Exhibit 4.2
SCIENTIFIC GAMES CORPORATION
as Issuer
THE GUARANTORS PARTY HERETO
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee
________________
INDENTURE
Dated as of December 23, 2004
________________
0.75% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES DUE 2024
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
Section 1.01. Definitions...................................................2
ARTICLE II
Issue, Description, Execution, Registration and Exchange of Debentures
Section 2.01. Designation Amount and Issue of Debentures...................17
Section 2.02. Form of Debentures...........................................17
Section 2.03. Date and Denomination of Debentures; Payments of Interest....18
Section 2.04. Execution of Debentures......................................19
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer.....................................20
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures..............27
Section 2.07. Temporary Debentures.........................................28
Section 2.08. Cancellation of Debentures...................................28
Section 2.09. CUSIP Numbers................................................28
ARTICLE III
Redemption and Repurchase of Debentures
Section 3.01. Company's Right to Redeem....................................29
Section 3.02. Notice of Optional Redemption; Selection of Debentures.......29
Section 3.03. Payment of Debentures Called for Redemption by the
Company......................................................31
Section 3.04. Repurchase of Debentures by the Company at Option of
Holders Upon a Fundamental Change............................32
Section 3.05. Repurchase of Debentures by the Company at Option of
Holders on Specified Dates...................................34
Section 3.06. Conditions and Procedures for Repurchase at Option of
Holders......................................................36
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ARTICLE IV
Mandatory Disposition Pursuant to Gaming Laws
ARTICLE V
Particular Covenants of the Company
Section 5.01. Payment of Principal and Interest............................40
Section 5.02. Maintenance of Office or Agency..............................40
Section 5.03. Appointments to Fill Vacancies in Trustee's Office...........41
Section 5.04. Provisions as to Paying Agent................................41
Section 5.05. Existence....................................................42
Section 5.06. Rule 144A Information Requirement............................42
Section 5.07. Stay, Extension and Usury Laws...............................43
Section 5.08. Compliance Certificate.......................................43
ARTICLE VI
Debentureholders' Lists and Reports by the Company and the Trustee
Section 6.01. Debentureholders' Lists......................................43
Section 6.02. Preservation and Disclosure of Lists.........................44
Section 6.03. Reports by Trustee...........................................44
Section 6.04. Reports by Company...........................................44
ARTICLE VII
Remedies of the Trustee and Debentureholders on an Event Of Default
Section 7.01. Events of Default............................................45
Section 7.02. Payments of Debentures on Default; Suit Therefor.............48
Section 7.03. Application of Monies Collected by Trustee...................49
Section 7.04. Proceedings by Debentureholder...............................50
Section 7.05. Proceedings by Trustee.......................................51
Section 7.06. Remedies Cumulative and Continuing...........................51
Section 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders.................................52
Section 7.08. Notice of Defaults...........................................52
Section 7.09. Undertaking to Pay Costs.....................................53
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ARTICLE VIII
The Trustee
Section 8.01. Duties and Responsibilities of Trustee.......................53
Section 8.02. Reliance on Documents, Opinions, Etc.........................55
Section 8.03. No Responsibility for Recitals, Etc..........................56
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures...........................................56
Section 8.05. Monies to be Held in Trust...................................56
Section 8.06. Compensation and Expenses of Trustee.........................57
Section 8.07. Officers' Certificate as Evidence............................57
Section 8.08. Conflicting Interests of Trustee.............................58
Section 8.09. Eligibility of Trustee.......................................58
Section 8.10. Resignation or Removal of Trustee............................58
Section 8.11. Acceptance by Successor Trustee..............................59
Section 8.12. Succession by Merger.........................................60
Section 8.13. Preferential Collection of Claims............................60
ARTICLE IX
The Debentureholders
Section 9.01. Action by Debentureholders...................................61
Section 9.02. Proof of Execution by Debentureholders.......................61
Section 9.03. Who Are Deemed Absolute Owners...............................61
Section 9.04. Company-owned Debentures Disregarded.........................61
Section 9.05. Revocation of Consents, Future Holders Bound.................62
ARTICLE X
Meetings of Debentureholders
Section 10.01. Purpose of Meetings.........................................62
