trustee shall issue Securities in definitive form upon any transfer of
a beneficial interest in the Global Security to the Issuer or any Affiliate of
the Issuer.
So long as the Securities are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of an interest in one Global
Security to the other Global Security, upon certification from the transferor
that the transferee is a Qualified Institutional Buyer or Regulation S
Purchaser, as applicable (or other evidence satisfactory to the Trustee), the
Trustee shall make an endorsement on either the 144A Global Security or the
Regulation S Global Security (the "transferee"), as appropriate, to reflect an
increase in the aggregate principal amount at maturity of the Securities
represented by such Global Security and the Trustee will cause, in accordance
with the standing instructions and procedures of the Depositary, the aggregate
principal amount at maturity of the other Global Security (the "transferor") to
be correspondingly reduced.
25
Any Global Security may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Securities to
be tradeable on the PORTAL Market or as may be required for the Securities to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange upon
which the Securities may be listed or traded or to conform with any usage with
respect thereto, or to indicate any special limitations or restrictions to which
any particular Securities are subject.
(d) Every Restricted Security shall be subject to the restrictions on
transfer provided in the legend required to be borne by each Restricted Security
pursuant to this Section 2.5, and the holder of each Restricted Security, by
such Securityholder's acceptance thereof, agrees to be bound by such
restrictions on transfer, unless such restrictions on transfer shall be waived
by the written consent of the Issuer. As used in this Section 2.5(d) and in
Section 2.5(e), the terms "transfer" encompasses any sale, pledge, transfer or
other disposition of any Restricted Security.
Until the earlier of (i) three years after the original issuance date
of any Security (or any predecessor Security), (ii) such earlier time as the
Security ceases to be subject to the requirements of paragraphs (c), (e), (f)
and (h) of Rule 144 under the Securities Act, or (iii) the date on which the
Issuer instructs the Trustee to remove the restricted legend from the Security
(or predecessor Security) any certificate evidencing such Security (and all
securities issued in exchange or substitution therefor, other than Common Stock,
if any, issued upon conversion thereof that shall bear the legend set forth in
Section 2.5(e), if applicable) shall bear a legend in substantially the
following form, unless otherwise agreed by the Issuer (with written notice
thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1)
26
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT)("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER
THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE EXCEPT (A) TO SAFEGUARD SCIENTIFICS, INC. OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT OR (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THREE YEARS FROM
THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY OR AT SUCH EARLIER TIME
AS THE NOTE CEASES TO BE SUBJECT TO THE REQUIREMENTS OF PARAGRAPHS (C),
(E), (F) AND (H) OF RULE 144 UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any Security (or security issued in exchange or substitution therefor)
as to which such restrictions on
27
transfer shall have expired in accordance with their terms, may upon surrender
of such Security for exchange to the Security registrar in accordance with the
provisions of this Section 2.5, be exchanged for a new Security or Securities,
of like tenor and aggregate principal amount at maturity, which shall not bear
the restrictive legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.5(d)), a Global Security may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Each Depositary shall, at the time of its designation and at all times
while it serves as Depositary, be a clearing agency registered under the
Exchange Act and any other applicable law or regulation. The Issuer initially
appoints The Depository Trust Company to act as Depositary with respect to the
Global Securities. Initially, the Global Security shall be issued to the
Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the custodian for Cede & Co.
If at any time the Depositary for the Global Security notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Security, the Issuer may appoint a successor Depositary with respect to such
Security. If a successor Depositary for the Security is not appointed by the
Issuer within 90 days after the Issuer receives such notice, the Issuer will
execute, and the Trustee, upon receipt of an Officers' Certificate for
authentication and delivery of Securities, will authenticate and deliver
Securities in definitive form, in an aggregate principal amount at maturity
equal to the principal amount at maturity of the Global Security, in exchange
for the such Global Security.
If a definitive Security is issued in exchange for any portion of a
Global Security after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such Security, but will
be payable on such interest payment date only to the person to whom interest in
respect of such portion of such Global Security is payable in accordance with
the provisions of this Indenture.
28
Definitive Securities issued in exchange for all or a part of a Global
Security pursuant to this Section 2.5 shall be registered in such names and in
such authorized denominations but in the principal amount of $100,000 and
multiples of $1,000 in excess thereof as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Securities to the person in whose names such definitive
Securities are so registered.
At such time as all interests in a Global Security have been redeemed,
converted, repurchased or canceled, such Global Security shall be canceled by
the Trustee in accordance with standing procedures and instructions of the
Depositary. At any time prior to such cancellation, if any interest in a Global
Security is exchanged for definitive Securities, redeemed, converted, canceled,
or transferred to a transferee who receives definitive Securities therefor or
any definitive Security is exchanged or transferred for part of a Global
Security, the principal amount at maturity of such Global Security shall, in
accordance with the standing procedures and instructions of the Depositary be
reduced or increased, as the case may be, and an endorsement shall be made on
such Global Security by the Trustee to reflect such reduction or increase.
(e) Until the earlier of (i) three years after the original issuance
date of any Security (or predecessor Security), (ii) such earlier time as the
Common Stock issued upon conversion of the Security ceases to be subject to the
requirements of paragraphs (c), (e), (f) and (h) of Rule 144 under the
Securities Act or (iii) the date on which the Issuer instructs the Trustee to
remove the restricted legend from the Security (or predecessor Security), any
stock certificate representing Common Stock issued upon conversion of such
Security shall bear a legend in substantially the following form, unless
otherwise agreed by the Issuer (with written notice thereof to the Stock
Transfer Agent):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE
UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED
29
HEREBY WAS ISSUED, (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON
STOCK EVIDENCED HEREBY EXCEPT (A) TO SAFEGUARD SCIENTIFICS, INC. OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
COMPLIANCE WITH RULE 144A, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER, FURNISHES TO CHEMICAL
MELLON SHAREHOLDER SERVICES, L.L.C., AS TRANSFER AGENT (OR A SUCCESSOR
TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM SUCH TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE),
(2) PRIOR TO SUCH TRANSFER, IT WILL FURNISH TO CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON
TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED
OR UPON THE EARLIER SATISFACTION OF CHEMICAL MELLON SHAREHOLDER SERVICES,
L.L.C., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE)
THAT THE COMMON STOCK HAS BEEN OR IS BEING OFFERED AND SOLD IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR AT SUCH EARLIER TIME AS THE
COMMON STOCK CEASES TO BE SUBJECT TO THE REQUIREMENTS OF PARAGRAPHS (C),
(E), (F) AND (H) OF RULE 144 UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Securities which do not bear the restrictive legend of paragraph (d) hereof will
be convertible for Common Stock
30
which does not bear the restrictive legend above.
(f) Any certificate evidencing a Security that has been transferred
to an Affiliate of the Issuer within three years after the original issuance
date of the Security, as evidenced by a notation on the Certificate of Transfer
for such transfer or in the representation letter delivered in respect thereof,
shall, until three years after the last date on which the Issuer or any
Affiliate of the Issuer was an owner of such Security, bear a legend in
substantially the following form, unless otherwise agreed by the Issuer (with
written notice thereof to the Trustee);
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR
THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO
SAFEGUARD SCIENTIFICS, INC. OR ANY SUBSIDIARY THEREOF, (B) IN A TRANSACTION
REGISTERED UNDER THE SECURITIES ACT OR (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE)
AND (2) THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IF THE PROPOSED TRANSFER IS PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE ISSUER MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Any stock certificate representing Common Stock issued upon conversion of such
Security shall also bear a legend in substantially the form indicated above,
unless otherwise agreed by the Issuer (with written notice thereof to the
31
Trustee).
SECTION 2.6 MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN
SECURITIES. In case any temporary or definitive Security shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Security, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so apparently destroyed, lost or stolen. In every case the applicant for a
substitute Security shall furnish to the Issuer and to the Trustee and any agent
of the Issuer or the Trustee such security or indemnity as may be required by
them to indemnify and defend and to save each of them harmless and, in every
case of destruction, loss or theft evidence to their satisfaction of the
apparent destruction, loss or theft of such Security and of the ownership
thereof.
Upon the issuance of any substitute Security, the Issuer 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. In case any Security
which has matured or is about to mature, or has been called for redemption in
full, or is being surrendered for conversion in full shall become mutilated or
defaced or be apparently destroyed, lost or stolen, the Issuer may, instead of
issuing a substitute Security, with the holder's consent, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
or defaced Security), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless
from all risks, however remote, and, in every case of apparent destruction, loss
or theft, the applicant shall also furnish to the Issuer and the Trustee and any
agent of the Issuer or the Trustee evidence to their satisfaction of the
apparent destruction, loss or theft of such Security and of the ownership
thereof.
Every substitute Security issued pursuant to the provisions of this
Section by virtue of the fact that any Security is apparently destroyed, lost or
stolen shall constitute an additional contractual obligation of the Issuer,
whether or not the apparently destroyed, lost or stolen Security shall be at any
time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture
32
equally and proportionately with any and all other Securities duly authenticated
and delivered hereunder. All Securities shall be held and owned upon the
express condition that, to the extent permitted by law, the foregoing provisions
are exclusive with respect to the replacement or payment or conversion of
mutilated, defaced, or apparently destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 2.7 CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All
Securities surrendered for payment, redemption, registration of transfer or
exchange or conversion, if surrendered to the Issuer or any agent of the Issuer
or the Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Indenture. The Trustee shall destroy cancelled Securities held by it and
deliver a certificate of destruction to the Issuer. If the Issuer shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee for cancellation.
SECTION 2.8 TEMPORARY SECURITIES. Pending the preparation of
definitive Securities, the Issuer may execute and the Trustee shall authenticate
and deliver temporary Securities (printed, lithographed, typewritten or
otherwise reproduced, in each case in form satisfactory to the Trustee).
Temporary Securities shall be issuable as registered Securities without coupons,
of any authorized denomination, and substantially in the form of the definitive
Securities but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Securities and thereupon
temporary Securities may be surrendered in exchange therefor without charge at
each office or agency to be maintained by the Issuer for the purpose pursuant to
Section 3.2, and the Trustee shall authenticate and deliver in exchange for such
33
temporary Securities a like aggregate principal amount of definitive Securities
of authorized denominations. Until so exchanged the temporary Securities shall
be entitled to the same benefits under this Indenture as definitive Securities.
ARTICLE THREE
COVENANTS
OF
THE ISSUER AND THE TRUSTEE.
SECTION 3.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of, and interest on, each of the Securities at the place or places, at
the respective times and in the manner provided in the Securities. Payment of
the principal of and interest on the Securities will be made in immediately
available funds and 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.
Payment in respect of the principal of a Security will be made only against
surrender of that Security. Upon application by the Holder to the Trustee not
later than the 10th day immediately preceding the relevant January 15 or July
15, such Holder may receive payment of interest by wire transfer to a U.S.
Dollar account (such transfers to be made only to Holders of an aggregate
principal amount in excess of U.S. $5,000,000) maintained by the payee with a
bank in The City of New York; and PROVIDED, that, subject to the preceding
portion of the sentence, payment of interest may, at the option of the Issuer,
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Register. Unless such designation is revoked, any
such designation made by the Holder with respect to a Security will remain in
effect with respect to future payments with respect to that Security payable to
the Holder. The Issuer will pay any administrative costs imposed by banks in
connection with making any such payments upon application of such Holder for
reimbursement. If the Security is a Global Security, then, notwithstanding the
first and fourth sentences of this paragraph, each such payment will be made in
accordance with the procedures of the U.S. Depositary as then in effect.
SECTION 3.2 OFFICES FOR PAYMENTS, ETC. So long as any of the
Securities remain outstanding, the Issuer will maintain in the Borough of
Manhattan, The City of New York, the following: (a) an office or agency where
the Securities may be presented for payment, (b) an office or agency where
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the Securities may be presented for registration of transfer and for exchange
and conversion as in this Indenture provided and (c) an office or agency where
notices and demands to or upon the Issuer in respect of the Securities or of
this Indenture may be served. The Issuer will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. The Issuer hereby initially designates the Corporate Trust
Office of the Trustee as the office or agency for each such purpose. In case
the Issuer shall fail to maintain any such office or agency or shall fail to
give such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Corporate
Trust Office.
SECTION 3.3 APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 5.9, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 3.4 PAYING AGENTS. Whenever the Issuer shall appoint a
paying agent other than the Trustee, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities (whether such
sums have been paid to it by the Issuer or by any other obligor on the
Securities) in trust for the benefit of the holders of the Securities or of
the Trustee,
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities) to make any payment of the
principal of or interest on the Securities when the same shall be due and
payable, and
(c) pay any such sums so held in trust by it to the Trustee upon the
Trustee's written request at any time during the continuance of the failure
referred to in clause (b) above.
The Issuer will, prior to each due date of the principal of or
interest on the Securities, deposit with the paying agent a sum sufficient to
pay such principal or interest, and (unless such paying agent is the Trustee)
the Issuer will promptly notify the Trustee of any failure to take
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such action.
If the Issuer shall act as its own paying agent, it will, on or before
each due date of the principal of or interest on the Securities, set aside,
segregate and hold in trust for the benefit of the holders of the Securities a
sum sufficient to pay such principal or interest so becoming due. The Issuer
will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the Issuer
may at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by the Issuer or any paying agent hereunder, as required
by this Section, such sums to be held by the Trustee upon the trusts herein
contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are subject to the
provisions of Sections 9.3 and 9.4.
SECTION 3.5 CERTIFICATE TO TRUSTEE. The Issuer will furnish to the
Trustee on or before February 1 in each year (beginning with 1997 a brief
certificate (which need not comply with Section 10.5) from the principal
executive, financial or accounting officer of the Issuer as to his or her
knowledge of the Issuer's compliance with all conditions and covenants under the
Indenture (such compliance to be determined without regard to any period of
grace or requirement of notice provided under the Indenture).
SECTION 3.6 SECURITYHOLDERS' LISTS. If and so long as the Trustee
shall not be the Security registrar, the Issuer will furnish or cause to be
furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the holders of the Securities pursuant to
Section 312 of the Trust Indenture Act (a) semi-annually not more than 15 days
after each record date for the payment of semi-annual interest on the
Securities, as hereinabove specified, as of such record date, and (b) at such
other times as the Trustee may request in writing, within thirty days after
receipt by the Issuer of any such request as of a date not more than 15 days
prior to the time such information is furnished.
SECTION 3.7 REPORTS BY THE ISSUER. The Issuer covenants to file with
the Trustee, within 15 days after the Issuer is required to file the same with
the Securities and
36
Exchange Commission (the "Commission"), copies of the annual reports and of the
information, documents, and other reports which the Issuer may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act.
SECTION 3.8 REPORTS BY THE TRUSTEE. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before August 1 in each year, and shall be dated as of a date convenient to
the Trustee no more than 60 nor less than 45 days prior thereto.
SECTION 3.9 INFORMATION TO BE PROVIDED TO HOLDERS OF SECURITIES.
While any Securities remain Outstanding and are subject to the requirements of
paragraphs (c), (e), (f) and (h) of Rule 144 under the Securities Act the Issuer
will, during any period in which it is not subject to Section 13 or 15(d) under
the Exchange Act, make available to any Holder of such Securities in connection
with any sale thereof and any prospective purchaser of such Securities, in each
case upon request, the information specified in, and meeting the requirements
of, Rule 144A(d)(4) under the Securities Act (or any successor thereto.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT.
SECTION 4.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY;
WAIVER OF DEFAULT. In case one or more of the following Events of Default
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing, that
is to say:
(a) default in the payment of any installment of interest upon any of
the Securities as and when the same shall become due and payable, and
continuance of such default for a period of 30 days (whether or not such
payment is prohibited by the subordination provisions of the Indenture); or
(b) default in the payment of all or any part of the principal on any
of the Securities as and when the same shall become due and payable either
at maturity, upon any redemption, by declaration or otherwise (whether or
not such payment is prohibited by the subordination provisions of the
Indenture); or
37
(c) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the
Securities or in this Indenture contained for a period of 60 days after the
date on which written notice specifying such failure, stating that such
notice is a "Notice of Default" hereunder and demanding that the Issuer
remedy the same, shall have been given by registered or certified mail,
return receipt requested, to the Issuer by the Trustee, or to the Issuer
and the Trustee by the holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding; or
(d) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Issuer or for any
substantial part of its property or ordering the winding up or liquidation
of its affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(e) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of its
property, or make any general assignment for the benefit of creditors; or
(f) default by the Issuer in the conversion of any Security in
accordance herewith; or
(g) the Issuer or any of its Majority Subsidiaries shall have failed
to pay principal at maturity of, or an event of default shall have
occurred, and be continuing under and resulted in the acceleration of, any
loan agreement, mortgage, indenture or other instrument under which there
is issued or by which there is secured or evidenced any Indebtedness (other
than the Securities and Non-Recourse Indebtedness) of the Issuer or any of
its Majority Subsidiaries, whether such Indebtedness exists on the date of
the issuance of the Securities or shall be
38
created hereafter, and the principal amount of such Indebtedness which,
together with any such other Indebtedness so accelerated or not paid at
maturity, aggregates an amount equal to or greater than $25,000,000; or
(h) a final judgment, order or decree other than a judgment, order or
decree in respect of Non-Recourse Indebtedness which, together with other
such outstanding final judgments, orders or decrees entered against the
Issuer and/or any of its Majority Subsidiaries, is equal to or exceeds an
aggregate of $10,000,000 (not covered by valid and collectible insurance
from solvent unaffiliated insurers) shall be entered against the Issuer
and/or any of its Majority Subsidiaries and within 45 days after entry
thereof such judgment or judgments shall not have been vacated, satisfied
or discharged or execution thereof stayed or, within 45 days after
expiration of any such stay, such judgment shall not have vacated,
satisfied or discharged.
If an Event of Default described in Clauses (a), (b), (c), (f), (g) or (h) above
occurs and is continuing, then, and in each and every such case, unless the
principal of all of the Securities shall have already become due and payable,
either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Securities then outstanding hereunder, by providing a Notice of
Default in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the entire principal of all the Securities and the
interest accrued thereon, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable. If an Event of
Default described in clause (d) or (e) occurs, then, and in each and every case,
unless the principal of all the Securities shall have already become due and
payable, the entire principal of all the Securities then outstanding and
interest accrued thereon, if any, shall automatically become due and payable
immediately without notice to the Issuer. This provision, however, is subject
to the condition that if, at any time after the principal of the Securities
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the
Securities and the principal of any and all Securities which shall have become
due otherwise than by acceleration (with interest upon such principal and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, at the
39
same rate as the rate of interest specified in the Securities, to the date of
such payment or deposit) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith, and if any and all Events of
Default under the Indenture, other than the non-payment of the principal of
Securities which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein--then and in every such case the
holders of a majority in aggregate principal amount of the Securities then
outstanding, by written notice to the Issuer and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
SECTION 4.2 COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
DEBT. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities when such
interest shall have become due and payable, and such default shall have
continued for a period of 30 days or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Securities when the
same shall have become due and payable, whether upon maturity or upon any
redemption or by declaration or otherwise--then upon demand of the Trustee, the
Issuer will pay to the Trustee for the benefit of the holders of the Securities
the whole amount that then shall have become due and payable on all such
Securities for principal or interest, as the case may be (with interest to the
date of such payment upon the overdue principal and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest specified in the Securities);
and in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to the
Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel, and any expenses and liabilities incurred, and all advances made, by
the Trustee and each predecessor Trustee except as a result of its negligence or
bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities to the registered holders, whether
or not the Securities be overdue.
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In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities 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
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities, 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 reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence or bad
faith) and of the Securityholders allowed in any judicial proceedings
relative to the Issuer or other obligor upon the Securities, or to the
creditors or property of the Issuer or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or
41
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Securityholders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and reasonable compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.
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SECTION 4.3 APPLICATION OF PROCEEDS. Any moneys collected by the
Trustee pursuant to this Article shall, subject to the subordination provisions
hereof, be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal
or interest, upon presentation of the several Securities and stamping (or
otherwise noting) thereon the payment, or issuing Securities in reduced
principal amounts in exchange for the presented Securities if only partially
paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses, including reasonable
compensation to the Trustee and each predecessor Trustee and their
respective agents and attorneys and of all expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith;
SECOND: In case the principal of the Securities shall not have become
and be then due and payable, to the payment of interest in default in the
order of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the same rate as the rate of
interest specified in the Securities, such payments to be made ratably to
the persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities for principal and interest, with
interest upon the overdue principal, and (to the extent that such interest
has been collected by the Trustee) upon overdue installments of interest at
the same rate as the rate of interest specified in the Securities; and in
case such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities, then to the payment of such principal
and interest, without preference or priority of principal over interest, or
of interest over principal, or of any installment of interest over any
other installment of interest, or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and unpaid interest;
and
FOURTH: To the payment of the remainder, if any, to the Issuer or any
other person lawfully entitled thereto.
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SECTION 4.4 SUITS FOR ENFORCEMENT. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 4.5 RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 4.6 LIMITATIONS ON SUITS BY SECURITYHOLDERS. No holder of
any Security shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or for
the appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such holder previously shall
have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the holders of not less than
25% in aggregate principal amount of the Securities then outstanding shall have
made written request upon the Trustee to institute such action or proceedings in
its own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action or proceedings and no direction inconsistent with such
written request shall have been given to the Trustee pursuant to Section 4.8; it
being understood and intended, and being expressly covenanted by the taker and
holder of every Security with every other taker and holder and the Trustee, that
no one or more holders of Securities shall have any right
44
in any manner whatever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities. For the protection and enforcement of the provisions of
this Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 4.7 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. Except as provided in Section 2.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders 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.
No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 4.6, every power and remedy given
by this Indenture or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
SECTION 4.8 CONTROL BY SECURITYHOLDERS. The holders of a majority in
aggregate principal amount of the Securities at the time outstanding 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 by this Indenture; PROVIDED that such direction shall not be
otherwise than in accordance with law and the provisions of this Indenture and
PROVIDED FURTHER that (subject to the provisions of Section 5.1) the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board
of directors, the executive committee, or a
45
trust committee of directors or responsible officers of the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability or if the Trustee in good faith shall so determine that
the actions or forebearances specified in or pursuant to such direction shall be
unduly prejudicial to the interests of holders of the Securities not joining in
the giving of said direction, it being understood that (subject to Section 5.1)
the Trustee shall have no duty to ascertain whether or not such actions or
forebearances are unduly prejudicial to such holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
SECTION 4.9 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
maturity of the Securities as provided in Section 4.1, the holders of a majority
in aggregate principal amount of the Securities at the time outstanding may, on
behalf of the holders of all the Securities, waive any past default or Event of
Default hereunder and its consequences, except a default (a) in the payment of
principal of or interest on any of the Securities or in respect of conversion of
Securities or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the holder of each Security affected.