Section 10.02. Call of Meetings by Trustee.................................63
Section 10.03. Call of Meetings by Company or Debentureholders.............63
Section 10.04. Qualifications for Voting...................................63
Section 10.05. Regulations.................................................64
Section 10.06. Voting......................................................64
Section 10.07. No Delay of Rights by Meeting...............................65
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ARTICLE XI
Supplemental Indentures
Section 11.01. Supplemental Indentures Without Consent of
Debentureholders............................................65
Section 11.02. Supplemental Indenture with Consent of Debentureholders.....67
Section 11.03. Effect of Supplemental Indenture............................68
Section 11.04. Notation on Debentures......................................68
Section 11.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee........................................68
ARTICLE XII
Consolidation, Merger, Sale, Conveyance and Lease
Section 12.01. Consolidation on Certain Terms..............................69
Section 12.02. Successor to be Substituted.................................69
Section 12.03. Opinion of Counsel to be Given Trustee......................70
ARTICLE XIII
Satisfaction and Discharge of Indenture
Section 13.01. Discharge of Indenture......................................70
Section 13.02. Paying Agent to Repay Monies Held...........................71
Section 13.03. Return of Unclaimed Monies..................................71
ARTICLE XIV
Immunity of Incorporators, Stockholders, Officers and Directors
Section 14.01. Indenture and Debentures Solely Corporate Obligations.......71
ARTICLE XV
Conversion of Debentures
Section 15.01. Right to Convert............................................72
Section 15.02. Exercise of Conversion Right; Issuance of Common Stock
on Conversion; No Adjustment for Interest or Dividends......75
Section 15.03. Payment Upon Conversion; Cash Payments in Lieu of
Fractional Shares...........................................77
Section 15.04. Conversion Rate.............................................78
Section 15.05. Adjustment of Conversion Rate...............................78
iv
Section 15.06. Effect of Reclassification, Consolidation, Merger or
Sale........................................................85
Section 15.07. Taxes on Shares Issued......................................86
Section 15.08. Reservation of Shares, Shares to be Fully Paid;
Compliance with Governmental Requirements; Listing of
Common Stock................................................86
Section 15.09. Responsibility of Trustee...................................87
Section 15.10. Notice to Holders Prior to Certain Actions..................88
Section 15.11. Stockholder Rights Plan.....................................89
Section 15.12. Conversion After a Public Acquirer Change of Control........89
ARTICLE XVI
Subordination
Section 16.01. Debentures Subordinated to Senior Debt......................90
Section 16.02. No Payment on Debentures in Certain Circumstances...........90
Section 16.03. Payment Over of Proceeds Upon Dissolution, Etc..............91
Section 16.04. Subrogation.................................................92
Section 16.05. Obligations of Company Unconditional........................93
Section 16.06. Notice to Trustee...........................................93
Section 16.07. Reliance on Judicial Order or Certificate of
Liquidating Agent...........................................94
Section 16.08. Trustee's Relation to Senior Debt...........................94
Section 16.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Debt....................95
Section 16.10. Debentureholders Authorize Trustee to Effectuate
Subordination of Debentures.................................95
Section 16.11. This Article Not to Prevent Events of Default...............95
Section 16.12. Trustee's Compensation Not Prejudiced.......................95
Section 16.13. No Waiver of Subordination Provisions.......................95
Section 16.14. Acceleration of Debentures..................................96
ARTICLE XVII
Guarantees
Section 17.01. Unconditional Guarantee.....................................96
Section 17.02. Limitations on Guarantees...................................97
Section 17.03. Execution and Delivery......................................98
Section 17.04. Release of a Guarantor......................................98
Section 17.05. Waiver of Subrogation.......................................99
Section 17.06. Obligations Continuing......................................99
Section 17.07. Obligations Reinstated......................................99
Section 17.08. Waiver.....................................................100
Section 17.09. No Obligation To Take Action Against the Company...........100
Section 17.10. Default and Enforcement....................................100
v
Section 17.11. Amendment, Etc.............................................100
Section 17.12. Acknowledgment.............................................100
Section 17.13. Costs and Expenses.........................................100
Section 17.14. No Waiver; Cumulative Remedies.............................101
Section 17.15. Successors and Assigns.....................................101
Section 17.16. Contribution...............................................101
Section 17.17. Future Guarantors..........................................101
ARTICLE XVIII