In the case of any such waiver, the Issuer, the Trustee and the holders of the
Securities shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
ARTICLE FIVE
CONCERNING THE TRUSTEE.
SECTION 5.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING
DEFAULT; PRIOR TO DEFAULT. The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiving of all Events of Default which may have
occurred,
46
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred (which has
not been cured or waived) 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.
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
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of
any such statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a responsible officer or responsible officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) 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 not less than a majority in principal amount of the
47
Securities at the time outstanding 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if adequate indemnity against such liability is not
reasonably assured to it.
This Section 5.1 is in furtherance of and subject to Sections 315 and
316 of the Trust Indenture Act of 1939.
SECTION 5.2 CERTAIN RIGHTS OF THE TRUSTEE. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 5.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, note, coupon, security or other paper or
document believed by it to be genuine (on its face) and to have been signed
or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the secretary or an assistant secretary of the
Issuer;
(c) the Trustee may consult with counsel of its choice and any advice
or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by it hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered
48
to the Trustee reasonable security or indemnity (at the election of the
Trustee) against the costs, expenses and liabilities which might be
incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing so
to do by the holders of not less than a majority in aggregate principal
amount of the Securities then outstanding; PROVIDED that, if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such examination
shall be paid by the Issuer or, if paid by the Trustee or any predecessor
trustee, shall be repaid by the Issuer upon demand; 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 not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent
or attorney appointed with due care by it hereunder.
SECTION 5.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF
SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of
49
the Securities or of the proceeds thereof.
SECTION 5.4 TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC.
The Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and may otherwise
deal with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee or such
agent.
SECTION 5.5 MONEYS HELD BY TRUSTEE. Subject to the provisions of
Section 9.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 5.6 COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM. The Issuer covenants and agrees to pay to the Trustee, in accordance
with its written agreement, from time to time, and the Trustee shall be entitled
to, reasonable compensation (which shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust) and the Issuer
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Issuer also covenants to indemnify the
Trustee and each predecessor 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
Indenture or the trusts hereunder and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of liability
in the premises. The obligations of the Issuer under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. Such additional
50
indebtedness shall be a prior lien to that of the Securities upon all property
and funds held or collected by the Trustee as such, except funds held in trust
for the benefit of the holders of particular Securities, and the Securities are
hereby subordinated to such prior lien. When the Trustee or any agent incurs
expenses or renders services after an Event of Default specified in Section
4.1(d) or 4.1(e) occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any applicable bankruptcy law.
SECTION 5.7 RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC.
Subject to Sections 5.1 and 5.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 5.8 PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. The Trustee
hereunder shall at all times be a corporation having a combined capital and
surplus of at least $5,000,000, and which is eligible in accordance with the
provisions of Section 310(a) of the Trust Indenture Act of 1939. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of a Federal, State or District of Columbia 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.
SECTION 5.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
TRUSTEE. (a) The Trustee may at any time resign by giving written notice of
resignation to the Issuer and by mailing notice thereof by first-class mail to
holders of Securities at their last addresses as they shall appear on the
Register. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee by written instrument in duplicate, executed by
authority of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee.
51
If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been a bona
fide holder of a Security or Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939, after written
request therefor by the Issuer or by any Securityholder who has been a
bona fide holder of a Security or Securities for at least six months;
or
(ii) the Trustee shall cease to be eligible in accordance with
the provisions of Section 5.8 and shall fail to resign after written
request therefor by the Issuer or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator 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, the Issuer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Issuer, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to Section 315(e) of the Trust Indenture Act of 1939, any Securityholder
who has been a bona fide holder of a Security or Securities 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. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate
52
principal amount of the Securities at the time outstanding may at any time
remove the Trustee and appoint a successor trustee by delivering to the Trustee
so removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 6.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee and any appointment of
a successor trustee pursuant to any of the provisions of this Section 5.9
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 5.10.
SECTION 5.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 5.9 shall execute and deliver
to the Issuer and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Issuer or of the successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to Section 9.4, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers, subject to Section 5.6. Any trustee ceasing to act shall,
nevertheless, retain a prior lien upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 5.6.
Upon acceptance of appointment by a successor trustee as provided in
this Section 5.10, the Issuer shall mail notice thereof by first-class mail to
the holders of Securities at their last addresses as they shall appear in the
Register. If the acceptance of appointment is substantially contemporaneous
with the resignation, then the notice called for by the preceding sentence may
be combined with the notice called for by Section 5.9. If the Issuer fails to
mail such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Issuer.
53
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE. 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 the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, PROVIDED that such
corporation shall be eligible under the provisions of Section 5.8, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have; PROVIDED, that the right to
adopt the certificate of authentication of any predecessor Trustee or to
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS.
SECTION 6.1 EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and (subject to
Sections 5.1 and 5.2) conclusive in favor of the Trustee and the Issuer, if made
in the manner provided in this Article.
SECTION 6.2 PROOF OF EXECUTION OF INSTRUMENTS AND
54
OF HOLDING OF SECURITIES; RECORD DATE. Subject to Sections 5.1 and 5.2, the
execution of any instrument by a Securityholder or his agent or proxy may be
proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Securities shall be proved by the Register or by a
certificate of the registrar thereof. The Issuer may set a record date for
purposes of determining the identity of holders of Securities entitled to vote
or consent to any action referred to in Section 6.1, which record date may be
set at any time or from time to time by notice to the Trustee, for any date or
dates (in the case of any adjournment or resolicitation) not more than 60 days
nor less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, only holders of
Securities of record on such record date shall be entitled to so vote or give
such consent or to withdraw such vote or consent.
SECTION 6.3 HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Register as the absolute
owner of such Security (whether or not such Security shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. All such payments
so made to any such person, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
SECTION 6.4 SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In
determining whether the holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities or by any person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuer or any other obligor
on the Securities shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, consent
or waiver only Securities which the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the
55
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Issuer or
any other obligor upon the Securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities. In case of a dispute as to such
right, the advice of counsel shall be full protection in respect of any decision
made by the Trustee in accordance with such advice. Upon request of the
Trustee, the Issuer shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Issuer
to be owned or held by or for the account of any of the above-described persons;
and, subject to Sections 5.1 and 5.2, the Trustee shall be entitled to accept
such Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are outstanding for the
purpose of any such determination.
SECTION 6.5 RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 6.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Securities specified in this Indenture in connection with such
action, any holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security. Except as aforesaid any
such action taken by the holder of any Security shall be conclusive and binding
upon such holder and upon all future holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the holders of the percentage in aggregate principal amount
of the Securities specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the holders of
all the Securities.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES.
SECTION 7.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee, subject
56
to Sections 5.1 and 5.2, may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities any property or assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Issuer pursuant to
Article Eight;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as its Board of Directors and the
Trustee shall consider to be for the protection of the holders of
Securities, and to make the occurrence, or the occurrence and continuance,
of a default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth;
PROVIDED, that in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the holders of a majority in aggregate principal amount
of the Securities to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Board of Directors may deem necessary or desirable and
which shall not adversely affect the interests of the holders of the
Securities; and
(e) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and to
provide for exchangeability of such Securities with
57
Securities issued hereunder in fully registered form, and to make all
appropriate changes for such purpose and to provide for adjustment of
conversion rights pursuant to Section 13.5 and 13.6.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee 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.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 7.2.
SECTION 7.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Article Six) of the holders of not
less than 50% in aggregate principal amount of the Securities at the time
outstanding, the Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Securities; PROVIDED, that no such supplemental
indenture shall (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable upon redemption thereof, or alter
the conversion provisions with respect to any Security in a manner materially
adverse to the Holder thereof or modify the subordination provisions hereof in a
manner materially adverse to the Holders or impair or affect the right of any
Securityholder to institute suit for the payment or conversion thereof, or
change the currency for payment of principal of, premium or interest on, any
Security, or materially and adversely affect the right to convert the Securities
in accordance herewith without the consent of the holder of each Security so
affected, PROVIDED, no consent of any Holder of any Security shall be necessary
under this Section 7.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Section 7.1(e) and Section 13.5 and 13.6 of
this Indenture or (b) reduce the aforesaid percentage of Securities, the consent
of the holders of which
58
is required for any such supplemental indenture or waiver, without the consent
of the holders of all Securities then outstanding.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors certified by the Secretary or an Assistant Secretary
of the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
and other documents, if any, required by Section 6.1 the Trustee shall, subject
to Sections 5.1 and 5.2, join with the Issuer in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first-class mail to the holders of Securities at
their addresses as they shall appear in the Register, setting forth in general
terms the substance of such supplemental indenture. Any failure of the Issuer
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 7.3 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the holders of Securities
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 7.4 DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject
to the provisions of Sections 5.1 and 5.2, may receive an Officers' Certificate
and an Opinion of Counsel
59
as conclusive evidence that any such supplemental indenture complies with the
applicable provisions of this Indenture and any conditions precedent to the
Supplemental Indenture have been satisfied.
SECTION 7.5 NOTATION ON SECURITIES IN RESPECT OF SUPPLEMENTAL
INDENTURES. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee as to any matter provided for by such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, upon the written request
of the Chairman of the Board of Directors or the President or any Vice President
of the Issuer, authenticated by the Trustee and delivered in exchange for the
Securities then outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
SECTION 8.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY
PROPERTY EXCEPT UNDER CERTAIN CONDITIONS. Nothing contained in this Indenture or
in any of the Securities shall prevent any consolidation of the Issuer with, or
merger of the Issuer into, any other corporation or corporations (whether or not
affiliated with the Issuer), or successive consolidations or mergers to which
the Issuer or its successor or successors shall be a party or parties, or shall
prevent any sale, lease or conveyance of the property of the Issuer as an
entirety or substantially as an entirety; provided, that, and the Issuer hereby
covenants and agrees, upon any such consolidation, merger, sale, lease or
conveyance, the due and punctual payment of the principal of and interest on all
the Securities, according to their tenor, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Issuer, shall be expressly assumed, by supplemental
indenture satisfactory in form to the Trustee, executed and delivered to the
Trustee, by the corporation formed by such consolidation, or into which the
Issuer shall have been merged, or which shall have acquired such property.
SECTION 8.2 SUCCESSOR CORPORATION SUBSTITUTED. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted
60
for the Issuer, with the same effect as if it had been named herein.
Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Issuer and delivered to the Trustee; and, upon the order of
such successor corporation, instead of the Issuer, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All of
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Issuer or any successor corporation which shall theretofore
have become such in the manner described in this Article shall be discharged
from all obligations and covenants under this Indenture and the Securities and
may be liquidated and dissolved.
SECTION 8.3 OPINION OF COUNSEL TO TRUSTEE. The Trustee, subject to
the provisions of Sections 5.1 and 5.2, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation or dissolution,
complies with the applicable provisions of this Indenture.
ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 9.1 SATISFACTION AND DISCHARGE OF INDENTURE. If at any time
(a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the
61
Securities outstanding hereunder, as and when the same shall have become due and
payable, or (b) the Issuer shall have delivered to the Trustee for cancellation
all Securities theretofore authenticated (other than any Securities which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.6) or (c) (i) all such securities not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption under arrangements satisfactory to the Trustee for the giving of
notice of redemption to Holders, and (ii) the Issuer shall have irrevocably
deposited or caused to be deposited with the Trustee as trust funds the entire
amount in cash or non-callable United States Government obligations (other than
moneys repaid by the Trustee or any paying agent to the Issuer in accordance
with Section 9.4) sufficient to pay at maturity or upon redemption all such
Securities not theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity as the case
may be, and if, in any such case, the Issuer shall also pay or cause to be paid
all other sums payable hereunder by the Issuer, then this Indenture shall cease
to be of further effect (except as to (i) rights of registration of transfer,
conversion and exchange, and the Issuer's right of optional redemption, (ii)
substitution of apparently mutilated, defaced, destroyed, lost or stolen
Securities, (iii) rights of holders to receive payments of principal thereof and
interest thereon, (iv) the rights, obligations and immunities of the Trustee
hereunder and (v) the rights of the Securityholders as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them), and the Trustee, on demand of the Issuer accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the Issuer,
shall execute proper instruments acknowledging such satisfaction of and
discharging this Indenture. The Issuer agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred and to compensate
the Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Securities.
SECTION 9.2 APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. Subject to Section 9.4, and to the subordination provisions of this
Indenture all moneys deposited with the Trustee pursuant to Section 9.1 shall be
held in trust and applied by it to the payment, either directly or through any
paying agent (including the Issuer acting as its own paying agent), to the
holders of the particular Securities for the payment or redemption of which
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such moneys have been deposited with the Trustee, of all sums due and to become
due thereon for principal and interest; but such money need not be segregated
from other funds except to the extent required by law.
SECTION 9.3 REPAYMENT OF MONEYS HELD BY 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 Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 9.4 RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT
UNCLAIMED FOR THREE YEARS. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or interest on any Security
and not applied but remaining unclaimed for three years after the date upon
which such principal or interest shall have become due and payable, shall, upon
the written request of the Issuer and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Issuer by the Trustee or such paying agent, and the holder of such
Security shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property laws, thereafter look only to the
Issuer 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.
ARTICLE TEN
MISCELLANEOUS PROVISIONS.
SECTION 10.1 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
ISSUER EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the holders thereof and as
part of the consideration for the issue of the Securities.
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SECTION 10.2 PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES
AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities, expressed
or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and their successors and the holders
of Senior Indebtedness and the holders of the Securities, any legal or equitable
right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and their successors and the holders of Senior
Indebtedness and the holders of the Securities.
SECTION 10.3 SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 10.4 NOTICES AND DEMANDS ON ISSUER, TRUSTEE AND
SECURITYHOLDERS. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities to or on the Issuer may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to SAFEGUARD SCIENTIFICS, INC., 800 The Safeguard Building,
435 Devon Park Drive, Wayne, PA 19087 Attention: Senior Vice President-
Finance. Any notice, direction, request or demand by the Issuer or any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each holder entitled thereto, at his
last address as it appears in the Security register. 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.
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In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 10.5 OFFICERS' CERTIFICATES AND OPINIONS OF COUNSEL;
STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent 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 have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) 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, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information with respect to which is in the possession of
the Issuer, upon the
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certificate, statement or opinion of or representations by an officer or
officers of the Issuer, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 10.6 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. If the
date of maturity of interest on or principal of the Securities or the date fixed
for redemption of any Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 10.7 CONFLICT OF ANY PROVISION OF INDENTURE WITH TRUST
INDENTURE ACT OF 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in this
Indenture by operation of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939 (an "incorporated provision"), such incorporated provision shall
control.
SECTION 10.8 NEW YORK LAW TO GOVERN. This Indenture and each
Security shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said State, except as may otherwise be required by mandatory provisions of law.
SECTION 10.9 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute
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but one and the same instrument.
SECTION 10.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES.
SECTION 11.1 RIGHT OF OPTIONAL REDEMPTION; PRICES. On and after
February 2, 1999 and prior to February 2, 2001, the Issuer at its option may
redeem all, or from time to time any part of, the Securities in integral
multiples of $1,000 upon payment of the optional redemption prices set forth in
the form of Security hereinabove recited, together with accrued interest to the
date fixed for redemption PROVIDED that for 20 Trading Days within any period of
30 consecutive Trading Days (including the last Trading Day of such period)
ending on the Trading Day immediately prior to the notice of redemption to the
Trustee, the Closing Price (for the purposes of this Section 11.1, as defined in
Section 13.6 hereof) of the Common Stock on the NYSE equals or exceeds 125% of
the then effective Conversion Price and further provided that all interest on
the Securities for all interest periods ending on or prior to the notice of
redemption has been paid in full or set aside for payment in full. In the case
of an optional redemption, the Issuer will provide the Trustee with the form of
notice of redemption, indicating the mailing date for such notice of redemption,
no less than fifteen days prior to the mailing date of a proposed notice of
optional redemption (unless a shorter period of time is agreed to by the
Trustee, for its convenience and in its sole discretion). On the mailing date
of the notice of redemption, the Issuer will certify to the Trustee that for 20
Trading Days within the 30 consecutive Trading Days (including the Trading Day
immediately prior to the notice of redemption) the Closing Price on the NYSE
equaled or exceeded 125% of the then effective Conversion Price and further
provided that all interest on the Securities for all interest periods ending on
or prior to the notice of redemption has been paid in full or set aside for
payment in full.
On or after February 2, 2001, the Issuer at its option may redeem all,
or from time to time any part of, the Securities in integral multiples of $1,000
upon payment of the optional redemption prices set forth in the form of Security
hereinabove recited, together with accrued interest to the date fixed for
redemption.
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SECTION 11.2 NOTICE OF REDEMPTION; PARTIAL REDEMPTIONS. Notice of
redemption to the holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the date fixed for
redemption to such holders of Securities at their last addresses as they shall
appear upon the Register. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives the notice. Failure to give notice by mail, or any defect
in the notice to the holder of any Security designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Security.
The notice of redemption to each such holder shall specify the date
fixed for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue and shall also specify the
Conversion Price then in effect and the date on which the right to convert such
Securities or the portions thereof to be redeemed will expire. In case any
Security is to be redeemed in part only, the notice of redemption to Holders
shall state the portion of the principal amount of each Security held by such
Holder to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption to Holders of Securities to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name of and at the expense of the Issuer.
At least one Business Day prior to the redemption date specified in
the notice of redemption to Holders given as provided in this Section, the
Issuer will deposit with the Trustee or with one or more paying agents (or, if
the Issuer is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 3.4) an amount of money sufficient to redeem on the
redemption date all the Securities so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If any Security called for
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redemption is converted pursuant hereto, any money deposited with the Trustee or
any paying agent or so segregated and held in trust for the redemption of such
Security shall be paid to the Issuer upon the Issuer's request, or, if then held
by the Issuer, shall be discharged from such trust. If less than all the
outstanding Securities are to be redeemed the Issuer will deliver to the Trustee
at least 70 days prior to the date fixed for redemption, unless a shorter period
of time is agreed to by the Trustee for its convenience and in its sole
discretion, an Officers' Certificate stating the aggregate principal amount of
Securities to be redeemed. If all the outstanding Securities are to be redeemed
the Issuer will deliver to the Trustee a notice of redemption no later than 15
days prior to the mailing date for such notice of redemption unless a shorter
period of time is agreed to by the Trustee for its convenience and in its sole
discretion.
If less than all the Securities are to be redeemed, the Trustee shall
select, either pro rata or in such other method as it shall deem fair and
equitable so long as such method is not proscribed by any securities exchange on
which the Securities are listed, Securities to be redeemed in whole or in part.
Securities may be redeemed in part in integral multiples of $1,000 only and in a
manner such that an individual Securityholder is not left with less than
$100,000 aggregate principal amount of Securities after such partial redemption.
The Trustee shall promptly notify the Issuer in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed. For all purposes of
this Indenture, unless the context otherwise requires, all provisions relating
to the redemption of Securities shall relate, in the case of any Security
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Security which has been or is to be redeemed. If any Security selected
for partial redemption is surrendered for conversion after such selection, the
converted portion of such Security shall be deemed to be taken from the portion
selected for redemption. Upon any redemption of less than all the Securities,
the Issuer and the Trustee may treat as outstanding Securities surrendered for
conversion during the period of 15 days next preceding the mailing of a notice
of redemption to Holders, and need not treat as outstanding any Security
authenticated and delivered during such period in exchange for the unconverted
portion of any Security converted in part during such period.
SECTION 11.3 PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice
of redemption to Holders has been given as above provided, the Securities or
portions of Securities
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specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price, together with
interest accrued to the date fixed for redemption, and on and after said date
(unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 5.5 and 9.4, such Securities shall
cease from and after the close of business on the Trading Day preceding the date
fixed for redemption to be convertible into Common Stock and to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Securities except the right to receive the
redemption price thereof and unpaid interest to the date fixed for redemption.
On presentation and surrender of such Securities at a place of payment specified
in said notice, said Securities or the specified portions thereof shall be paid
and redeemed by the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption; provided that any
semi-annual payment of interest becoming due on the date fixed for redemption
shall be payable to the holders of such Securities registered as such on the
relevant record date subject to the terms and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Security and such Security shall remain convertible into Common Stock
until the principal of such Security shall have been paid or duly provided for.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the holder thereof, at the expense of the Issuer, a new Security or
Securities, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 11.4 EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR
SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption to Holders may be given as being owned of record and beneficially
by, and not pledged or hypothecated by either (a) the Issuer or (b) an
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entity specifically identified in such written statement directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES.
SECTION 12.1 AGREEMENT TO SUBORDINATE. The Issuer covenants and
agrees, and each holder of Securities issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article; and each person holding any Security, whether
upon original issue or upon transfer, assignment or exchange thereof accepts and
agrees that the principal of and interest on all Securities issued hereunder
shall, to the extent and in the manner herein set forth, be subordinated and
subject in right to the prior payment in full of all Senior Indebtedness.
SECTION 12.2 PAYMENTS TO SECURITYHOLDERS. No payment on account of
principal of or interest on the Securities shall be made if at the time of such
payment or immediately after giving effect thereto (1) there shall exist a
default in any payment with respect to any Senior Indebtedness, or (2) there
shall have occurred an event of default (as defined in such Senior Indebtedness
or in the instrument under which the same is outstanding, other than a default
in the payment of amounts due thereon) with respect to any Senior Indebtedness
as to which any notice or cure periods shall have lapsed permitting the holders
thereof to accelerate the maturity thereof, and such event of default shall not
have been cured or waived or shall not have ceased to exist.