Subordination of the Guarantees
Section 18.01. Guarantee Obligations Subordinated to Guarantor Senior
Debt.......................................................102
Section 18.02. No Payment on Guarantee in Certain Circumstances...........102
Section 18.03. Payment Over of Proceeds Upon Dissolution, Etc.............103
Section 18.04. Subrogation................................................104
Section 18.05. Obligations of Guarantor Unconditional.....................105
Section 18.06. Notice to Trustee..........................................105
Section 18.07. Reliance on Judicial Order or Certificate of
Liquidating Agent..........................................106
Section 18.08. Trustee's Relation to Guarantor Senior Debt................107
Section 18.09. Subordination Rights Not Impaired by Acts or Omissions
of the Guarantors or Holders of Guarantor Senior Debt......107
Section 18.10. Debentureholders Authorize Trustee to Effectuate
Subordination of Guarantees................................107
Section 18.11. This Article Not to Prevent Events of Default..............107
Section 18.12. Trustee's Compensation Not Prejudiced......................107
Section 18.13. No Waiver of Guarantee Subordination Provisions............108
Section 18.14. Payments May be Paid Prior to Dissolution..................108
ARTICLE XIX
Miscellaneous Provisions
Section 19.01. Provisions Binding on Company's Successors.................108
Section 19.02. Official Acts by Successor Corporation.....................108
Section 19.03. Addresses for Notices, Etc.................................108
Section 19.04. Governing Law..............................................109
Section 19.05. Evidence of Compliance with Conditions Precedent,
Certificates to Trustee....................................109
Section 19.06. Legal Holidays.............................................110
Section 19.07. Company Responsible for Making Calculations................110
Section 19.08. Trust Indenture Act........................................110
Section 19.09. No Security Interest Created...............................111
Section 19.10. Benefits of Indenture......................................111
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Section 19.11. Table of Contents, Headings, Etc...........................111
Section 19.12. Execution in Counterparts..................................111
Section 19.13. Severability...............................................111
Section 19.14. Tax Treatment..............................................111
Exhibit A - Form of Debenture
vii
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
ss.310(a)(1)......................................................8.09
(a)(2).......................................................8.09
(a)(3).......................................................N.A.
(a)(4).......................................................N.A.
(a)(5).......................................................N.A.
(b)..........................................................8.08
(c)..........................................................N.A.
ss.311(a).........................................................8.13
(b)..........................................................8.13
(c)..........................................................N.A.
ss.312(a)...................................................6.01; 6.02
(b)..........................................................N.A.
(c)..........................................................N.A.
ss.313(a).........................................................6.03
(b)..........................................................N.A.
(c)..........................................................6.03
(d)..........................................................6.03
ss.314(a).........................................................6.04
(b)..........................................................N.A.
(c)(1)......................................................19.05
(c)(2)......................................................19.05
(c)(3).......................................................N.A.
(d)..........................................................N.A.
(e).........................................................19.05
(f)..........................................................N.A.
ss.315(a)...................................................8.01; 8.02
(b)..........................................................7.08
(c)..........................................................7.06
(d)....................................................8.01; 8.06
(e)..........................................................7.09
ss.316(a)(1)......................................................7.07
(a)(2)......................................................11.02
(b)..........................................................N.A.
(c)..........................................................9.01
ss.317(a)(1)......................................................7.02
(a)(2).......................................................7.02
(b)..........................................................5.04
ss.318(a)........................................................19.08
N.A. means not applicable.
*Note: This table shall not, for any purpose, be deemed to be part of the
Indenture.
viii
INDENTURE dated as of December 23, 2004, among
Scientific Games Corporation, a Delaware corporation
(hereinafter called the "Company"), the subsidiary
guarantors from time to time party hereto and Wells
Fargo Bank, National Association, as trustee
hereunder.