Upon (i) any acceleration of the principal amount due on the
Securities or (ii) any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution or winding-up or total or partial liquidation or arrangement or
reorganization of the Issuer, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due or to become due
upon all Senior Indebtedness shall first be paid in full, or payment thereof
provided for in accordance with its terms, before any payment is made on account
of the principal or interest on the indebtedness evidenced by the Securities,
and upon any such dissolution or winding-up or liquidation, arrangement or
reorganization any payment or distribution of assets of the Issuer of any kind
or character, whether in cash, property or
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securities, to which the holders of the Securities or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall be paid by
the Issuer or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, or by the holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness in accordance with its terms or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all Senior Indebtedness in full, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
indebtedness evidenced by the Securities or to the Trustee under this Indenture.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee under this Indenture or the holders of the Securities before all Senior
Indebtedness is paid in full or provision is made for such payment in accordance
with its terms, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of such Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of all Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Issuer as
reorganized or readjusted, or securities of the Issuer or any other corporation
provided for by a plan of arrangement, reorganization or readjustment, the
payment of which shares or other securities is subordinated (at least to the
extent provided in this Article with respect to the Securities) to the payment
of all Senior Indebtedness which may at the time be outstanding; PROVIDED, that
(i) the Senior Indebtedness is assumed by the new corporation, if any, resulting
from any such arrangement, reorganization or readjustment, and (ii) the rights
of the holders of the Senior
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Indebtedness are not, without the consent of such holders, altered by such
arrangement, reorganization or readjustment. The consolidation of the Issuer
with, or the merger of the Issuer into, another corporation or the liquidation
or dissolution of the Issuer 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 Article Five, except as provided therein. This
Section shall be subject to the further provisions of Section 12.5.
SECTION 12.3 SUBROGATION OF SECURITIES. Subject to the payment in
full of all Senior Indebtedness, the holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Issuer
applicable to the Senior Indebtedness until the principal of and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article, and no
payment over pursuant to the provisions of this Article to the holders of Senior
Indebtedness by holders of the Securities or the Trustee on their behalf shall,
as between the Issuer, its creditors other than holders of Senior Indebtedness
and the holders of the Securities, be deemed to be a payment by the Issuer to or
on account of the Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the Securityholders pursuant to
the subrogation provision of this Article, which would otherwise have been paid
to the holders of Senior Indebtedness, shall be deemed to be a payment by the
Issuer to or for the account of the Securities. 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 Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Issuer, its
creditors other than the holders of Senior Indebtedness, and the holders of the
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Securities, the obligation of the Issuer, which is absolute and unconditional,
to pay to the holders of the Securities the principal of and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Securities and creditors of the Issuer other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the holder
of any Security or the Trustee on his behalf 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 Issuer received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Issuer referred to
in this Article, the Trustee, subject to the provisions of Sections 5.1 and 5.2,
and the holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation, arrangement or reorganization proceedings
are pending, or a 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 Securities, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Issuer, 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 12.4 AUTHORIZATION BY SECURITYHOLDERS. Each holder of a
Security by his acceptance thereof authorizes the Trustee in his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee his attorney-in-fact for any
and all such purposes.
SECTION 12.5 NOTICE TO TRUSTEE. The Issuer shall give prompt written
notice to the Trustee and to any paying agent of any fact known to the Issuer
which would prohibit the making of any payment of moneys to or by the Trustee or
any paying agent in respect of the Securities pursuant to the provisions of this
Article. Regardless of anything to the contrary contained in this Article or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any Senior Indebtedness or of any default or event of default
with respect to any Senior Indebtedness or of any other facts which would
prohibit the making of any payment
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of moneys to or by the Trustee, unless and until the Trustee shall have received
notice in writing at its principal Corporate Trust Office to that effect signed
by an officer of the Issuer, or by a holder or agent of a holder of Senior
Indebtedness who shall have been certified by the Issuer or otherwise
established to the reasonable satisfaction of the Trustee to be such holder or
agent, or by the trustee under any indenture pursuant to which Senior
Indebtedness shall be outstanding, and, prior to the receipt of any such written
notice, the Trustee shall, subject to Sections 5.1 and 5.2, be entitled to
assume that no such facts exist; PROVIDED that if on a date three Business Days
prior to the date upon which by the terms hereof any such moneys shall become
payable for any purpose (including, without limitation, the payment of the
principal of, or interest on any Security) the Trustee shall not have received
with respect to such moneys the notice provided for in this Section, then,
regardless of anything herein to the contrary, 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 on or after such prior date.
Regardless of anything to the contrary herein, nothing shall prevent
(a) any payment by the Issuer or the Trustee to the Securityholders of amounts
in connection with a redemption of Securities if (i) notice of such redemption
has been given to Holders pursuant to Article Eleven prior to the receipt by the
Trustee of written notice as aforesaid, and (ii) such notice of redemption is
given not earlier than 60 days before the redemption date, or (b) any payment by
the Trustee to the Securityholders of amounts deposited with it pursuant to
Section 9.1.
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
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defer any payment to such person pending judicial determination as to the right
of such person to receive such payment.
SECTION 12.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee
and any agent of the Issuer or the Trustee shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it in its individual or any other capacity to the same
extent as any other holder of Senior Indebtedness and nothing in this Indenture
shall deprive the Trustee or any such agent, of any of its rights as such
holder. Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 5.6.
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 be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Sections 5.1 and 5.2, the Trustee shall not be liable to any
holder of Senior Indebtedness if it shall pay over or deliver to holders of
Securities, the Issuer or any other person moneys or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
SECTION 12.7 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 Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer 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.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES.
SECTION 13.1 CONVERSION PRIVILEGE. Subject to and upon compliance
with the provisions of this Article, at the option of the holder thereof, any
Security may, at any time until and including, but not after the close of
business on the Trading Day preceding February 1, 2006, or in case such
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Security or some portion thereof shall be called for redemption prior to such
date, then, with respect to such Security or portion thereof as is so called,
until and including, but (if no default is made in making due provision for the
payment of the redemption price) not after, the close of business on, the
Trading Day preceding the date fixed for redemption, be converted, in whole, or
in part in integral multiples of $1,000 principal amount, at 100% of the
principal amount of such Security (or portion thereof), into fully paid and non-
assessable shares of Common Stock issuable upon conversion of the Securities, at
the Conversion Price in effect at the Date of Conversion (as hereinafter
defined).
SECTION 13.2 EXERCISE OF CONVERSION PRIVILEGE. In order to exercise
the conversion privilege, the holder of any Security to be converted shall
surrender such Security to the Issuer at any time during usual business hours at
its office or agency maintained for the purpose as provided in this Indenture,
accompanied by a fully executed written notice, in substantially the form set
forth on the reverse of the Security (the "Conversion Notice"), that the holder
elects to convert such Security or a stated portion thereof constituting an
integral multiple of $1,000 principal amount, and, if such Security is
surrendered for conversion during the period between the close of business on
January 15 or July 15 in any year and the opening of business on the following
February 1 or August 1 and has not been called for redemption on a redemption
date within such period (or on such February 1 or August 1), accompanied also by
payment of an amount equal to the interest payable on such February 1 or August
1 on the principal amount of the Security being surrendered for conversion.
Such notice shall also state the name or names (with address) in which the
certificate or certificates for shares of Common Stock shall be issued.
Securities surrendered for conversion shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer duly executed by, the
holder or his attorney duly authorized in writing. Where the Securities to be
converted are represented by a Global Security, the holder shall also deliver a
Conversion Notice to the Depositary. As promptly as practicable after the
receipt of such notice and the surrender of such Security as aforesaid, the
Issuer shall, subject to the provisions of Section 13.8, issue and deliver at
such office or agency to such holder, or on his written order, a certificate or
certificates for the number of full shares of Common Stock issuable on such
conversion of Securities in accordance with the provisions of this Article and
cash, as provided in Section 13.3, in respect of any fraction of a share of
Common Stock otherwise issuable upon
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such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date (herein called the "Date
of Conversion") on which such notice shall have been received by the Issuer and
such Security shall have been surrendered as aforesaid, and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on the Date of Conversion the holder or holders of record of the shares
represented thereby; PROVIDED, HOWEVER, that in the event that any such
surrender takes place on a date when the stock transfer books of the Issuer
shall be closed, the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record thereof for all
purposes at the opening of business on the next succeeding day on which such
stock transfer books are open but such conversion shall nevertheless be at the
Conversion Price in effect at the close of business on the date when such
Security shall have been so surrendered with the conversion notice. In the case
of conversion of a portion, but less than all, of a Security, the Issuer shall
execute, and the Trustee shall authenticate and deliver to the holder thereof,
at the expense of the Issuer, a Security or Securities in the aggregate
principal amount of the unconverted portion of the Security surrendered. Except
as otherwise expressly provided in this Indenture, no payment or adjustment
shall be made for interest accrued on any Security (or portion thereof)
converted or for dividends or distributions on any Common Stock issued upon
conversion of any Security.
SECTION 13.3 FRACTIONAL INTERESTS. No fractions of shares or scrip
representing fractions of shares shall be issued upon conversion of Securities.
If more than one Security shall be surrendered for conversion at one time by the
same holder, the number of full shares which shall be issuable upon conversion
thereof shall be computed on the basis of the aggregate principal amount of the
Securities so surrendered. If any fraction of a share of Common Stock would,
except for the provisions of this Section, be issuable on the conversion of any
Security or Securities, the Issuer shall make payment in lieu thereof in an
amount of United States dollars equal to the value of such fraction computed on
the basis of the Closing Price of the Common Stock on the last Business Day
prior to the Date of Conversion.
SECTION 13.4 CONVERSION PRICE. The conversion price (as adjusted
from time to time, the "Conversion Price") per Common Stock issuable upon
conversion of the Securities
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shall initially be $57.97 per share of Common Stock.
SECTION 13.5 ADJUSTMENT OF CONVERSION PRICE.
(a) The Conversion Price shall be adjusted from time to time as follows:
(i) In case the Issuer shall pay or make a dividend or other
distribution on Common Stock in shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction the
numerator of which 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 of which 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 day following the
date fixed for such determination. For the purposes of this
subparagraph (i), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Issuer (except to the extent such dividend or distribution is being
made with respect to such shares) but shall include shares issuable in
respect of scrip certificates issues in lieu of fractions of shares of
Common Stock.
(ii) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, then 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 the outstanding
shares of Common Stock shall be combined into a smaller amount of
shares of Common Stock, then the Conversion Price in effect at the
opening of business on the day following the day upon which such
combination becomes effective shall be 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.
(iii) In case the Issuer shall issue rights or warrants to all or
substantially all holders of Common Stock entitling them (for a period
expiring within 45 days after the record date fixed for a distribution
of such rights or warrants) to subscribe for or purchase shares
79
of Common Stock at a price per share less than the Current Market
Price (as hereinafter defined) per share (determined as provided in
subparagraph (vii) below) of Common Stock on the date fixed for the
determination of shareholders entitled to receive such rights or
warrants (other than pursuant to a dividend reinvestment plan), then
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 the numerator of which
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number
of shares of Common Stock which the aggregate of the offering price of
the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market Price and the
denominator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination plus
the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this subparagraph (iii), the
number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Issuer but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Issuer agrees not to issue
any rights or warrants in respect of shares of Common Stock held in
the treasury of the Issuer. To the extent that shares of Common Stock
are not delivered after the expiration of such rights or warrants, the
Conversion Price shall be readjusted to the Conversion Price which
would then be in effect had the adjustments made in respect of the
issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered.