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 0.75% Convertible Senior Subordinated Debentures
due 2024 (hereinafter called the "Debentures"), in an aggregate principal
amount not to exceed $250,000,000 (or up to $275,000,000 if the Initial
Purchasers' option to purchase additional Debentures as set forth in the
Purchase Agreement is exercised in full), and, to provide the terms and
conditions upon which the Debentures are to be authenticated, issued,
delivered and guaranteed, the Company and each Guarantor party hereto has
duly authorized the execution and delivery of this Indenture;
WHEREAS, the Debentures, the certificate of authentication to be
borne by the Debentures, a form of assignment, a form of fundamental change
repurchase election, a form of Company repurchase election and a form of
conversion notice to be borne by the Debentures are to be substantially in
the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures,
when executed by the Company and authenticated and delivered by the Trustee,
as in this Indenture provided, the valid, binding and legal obligations of
the Company and the Guarantors, and to constitute this Indenture a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the Guarantees set forth herein and the issue
hereunder of the Debentures and the Guarantees have in all respects been duly
authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued, delivered and
guaranteed, and in consideration of the premises and of the purchase and
acceptance of the Debentures by the holders thereof, the Company and each
Guarantor party hereto covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective holders from time to time of the
Debentures (except as otherwise provided below), as follows:
ARTICLE I
Definitions
-----------
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities Act as in force at the date of the execution of this Indenture.
The words "herein", "hereof", "hereunder" and 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.
"Additional Amounts" has the meaning specified for "Additional
Amounts" in Section 3(a) of the Registration Rights Agreement.
"Additional Common Stock" has the meaning specified in
Section 15.01(d)
"Adjustment Event" has the meaning specified in Section 15.05(k).
"Agent Members" has the meaning specified in Section 2.05(b)(v).
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control", when used with respect to any specified Person means
the power to direct or cause the direction of the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the Company
or a committee of such Board duly authorized to act for it hereunder.
"Business Day" means any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close in The
City of New York.
"Capital Stock" of any Person means any and all shares (including
ordinary shares or American Depositary Shares), interests, participations or
other equivalents, however designated, of corporate stock or other equity
participations, including partnership interests, whether general or limited,
of such Person and any rights (other than debt securities convertible or
exchangeable into an equity interest), warrants or options to acquire an
equity interest in such Person.
2
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes
of this definition, the amount of such obligations at any date shall be the
capitalized amount of such obligations at such date, determined in accordance
with GAAP.
"Cash Settlement Averaging Period" with respect to any Debenture
means the 20 consecutive Trading Days beginning on the second Trading Day
after a holder of Debentures delivers a conversion notice to the Conversion
Agent, except that with respect to any notice of conversion received after
the date of issuance of a Redemption Notice in accordance with Section 3.02,
it shall mean the 20 consecutive Trading Days ending on the Trading Day
immediately preceding the applicable Redemption Date.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Stock" means any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to
the provisions of Section 15.06 and Section 15.12, however, shares issuable
on conversion of Debentures shall include only shares of the class designated
as Class A common stock, par value $0.01 per share, of the Company at the
date of this Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which
are not subject to redemption by the Company; provided that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the
first paragraph of this Indenture, and, subject to the provisions of Article
XII and Section 15.06, shall include its successors and assigns.
"Company Repurchase Date" has the meaning specified in
Section 3.05(a).
"Company Repurchase Election" has the meaning specified in
Section 3.05(c)(i).
"Company Repurchase Notice" has the meaning specified in
Section 3.05(b).
3
"Company Repurchase Price" has the meaning specified in
Section 3.05(a).
"Conversion Agent" means the Trustee or such other office or
agency designated by the Company where Debentures may be presented for
conversion.
"Conversion Date" has the meaning specified in Section 15.02.
"Conversion Price" as of any day means $1,000 divided by the
Conversion Rate as of such date and rounded to the nearest cent. The
Conversion Price shall initially be approximately $29.10 per share of Common
Stock.
"Conversion Rate" has the meaning specified in Section 15.04.
"Conversion Value" means the product of (1) the applicable
Conversion Rate and (2) the average of the Last Reported Sale Prices of the
Common Stock for the 20 consecutive Trading Days during the Cash Settlement
Averaging Period.
"Corporate Trust Office" or other similar term, means the
designated office of the Trustee at which at any particular time its
corporate trust business as it relates to this Indenture shall be principally
administered, which office is, at the date as of which this Indenture is
dated, located at 213 Court Street, Suite 703, Middletown, CT 06457, or at
any other address as the Trustee may designate from time to time by notice to
the holders.
"Credit Agreement" means the Existing Credit Agreement or, to
the extent entered into in replacement thereof, the New Credit Agreement, in
each case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, increasing the total
commitment under, refinancing, replacing or otherwise restructuring
(including adding Subsidiaries of the Company as additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
"Current Market Price" means the average of the Last Reported
Sale Price per share of the Common Stock for the 20 consecutive Trading Day
period ending on the applicable date of determination (if the applicable date
of determination is a Trading Day or, if not, then on the last Trading Day
prior to the applicable date of determination), appropriately adjusted to
take into account the occurrence, during the period commencing on the first
of the Trading Days during the 20 Trading Day period and ending on the
applicable date of determination, of any event that would result in an
adjustment of the Conversion Rate under this Indenture.
"Custodian" means the Trustee, or any successor entity thereto.
4
"Debenture" or "Debentures" means any Debenture or Debentures, as
the case may be, authenticated and delivered under this Indenture, including
any Global Debenture.
"Debenture Register" has the meaning specified in
Section 2.05(a).
"Debenture Registrar" has the meaning specified in
Section 2.05(a).
"Debentureholder" or "holder" as applied to any Debenture, or
other similar terms (but excluding the term "beneficial holder"), means any
Person in whose name at the time a particular Debenture is registered on the
Debenture Registrar's books.
"default" means any event that is, or after notice or passage of
time, or both, would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.03.
"Depositary" means the clearing agency registered under the
Exchange Act that is designated to act as the Depositary for the Global
Debentures. The Depository Trust Company shall be the initial Depositary,
until a successor shall have been appointed and become such Depositary
pursuant to the applicable provisions of this Indenture, and thereafter,
"Depositary" shall mean or include such successor.
"Designated Guarantor Senior Debt" means, with respect to any
Guarantor, (1) any Indebtedness outstanding under the Credit Agreement to the
extent guaranteed or otherwise incurred by such Guarantor and (2) any other
Guarantor Senior Debt of such Guarantor designated as "Designated Senior
Debt" or "Designated Guarantor Senior Debt" under the indenture governing the
Old Notes or the New High Yield Notes or any other Qualified Indebtedness
outstanding at the time of determination.
"Designated Senior Debt" means (1) any Indebtedness outstanding
under the Credit Agreement, (2) any other Senior Debt designated as
"Designated Senior Debt" under the indenture governing the Old Notes or the
New High Yield Notes or any other Qualified Indebtedness outstanding at the
time of determination and (3) if no Qualified Indebtedness is outstanding at
the time of determination, any other Senior Debt the principal amount of
which is $25.0 million or more and that has been designated by the Company as
"Designated Senior Debt" in the instrument creating such Indebtedness.
"Determination Date" has the meaning specified in
Section 15.05(k).
"Disqualified Stock" means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which it
is exchangeable), or upon the happening of any event (other than an event
which would constitute a Fundamental Change), matures (excluding any maturity
as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the sole option of the holder thereof
5
(except, in each case, upon the occurrence of a Fundamental Change), in whole or
in part, on or prior to the Stated Maturity.
"Effective Date" has the meaning specified in
Section 15.01(b)(ii).
"Event of Default" means any event specified in Section 7.01 as
an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as in effect
from time to time.
"Ex-Dividend Date" means, with respect to any distribution on
shares of Common Stock, the first date upon which a sale of the Common Stock
does not automatically transfer the right to receive such distribution from
the seller of the Common Stock to the buyer.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of November 6, 2003, among the Company, the lenders party
thereto and The Bank of New York, as administrative agent, including all
related notes, collateral documents and guarantees.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither
of whom is under pressure or compulsion to complete the transaction. Fair
market value shall be determined by the Board of Directors acting reasonably
and in good faith and shall be evidenced by a board resolution delivered to
the Trustee.