(iv) Subject to the second paragraph of this subparagraph (iv), in
case the Issuer shall, by dividend or otherwise, distribute to all or
substantially all holders of Common Stock (A) shares of capital stock
of the Issuer (other than Common Stock), (B) evidence of indebtedness
of the Issuer and/or (C) other assets (including securities, but
excluding (1) any rights or warrants referred to in subparagraph (iii)
above, (2) any rights or warrants to obtain capital stock of a company
other than the Issuer (including any rights offerings of the Issuer
with respect to capital stock of companies in which the Issuer
80
has an investment (a "Rights Offering")), (3) dividends or
distributions in connection with the liquidation, dissolution or
winding-up of the Issuer, (4) dividends payable solely in cash that
may from time to time be fixed by the Board of Directors of the Issuer
and (5) dividends or distributions referred to in subparagraph (i)
above), then in each case (unless the Issuer makes the election
referred to in the next sentence) 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 such record date by a fraction the numerator of
which shall be the Current Market Price per share (determined as
provided in subparagraph (vii) below) of the Common Stock on such
record date (the "Reference Date") less the then fair market value on
the Reference Date (as determined in good faith by the Board of
Directors of the Issuer, whose determination shall be the conclusive
and shall be described in a statement filed with the Depositary and
the Trustee) of the portion of the shares of capital stock of the
Issuer, evidences of indebtedness or other assets so distributed (and
for which an adjustment to the Conversion Price has not been made
previously pursuant to the terms this Article 13) applicable 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 Reference Date. However, the Issuer may elect, in its
sole discretion, in lieu of the foregoing adjustment, to make adequate
provision so that each holder of Securities shall have the right to
receive upon conversion thereof the amount and kind of shares of
capital stock, evidences of indebtedness or other assets such holder
would have received had such holder converted such shares on such
record date. If the Board of Directors of the Issuer determines the
fair market value of any distribution for purposes of this
subparagraph (iv) by reference to the actual or when issued trading
market for any securities (including shares of capital stock or
evidence of indebtedness of the Issuer) comprising a distribution of
securities, it must in doing so consider the price in such market over
the period used in computing the Current Market Price of the Common
Stock.
For purposes of this paragraph (iv), any dividend or distribution that
includes both (x) any of the items described in clauses (A), (B) or
(C) of the first paragraph of this subparagraph (iv) and (y) Common
Stock
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or rights or warrants to subscribe for or purchase Common Stock of the
type referred to in subparagraph (iii) shall be deemed to be (1) a
dividend or distribution of shares of capital stock of the Issuer
(other than Common Stock), evidences of indebtedness of the Issuer or
other assets of the type referred to in clause (C) of the first
paragraph of this subparagraph (iv) (making any Conversion Price
reduction required by this subparagraph (iv)) immediately followed by
(2) a dividend or distribution of such Common Stock or rights or
warrants to purchase Common Stock of the type referred to in
subparagraph (iii) (making any further Conversion Price reduction
required by subparagraph (i) or (iii) of this Section 13.5(a)), except
(A) the Reference Date of such dividend or distribution as defined in
this subparagraph (iv) shall be substituted as "the date fixed for the
determination of shareholders entitled to receive such rights or
warrants" and "the date fixed for such determination" within the
meaning of subparagraphs (i) and (iii) of this Section 13.5(a) and (B)
any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of subparagraph (i)
of this Section 13.5(a).
The occurrence of a distribution or the occurrence of any other event
as a result of which holders of Securities converting such notes into
Common Stock hereunder will not be entitled to receive rights issued
pursuant to any shareholder protective rights agreement now or
hereafter in effect (the "Other Rights") in the same amount and manner
as if such holders had converted such shares immediately prior to the
occurrence of such distribution or other event shall be deemed a
distribution of Other Rights for the purposes of conversion
adjustments pursuant to this subparagraph (iv). In lieu of making any
adjustment to the Conversion Price under this subparagraph (iv) as a
result of such a distribution of Other Rights, the Issuer may elect,
in its sole discretion, to provide that Other Rights shall be issuable
in the same amount and manner upon conversion of the Securities
without regard to whether the shares of Common Stock issuable upon
conversion of the Securities were issued before or after such
distribution or other event.
(v) In case the Issuer shall, by dividend or otherwise, at any time
distribute cash to all or substantially all holders of Common Stock,
excluding (A) any cash dividends on Common Stock to the extent that
the aggregate cash
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dividends per share of Common Stock in any consecutive 12-month period
do not exceed the greater of (x) the amount per share of Common Stock
of the cash dividends paid on the Common Stock in the immediately
preceding 12-month period, to the extent that such dividends for the
immediately preceding 12-month period did not require an adjustment to
the Conversion Price pursuant to this subparagraph (v) (as adjusted to
reflect subdivisions or combinations of the Common Stock) and (y) 15%
of the average of the daily Closing Prices (as hereinafter defined) of
the Common Stock for the ten consecutive Trading Days immediately
prior to the date of declaration of such dividend and (B) any dividend
or distribution in connection with the liquidation, dissolution or
winding-up of the Issuer, whether voluntary or involuntary, or any
redemption of the Rights or any Other Rights; provided, however, that
no adjustment shall be made pursuant to this subparagraph (v) if such
distribution would otherwise constitute a Fundamental Change (as
hereinafter defined) and be reflected in a resulting adjustment to the
Conversion Price as provided in this Article 13) then, in each case
(unless the Issuer makes the election referred to in the proviso
following this clause), the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the
Conversion Price in effect at the close of business on such record
date by a fraction the numerator of which shall be the Closing Price
of a share of Common Stock on such record date less the amount of cash
so distributed (to the extent not excluded as provided above)
applicable to one share of Common Stock, and the denominator shall be
the Closing Price of a share of Common Stock, such reduction to become
effective immediately prior to the opening of business on the day
following such record date; provided, however, that the Issuer may
elect, in its sole discretion, in lieu of the foregoing adjustment, to
make adequate provision so that each holder of Securities shall
thereafter have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each
Security on such record date. If any adjustment is required to be
made as set forth in this subparagraph (v) as a result of a
distribution which is a dividend described in clause (A) of this
subparagraph (v), such adjustment will be based upon the amount by
which such distribution exceeds the amount of the dividend permitted
to be excluded pursuant to such clause (A) of this subparagraph (v).
If an adjustment is required to be made pursuant to this subparagraph
(v) as a result of a distribution which is not such a dividend, such
adjustment would be based upon
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the full amount of such distribution.
(vi) In case of the consummation of a tender or exchange offer (other
than an odd-lot tender offer) made by the Issuer or any subsidiary of
the Issuer for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined
in good faith by the Board of Directors of the Issuer, whose
determination shall be conclusive and shall be described in a
resolution of such Board) of any other consideration included in such
payment per share of Common Stock at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as amended) exceed by more than 10%, with any smaller
excess being disregarded in computing the adjustment to the Conversion
Price provided in this subparagraph (vi), the first reported sale
price per share of Common Stock on the Trading Day next succeeding the
Expiration Time, then the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by
a fraction the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
on the Expiration Time multiplied by the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares
of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the first reported sale price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction
to become effective immediately prior to the opening of business on
the day following the Expiration Time.
(vii) For the purpose of any computation under this Article 13,
the "Current Market Price per share" of Common Stock on any day shall
be deemed to be the average of the daily Closing Prices (as
hereinafter defined) per share of Common Stock for the ten consecutive
Trading Days prior to and including the date in question; provided,
however, that (1) if the "ex" date (as hereinafter defined) for any
event (other than the
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issuance, distribution or Fundamental Change requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to this Article 13 (the "Other Event") occurs during such ten
consecutive Trading Days and prior to the "ex" date for the issuance,
distribution or Fundamental Change requiring such computation (the
"Current Event"), the Closing Price for each Trading Day prior to the
"ex" date for such Other Event shall be adjusted by multiplying such
Closing Price by the same fraction by which the Conversion Price is so
required to be adjusted as a result of such Other Event, (2) if the
"ex" date for any Other Event occurs on or after the "ex" date for the
Current Event and on or prior to the date in question, the Closing
Price for each Trading Day on and after the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so
required to be adjusted as a result of such Other Event (provided that
in the event that such fraction is required to be determined at a date
subsequent to the date in question and with reference to events taking
place subsequent to the date in question, the Board of Directors of
the Issuer or, to the extent permitted by applicable law, a duly
authorized committee thereof, whose determination shall be conclusive
and described in a resolution of the Board of Directors of the Issuer
or such duly authorized committee thereof, as the case may be, shall
in good faith estimate such fraction based on assumptions it deems
reasonable regarding such events taking place subsequent to the date
in question, and such estimated fraction shall be used for purposes of
such adjustment until such time as the actual fraction by which the
Conversion Price is so required to be adjusted as a result of such
Other Event is determined), and (3) if the "ex" date for the Current
Event is on or prior to the date in question, after taking into
account any adjustment required pursuant to clause (1) or (2) of this
proviso, the Closing Price for each Trading Day on or after such "ex"
date shall be adjusted by adding thereto the amount of any cash and
the fair market value (as determined in good faith by the Board of
Directors of the Issuer or, to the extent permitted by applicable law,
a duly authorized committee thereof in a manner consistent with any
determination of such value for purposes of this Article 13, whose
determination shall be conclusive and described in a resolution of the
Board of Directors of the Issuer or such duly authorized committee
thereof, as the case may be) of the shares of capital stock, evidences
of indebtedness or other assets being distributed applicable to one
share of Common Stock as of
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the close of business on the day before such "ex" date. For purposes
of this subparagraph (vii), the term "ex" date, (1) when used with
respect to any issuance, distribution or Fundamental Change, means the
first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the Closing
Price was obtained without the right to receive such issuance, such
distribution or the cash, securities, property or other assets
distributable in such Fundamental Change to holders of the Common
Stock, (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the Common Stock
trades regular way on such exchange or in such market after the time
at which such subdivision or combination becomes effective and (3)
when used with respect to any tender or exchange offer means the first
date on which the Common Stock trades regular way on such exchange or
in such market after the Expiration Time of such offer.
(viii) No adjustment in the Conversion Price shall be required
pursuant to this Section 13.5(a) unless the adjustment would require a
change of at least 1% of such price; provided, however, that any
adjustments which by reason of this subparagraph (viii) are not
required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations shall be made to the
nearest cent (with .005 being rounded upward) or to the nearest
1/100th of a share (with .005 of a share being rounded upward), as the
case may be. Notwithstanding anything to the contrary in this Article
13, the Issuer from time to time may, to the extent permitted by law,
reduce the Conversion Price by any amount for any period of at least
20 Business Days, in which case the Issuer shall give at least 15
days' notice of such reduction to the holders of Securities and the
Trustee. In addition, the Issuer may, at its option, make such
reductions in the Conversion Price in addition to those set forth in
this Article 13, 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.
(ix) In any case in which this Article 13 provides that an adjustment
shall become effective immediately after a record date for an event,
the Issuer may defer until the occurrence of such event (A) issuing to
the holder of any
86
Securities converted after such record date and before the occurrence
of such event the additional shares of Common Stock issuable upon such
conversion by reason of the adjustment required by such event over and
above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount in
cash in lieu of any fractional shares pursuant to this Article 13.
(x) For purposes of this Article 13, "Common Stock" includes any
stock of any class of the Issuer 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 Issuer and
which is not subject to redemption by the Issuer. However, subject to
the provisions of this Article 13, shares issuable on conversion of
Securities shall include only shares of the class designated as the
Issuer Common Stock on the date of the initial issuance of Securities
by the Issuer or shares of any class or classes resulting from any
reclassification or reclassification 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 Issuer and which are not subject to redemption by the Issuer;
provided, however, 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.
(b) Whenever the Conversion Price is adjusted as provided, in this Article
8, the Issuer shall promptly (i) file with the Trustee and each conversion
agent an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring
such adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment, and (ii) mail or cause to be mailed a
notice of such adjustment to each holder of Securities at his address as
the same appears on the Register.
SECTION 13.6 ADJUSTMENT OF CONVERSION PRICE - FUNDAMENTAL CHANGE.