"Fundamental Change" means the occurrence of any of the
following:
(i) a "person" or "group" within the meaning of Section 13(d) of the
Exchange Act other than the Company, its Subsidiaries or its or their
employee benefit plans, files a Schedule TO or any other schedule, form or
report under the Exchange Act disclosing that such person or group has
become the direct or indirect ultimate "beneficial owner," as defined in
Rule 13d-3 under the Exchange Act, of more than 50% of the total voting
power of all shares of the Company's Capital Stock that are entitled to
vote generally in the election of directors;
(ii) consummation of any share exchange, consolidation or merger of
the Company or any sale, lease or other transfer in one transaction or a
series of transactions of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, taken as a whole, to any
Person other than the Company or one or more of its Subsidiaries, pursuant
to which the Common Stock will be converted into cash, securities or other
property; provided that a transaction where the holders of the Company's
voting Capital Stock immediately prior to such transaction have, directly
or indirectly, more than 50% of the aggregate voting power of all shares
of Capital Stock of the continuing or surviving corporation or
6
transferee entitled to vote generally in the election of directors
immediately after such event shall not be a Fundamental Change;
(iii) the replacement of a majority of the Board of Directors over a
two-year period from the directors who constituted the Board of Directors
at the beginning of such period (other than individuals designated to
serve from time to time on the Board of Directors pursuant to the
Stockholders' Agreement, dated as of September 6, 2000, as amended or
supplemented as of the Original Issue Date, among the Company and certain
of its stockholders), and such replacement shall not have been approved by
a vote of at least a majority of the Board of Directors then still in
office who either were members of the Board of Directors at the beginning
of such period or whose election as a member of the Board of Directors was
previously so approved;
(iv) the stockholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company; or
(v) the Common Stock or other common stock into which the Debentures
are convertible is neither listed for trading on a U.S. national
securities exchange nor approved for trading on The NASDAQ National Market
or another established automated over-the-counter trading market in the
United States.
A Fundamental Change will not be deemed to have occurred in respect
of any of the foregoing, however, if either:
(i) the Last Reported Sale Price of the Common Stock for any five
Trading Days within the 10 consecutive Trading Days ending immediately
before the later of the Fundamental Change or the public announcement
thereof equals or exceeds 110% of the Conversion Price of the Debentures
immediately before the Fundamental Change or the public announcement
thereof (the "Trading Price Exception"); or
(ii) at least 90% of the consideration, excluding cash payments for
fractional shares, in the transaction or transactions constituting the
Fundamental Change consists of shares of Capital Stock traded on a
national securities exchange or quoted on The NASDAQ National Market or
which will be so traded or quoted when issued or exchanged in connection
with a Fundamental Change (the "publicly traded securities") and as a
result of this transaction or transactions the Debentures become
convertible into such publicly traded securities, excluding cash payments
for fractional shares.
"Fundamental Change Repurchase Date" has the meaning specified in
Section 3.04(a).
"Fundamental Change Repurchase Election" has the meaning
specified in Section 3.04(c)(i).
7
"Fundamental Change Repurchase Notice" has the meaning specified
in Section 3.04(b).
"Fundamental Change Repurchase Price" has the meaning provided in
Section 3.04(a).
"Funding Guarantor" has the meaning specified in Section 17.16.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the Original Issue Date, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved
by a significant segment of the accounting profession.
"Gaming Authority" means any regulatory body responsible for a
gaming license held by the Company or a Subsidiary of the Company or any
agency (including, without limitation, any agency established by a United
States federally-recognized Indian tribe to regulate gaming on such tribe's
reservation) which has, or may at any time after the Original Issue Date
have, jurisdiction over the gaming activities of the Company or any of its
Subsidiaries, or any successor to such authority.
"Global Debenture" has the meaning specified in Section 2.02.
"Guarantee" has the meaning specified in Section 17.01.