(a) In the event that the Issuer shall be a party to any transaction or series
of transactions constituting a Fundamental Change, including, without
limitation, (i) any recapitalization or reclassification of shares of Common
Stock (other than a change in the par value
87
as a result of a subdivision or combination of the Common Stock), (ii) any
consolidation of the Issuer with, or merger of the Issuer into, any other
corporation or any merger of another corporation into the Issuer as a result of
which holders of Common Stock shall be entitled to receive securities or other
property or assets (including cash) with respect to or in exchange for Common
Stock (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock),
(iii) any sale or transfer of all or substantially all of the assets of the
Issuer, or (iv) any compulsory share exchange, pursuant to any of which the
holders of Common Stock shall be entitled to receive other securities, cash or
other property, then appropriate provision shall be made as part of the terms of
such transaction or series of transactions so that the holder of each Security
then outstanding shall have the right thereafter to convert such Security only
into (A) in the case of a Non-Stock Fundamental Change (as hereinafter defined),
the kind and amount of the securities, cash and other property that would have
been receivable upon such recapitalization, reclassification, consolidation,
merger, sale, transfer or note exchange by a holder of the number of shares of
Common Stock into which such Security might have been converted immediately
prior to such recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after giving effect to any adjustment in the
Conversion Price required by the provisions which follow in Section 13.6(c), and
(B) in the case of a Common Stock Fundamental Change (as hereinafter defined),
common stock of the kind received by holders of Common Stock as a result of such
Common Stock Fundamental Change in an amount determined pursuant to the
provisions which follow in Section 13.6(c). The company formed by such
consolidation or resulting from such merger or which acquires such assets or
which acquires the Common Stock, as the case may be, shall enter into a
supplemental indenture with the Trustee, satisfactory in form to the Trustee,
the provisions of which 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 13. The
above provisions shall similarly apply to successive recapitalizations,
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article 13 to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately following such
Fundamental Change as described below in Section 13.6(c). In addition, in the
event
88
of a Common Stock Fundamental Change, each Security shall be convertible solely
into common stock of the kind received by holders of Common Stock as the result
of such Common Stock Fundamental Change as more specifically provided below in
Section 13.6(c).
(c) For purposes of calculating any adjustment to be made pursuant to this
Article 13 in the event of a Fundamental Change, immediately following such
Fundamental Change (and for such purposes a Fundamental Change shall be deemed
to occur on the earlier of (a) the occurrence of such Fundamental Change and (b)
the date, if any, fixed for determination of shareholders entitled to receive
the cash, securities, property or other assets distributable in such Fundamental
Change to holders of the Common Stock);
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price per share of Common Stock shall be the lower of (A)
the Conversion Price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other adjustments
effected pursuant to this Article 13, and (B) the product of (1) the
greater of the Applicable Price (as hereinafter defined) or the then
applicable Reference Market Price (as hereinafter defined) and (2) a
fraction the numerator of which shall be $100 and the denominator of
which shall be the amount set forth below (based on the date on which
such Non-Stock Fundamental Change occurs). For the twelve month
period beginning February 2:
Year Denominator
---- -----------
1996 106.00
1997 105.33
1998 104.67
1999 104.00
2000 103.33
2001 102.67
2002 102.00
2003 101.33
2004 100.67
2005 100.00; and
(ii) in case of a Common Stock Fundamental Change, the Conversion
Price per share of Common Stock shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other adjustments effected pursuant to this
Article 13, multiplied by a fraction, the numerator of
89
which is the Purchaser Stock Price (as hereinafter defined) and the
denominator of which is the Applicable Price); provided, however, that
in the event of a Common Stock Fundamental Change in which (A) 100% of
the value of the consideration received by a holder of Common Stock is
common stock of the successor, acquiror or other third party (and
cash, if any, paid with respect to any fractional interests in such
common stock resulting from such Common Stock Fundamental Change) and
(B) all of the Common Stock shall have been exchanged for, converted
into or acquired for common stock (and cash, if any, with respect to
fractional interests) of the successor, acquiror or other third party,
the Conversion Price per share of Common Stock immediately following
such Common Stock Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change
multiplied by a fraction, the numerator of which is one (1) and the
denominator of which is the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one
share of Common Stock as a result of such Common Stock Fundamental
Change.
(d) The following definitions shall apply to terms used in this
Article 13:
(i) "Applicable Price" shall mean (A) in the event of a Non-
Stock Fundamental Change in which the holders of Common Stock receive
only cash, the amount of cash receivable by a holder of one share of
Common Stock and (B) in the event of any other Fundamental Change, the
average of the Closing Prices for one share of Common Stock during the
ten Trading Days immediately prior to the record date for the
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such
Fundamental Change or, if there is no such record date, prior to the
date upon which the holders of Common Stock shall have the right to
receive such cash, securities, property or other assets.
(ii) "Closing Price" with respect to any securities on any day
shall mean the closing sale price, regular way, on such day or, in
case no such sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the New
York Stock Exchange or, if such security is not listed or admitted to
trading on such Exchange, on the principal national securities
exchange or quotation system on which such security is quoted or
listed or admitted to trading
90
or, if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing
bid and asked prices of such security on the over-the-counter market
on the date in question as reported by the National Quotation Bureau
Incorporated, or a similarly generally accepted reporting service or,
if not so available, in such manner as furnished by any New York Stock
Exchange member firm selected from time to time by the Board of
Directors of the Issuer for that purpose or a price determined in good
faith by the Board of Directors of the Issuer.
(iii) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50% of the value (as determined
in good faith by the Board of Directors of the Issuer) of the
consideration received by the holders of Common Stock pursuant to such
transactions consists of shares of common stock that, for the ten
consecutive Trading Days immediately prior to such Fundamental Change,
has been admitted for listing or admitted for listing subject to
notice of issuance on a national securities exchange or quoted on the
Nasdaq National Market; provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (A) the
Issuer continues to exist after the occurrence of such Fundamental
Change and the outstanding Securities continue to exist as outstanding
Securities, or (B) the outstanding Securities continue to exist as
Securities and are convertible into common stock of the successor to
the Issuer.
(iv) "Fundamental Change" shall mean the occurrence of any
transaction or event or series of transactions or events pursuant to
which all or substantially all of the Common Stock shall be exchanged
for, converted into, acquired for or constitutes solely the right to
receive cash, securities, property or other assets (whether by means
of an exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or otherwise);
provided, however, in the case of a plan involving more than one such
transaction or event, for purposes of adjustment of the Conversion
Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock has been exchanged for,
converted into, or acquired for or constitutes solely the right to
receive cash, securities, property or other assets, but the adjustment
shall be based upon the consideration which the holders of Common
Stock received in such transaction or event as a result of which more
than 50% of the Common Stock shall have
91
been exchanged for, converted into, or acquired for or shall
constitute solely the right to receive cash, securities, property or
other assets; provided, further, that such term does not include any
transaction or event in which the Issuer and/or any of its
subsidiaries are the issuers of all the cash, securities, property or
other assets exchanged, acquired or otherwise issued in such
transaction or event.
(v) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the Closing Prices for
one share of the common stock received by holders of Common Stock in
such Common Stock Fundamental Change during the ten Trading Days
immediately prior to the record date for the determination of the
holders of Common Stock entitled to receive such common stock or, if
there is no such record date, prior to the date upon which the holders
of Common Stock shall have the right to receive such common stock.
(vii) "Reference Market Price" shall initially mean $30.92
(which is an amount equal to 66-2/3% of the last reported sale price
for the Common Stock on the New York Stock Exchange on January 31,
1996) and, in the event of any adjustment to the Conversion Price
other than as a result of a Fundamental Change, the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such
adjustment shall always be the same as the ratio of $30.92 to the
initial Conversion Price set forth in this Article 13.
(e) In determining the amount and type of consideration received by a
holder of Common Stock in the event of a Fundamental Change, consideration
received by a holder of Common Stock pursuant to a statutory right of appraisal
will be disregarded.
SECTION 13.7 NOTICE OF CERTAIN EVENTS. In case:
(i) the Issuer shall declare a dividend (or any other
distribution) on Common Stock that would cause an adjustment to the
Conversion Price of the Securities pursuant to the terms of any of the
subparagraphs above (including such an adjustment that would occur but
for the terms of the first
92
sentence of Section 13.5(a)(viii) above); or
(ii) the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock or combined into a
smaller number of shares of Common Stock; or
(iii) the Issuer shall authorize the granting to the holders of
Common Stock generally of rights or warrants (for a period expiring
within 45 days after the record date fixed for a distribution of such
rights and warrants) to subscribe for or purchase any shares of the
Issuer's capital stock or other capital stock of any class or of any
other rights (including any Rights Offerings); or
(iv) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding shares of Common Stock),
or of any consolidation, merger or share exchange to which the Issuer
is a party and for which approval of any shareholders of the Issuer is
required, or of the sale or transfer of all or substantially all of
the assets of the Issuer or a compulsory share exchange; or
(v) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Issuer;
then the Issuer shall cause to be filed with the Trustee, and shall cause to be
mailed to all holders of Securities at each such holder's last address as the
same appears on the Register, at least 20 days prior to the applicable record or
effective date hereinafter specified (except with respect to a Rights Offering,
in which case such filing and mailing must take place at least 10 days prior to
the applicable record date), a notice stating (A) 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 (B) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer,
93
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, share
exchange, sale, transfer, dissolution, liquidation or winding-up. Neither the
failure to give such notice nor any defect therein shall affect the legality or
validity of the proceedings described in clauses (i) through (v) above.
SECTION 13.8 TAXES ON CONVERSION. The Issuer will pay any and all
documentary, stamp or similar taxes payable to the United States of America or
any political subdivision or taxing authority thereof or therein in respect of
the issue or delivery of shares of Common Stock on conversion of Securities
pursuant thereto; PROVIDED, HOWEVER, that the Issuer shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock in a name other than that of the
holder of the Securities to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Issuer the amount of any such tax or has established, to the satisfaction of
the Issuer, that such tax has been paid. Neither the Issuer nor the Trustee
extends any protection with respect to any other taxes imposed in connection
with conversion of Securities.
SECTION 13.9 ISSUER TO PROVIDE STOCK. The Issuer shall reserve, free
from pre-emptive rights, out of its authorized but unissued shares, sufficient
shares to provide for the conversion of the Securities from time to time as such
Securities are presented for conversion, provided, that nothing contained herein
shall be construed to preclude the Issuer from satisfying its obligations in
respect of the conversion of Securities by delivery of repurchased shares of
Common Stock which are held in the treasury of the Issuer.
If any shares of Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Issuer covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be, PROVIDED, HOWEVER, that nothing in
this Section shall be deemed to affect in any way the obligations of the Issuer
to convert Securities into Common Stock as provided in this Article.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Common Stock, the
Issuer will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Issuer may validly and legally issue fully paid and
non-assessable shares of Common Stock at
94
such adjusted Conversion Price.
The Issuer covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and non-
assessable by the Issuer and free of pre-emptive rights.
SECTION 13.10 DISCLAIMER OF RESPONSIBILITY FOR CERTAIN MATTERS.
Neither the Trustee nor any agent of the Trustee shall at any time be under any
duty or responsibility to any holder of Securities to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the Officers' Certificate referred to in Section 13.5(c), 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. Neither the Trustee nor any agent
of the Trustee shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any agent of the
Trustee shall be responsible for any failure of the Issuer to issue, register
the transfer of or deliver any shares of Common Stock or stock certificates or
other securities or property upon the surrender of any Security for the purpose
of conversion or, subject to Sections 5.1 and 5.2, to comply with any of the
covenants of the Issuer contained in this Article.
SECTION 13.11 RETURN OF FUNDS DEPOSITED FOR REDEMPTION OF CONVERTED
SECURITIES. Any funds which at any time shall have been deposited by the Issuer
or on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as provided in this Article, shall after such conversion be repaid to the Issuer
by the Trustee or such other paying agent.
95
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 February 1, 1996.
SAFEGUARD SCIENTIFICS, INC.
By /s/ Gerald M. Wilk
---------------------------
Title: Senior Vice President -
Finance
Attest:
By /s/ Alice G. Burt
----------------------
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
By /s/ Alfia Monastra
----------------------------
Title: Assistant Vice President
Attest:
By /s/ Frank J. Gillhaus
----------------------
EXHIBIT A
Form of Letter to be Delivered by Institutional
Accredited Investors
Safeguard Scientifics, Inc.
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
J.P. Morgan Securities Inc.
60 Wall Street
New York, NY 10260
Ladies and Gentlemen:
We are delivering this letter in connection with an offering of 6%
Convertible Subordinated Notes due 2006 (the "Notes"), of Safeguard Scientifics,
Inc. (the "Company") which are convertible into shares of the Company's Common
Stock, $0.10 par value (the "Common Stock"), all as described in the Offering
Memorandum (the "Offering Memorandum") relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under
the Securities Act (an "Institutional Accredited Investor");
(ii) (A) any purchase of Notes by us will be for our own account or
for the account of one or more other Institutional Accredited Investors or
as fiduciary for the account of one or more trusts, each of which is an
"accredited investor" within the meaning of Rule 501(a)(7) under the
Securities Act and for each of which we exercise sole investment discretion
or (B) we are a "bank," within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other institution
described in Section 3(a)(5)(A) of the Securities Act that is acquiring
Notes as fiduciary for the account of one or more institutions for which we
exercise sole investment discretion;
(iii) in the event that we purchase any Notes, we will acquire
Notes having a minimum principal amount of not less than $100,000 for our
own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Notes;
(v) we are not acquiring Notes with a view to distribute thereof or
with any present intention of offering or selling Notes or the Common Stock
issuable upon conversion thereof, except as permitted below; provided that
the disposition of our property and property of any accounts for which we
are acting as fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the shares of Common Stock issuable upon
conversion thereof have not been and will not be registered under the Securities
Act. We agree, on our own behalf and on behalf of each account for which we
acquire any Notes, that if in the future we decide to resell or otherwise
transfer such Notes or the Common Stock issuable upon conversion thereof, such
Notes or Common Stock may be resold or otherwise transferred only (i) to the
Company or any subsidiary thereof, or (ii) inside the United States to a person
who is a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, or (iii)
inside the United States to an Institutional Accredited Investor that, prior to
such transfer, furnishes to the transfer agent or registrar for such securities
a signed letter in the form hereof, or (iv) outside the United States in a
transaction meeting the requirements of Rule 904 under the Securities Act, or
(v) pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if applicable), and (vi) in each case, in accordance with any
applicable securities laws of any
State of the United States or any other applicable jurisdiction and in
accordance with the legends set forth on the Notes. We further agree to provide
any person purchasing any of the Notes or the Common Stock issuable upon
conversion thereof from us a notice advising such purchaser that resales of such
securities are restricted as stated herein. We understand that the registrar
and transfer agent for the Notes and the Common Stock will not be required to
accept for registration of transfer any Notes or any shares of Common Stock
issued upon conversion of the Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Notes and any shares of
Common Stock issued upon conversion of the Notes will be in the form of
definitive physical certificates and that such certificates will bear a legend
reflecting the substance of this paragraph.
We acknowledge that the Company, others and you will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(Name of Purchaser)
By:
Name:
Title:
Address:
A-3
EXHIBIT B
[FORM OF CERTIFICATE OF TRANSFER FOR SECURITIES]
In connection with any transfer of this Security occurring prior to
the earlier of (i) the date which is three years after the issuance of this
Security (or any predecessor Security) or (ii) the date after which the Issuer
instructs the Trustee to remove the restricted legend from the Security (or
predecessor Security) the undersigned confirms that:
TRANSFEROR CERTIFICATIONS
1. APPLICABLE EXEMPTION [check one]
[ ] (a) This Security is being transferred by the undersigned to a transferee
that is, or that the undersigned reasonably believes to be, a
qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended) pursuant to and in accordance with
the exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder. (this paragraph must be
indicated by any transferee who wishes to hold its Security in the
Rule 144A Global Note held by the nominee of the Depositary.
OR
[ ] (b) This Security is being transferred by the undersigned to a transferee
that is an institutional "accredited investor" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements relating to the restrictions on
transfers of such Securities (the form of which letter can be obtained
from the Trustee) and that the undersigned has been advised by the
transferee that it is acquiring this Security for investment and not
with a view to, or for offer or sale in connection with, any
distribution (within the meaning of the Securities Act of 1933, as
amended) or fractionalization thereof or with any intention of
reselling this Security or any part thereof, subject to any
requirement of law that the disposition of its property being at all
times within its control and subject to its ability to
resell this Security pursuant to Rule 144A, Regulation S or other
exemption from registration available under the Securities Act of
1933, as amended.
OR
[ ] (c) This Security is being transferred by the undersigned in an "Offshore
Transaction" (as defined in Regulation S under the Securities Act of
1933, as amended) to a transferee that is not, or that the undersigned
reasonably believes not to be, a "U.S. Person" (as defined in
Regulation S under the Securities Act of 1933, as amended) pursuant
and in accordance with the exemption from registration under the
Securities Act of 1933, as amended, provided by Regulation S
thereunder.
2. AFFILIATION WITH ISSUER [check if applicable]
[ ] (a) The undersigned represents and warrants that it is, or at sometime
during which it held this Security was, an Affiliate of the Issuer.
(b) If 2(a) above is checked AND if the undersigned was not an Affiliate
of the Issuer at all times during which it held this Security,
indicate the most recent date as of which the undersigned was an
Affiliate of the Issuer: ____________________
(c) If 2(a) above is checked AND if the transferee will not pay the full
purchase price for the transfer of this Security on or prior to the
date of transfer indicate when such purchase price will be paid:
____________________.
TO BE COMPLETED BY TRANSFEREE
IF 1(a) ABOVE IS CHECKED AND THE TRANSFEROR IS NOT A
QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information.
Dated: ____________________ __________________________
NOTICE: To be executed by
B-2
an officer.
TO BE COMPLETED BY TRANSFEREE
IF 1(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S.
Person" (as defined in Regulation S under the Securities Act of 1933, as
amended).
Dated: ____________________ __________________________
NOTICE: To be executed by
an officer.
If none of the boxes under the Applicable Exemption section of the Transferor
Certifications is checked or if any of the above representations required to be
made by the transferee is not made, the Trustee shall not be obligated to
register this Security in the name of any person other than the Holder hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 2(A) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT NOR
HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS SECURITY AN AFFILIATE, AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE ISSUER.
Dated: ____________ _____________________________
NOTICE: The signature of the
Holder to this assignment must
correspond with the name as
written upon the face of this
Security in every particular,
without alteration or enlarge-
ment or any change whatsoever.
B-3
EXHIBIT C
[FORM OF CERTIFICATE OF TRANSFER FOR COMMON STOCK]
In connection with any transfer of this Common Stock occurring prior
to the earlier of (i) the date which is three years after the issuance of this
Common Stock (or any predecessor Common Stock or Security) or (ii) the date on
which the Issuer instructs the Transfer Agent to remove the restricted legend
from the Common Stock (or predecessor Common Stock or Security), the undersigned
confirms that:
TRANSFEROR CERTIFICATIONS
1. APPLICABLE EXEMPTION [check one]
[ ] (a) This Common Stock is being transferred by the undersigned to a
transferee that is, or that the undersigned reasonably believes to be,
a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended) pursuant to and in accordance with
the exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
OR
[ ] (b) This Common Stock is being transferred by the undersigned to a
transferee that is an institutional "accredited investor" (within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended) that has furnished to the Transfer Agent a signed
letter containing certain representations and agreements relating to
the restrictions on transfers of such Common Stock (the form of which
letter can be obtained from the Transfer Agent) and that the
undersigned has been advised by the transferee that it is acquiring
this Common Stock for investment and not with a view to, or for offer
or sale in connection with, any distribution (within the meaning of
the Securities Act of 1933, as amended) or fractionalization thereof
or with any intention of reselling this Common Stock or any part
thereof, subject to any requirement of law that the disposition of its
property being at all times within its control and subject to its
ability to resell this Common Stock pursuant to Rule 144A, Regulation
S or other
C-1
exemption from registration available under the Securities Act of
1933, as amended.
OR
[ ] (c) This Common Stock is being transferred by the undersigned in an
"Offshore Transaction" (as defined in Regulation S under the
Securities Act of 1933, as amended) to a transferee that is not, or
that the undersigned reasonably believes not to be, a "U.S. Person"
(as defined in Regulation S under the Securities Act of 1933, as
amended) pursuant and in accordance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Regulation S thereunder.
2. AFFILIATION WITH ISSUER [check if applicable]
[ ] (a) The undersigned represents and warrants that it is, or at sometime
during which it held this Common Stock (or predecessor Common Stock or
Security) was, an Affiliate of the Issuer.
(b) If 2(a) above is checked AND if the undersigned was not an Affiliate
of the Issuer at all times during which it held this Common Stock (or
predecessor Common Stock or Security), indicate the most recent date
as of which the undersigned was an Affiliate of the Issuer:
____________________
(c) If 2(a) above is checked AND if the transferee will not pay the full
purchase price for the transfer of this Common Stock on or prior to
the date of transfer indicate when such purchase price will be paid:
____________________.
TO BE COMPLETED BY TRANSFEREE
IF 1(a) ABOVE IS CHECKED AND THE TRANSFEROR IS NOT A
QUALIFIED INSTITUTIONAL BUYER:
The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933,
as amended, and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information.
Dated: ____________________ __________________________
NOTICE: To be executed by
C-2
an officer.
TO BE COMPLETED BY TRANSFEREE
IF 1(c) ABOVE IS CHECKED:
The undersigned represents and warrants that it is not a "U.S.
Person" (as defined in Regulation S under the Securities Act of 1933, as
amended).
Dated: ____________________ __________________________
NOTICE: To be executed by
an officer.
If none of the boxes under the Applicable Exemption section of the Transferor
Certifications is checked or if any of the above representations required to be
made by the transferee is not made, the Transfer Agent shall not be obligated to
register this Common Stock in the name of any person other than the Holder
hereof.
THE UNDERSIGNED HEREBY AGREES THAT, UNLESS THE BOX ABOVE UNDER ITEM 2(A) IS
CHECKED, THE UNDERSIGNED SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS NOT NOR
HAS IT BEEN AT ANY TIME DURING WHICH IT HELD THIS COMMON STOCK AN AFFILIATE, AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE ISSUER.
Dated: ____________ _____________________________
NOTICE: The signature of the
Holder to this assignment must
correspond with the name as
written upon the face of this
Common Stock in every
particular, without alteration
or enlargement or any change
whatsoever.
C-3