"Guarantor" means (i) each of Scientific Games Management
Corporation, Scientific Games Holdings Corp., Scientific Games (Greece),
Inc., Scientific Games Acquisition, Inc., Scientific Games Finance
Corporation, Scientific Games International, Inc., MDI Entertainment, LLC,
Scientific Games Royalty Corporation, Scientific Games Racing, LLC, Autotote
International, Inc., SG Racing, Inc., Autotote Enterprises, Inc., Autotote
Keno Corporation, Autotote Gaming, Inc., Autotote Dominicana Inc., Autotote
Interactive, Inc. and Scientific Games Online Entertainment Systems, Inc. and
(ii) each of the Company's Subsidiaries that in the future executes a
supplemental indenture pursuant to Section 17.17 in which such Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; provided
that any Person constituting a Guarantor as described above shall cease to
constitute a Guarantor when its respective Guarantee is released in
accordance with the terms of this Indenture.
"Guarantor Payment Blockage Notice" has the meaning specified in
Section 18.02(a).
"Guarantor Payment Blockage Period" has the meaning specified in
Section 18.02(a).
"Guarantor Senior Debt" means the principal of, premium, if any,
and interest (including any interest accruing subsequent to the filing of a
petition of
8
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of any Guarantor of the Debentures, whether outstanding on the
Original Issue Date or thereafter created, incurred or assumed, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Guarantee of the
Debentures. Without limiting the generality of the foregoing, "Guarantor Senior
Debt" shall also include the principal of, premium, if any, interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of, all monetary obligations (including guarantees
thereof) of every nature of any Guarantor of the Debentures under the Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities. "Guarantor Senior Debt" shall not include
(1) Indebtedness evidenced by a Guarantee of the Debentures, the Old
Notes or the New High Yield Notes;
(2) any Indebtedness of such Guarantor of the Debentures owing to
the Company or to a Subsidiary of the Company;
(3) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any Subsidiary of the Company or Affiliate
of the Company (including, without limitation, amounts owed for compensation);
(4) trade payables and other current liabilities arising in the
ordinary course of business in connection with obtaining goods, materials or
services;
(5) Indebtedness represented by Disqualified Stock;
(6) any liability for federal, state, local or other taxes owed or
owing by such Guarantor of the Debentures;
(7) that portion of any Indebtedness of such Guarantor of the
Debentures that is subordinated to or pari passu with any other Indebtedness as
a result of having been incurred in violation of the agreement or agreements
governing such other Indebtedness;
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment or junior to any other Indebtedness of such Guarantor of the
Debentures; and
(9) any Indebtedness which, when incurred and without respect to any
other election under Section 1111(b) of Title 11, United States Code, is without
recourse to such Guarantor of the Debentures.
9
"incur" means, with respect to any Indebtedness, to, directly or
indirectly, create, incur, assume, guarantee, acquire, become liable,
contingently or otherwise with respect to, or otherwise become responsible for
payment of such Indebtedness.
"Indebtedness" means with respect to any Person, without
duplication,
(1) the principal amount of all obligations of such Person for
borrowed money,
(2) the principal amount of all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(3) all Capitalized Lease Obligations of such Person,
(4) all obligations of such Person to pay the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding accounts payable and other
current liabilities arising in the ordinary course of business),
(5) all obligations of such Person for the reimbursement of any
obligor on any letter of credit or banker's acceptance,
(6) guarantees and other contingent obligations of such Person in
respect of Indebtedness referred to in clauses (1) through (5) above and
clause (8) below,
(7) all Indebtedness of any other Person of the type referred to
in clauses (1) through (6) above which are secured by any Lien on any
property or asset of such Person, the amount of such obligation being deemed
to be the lesser of the fair market value at such date of any asset subject
to any Lien securing the Indebtedness of others and the amount of the
Indebtedness secured,
(8) all obligations under currency swap agreements and interest
swap agreements of such Person, and
(9) all Disqualified Stock issued by such Person.
"Indenture" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented.
"Initial Purchasers" means J.P. Morgan Securities Inc., Bear,
Stearns & Co. Inc., Jefferies & Company, Inc., Ramius Securities, LLC, BNY
Capital Markets, Inc., Commerzbank Capital Markets Corp. and LaSalle Debt
Capital Markets, a division of ABN AMRO Financial Services, Inc. (each an
"Initial Purchaser").
"Interest" means, when used with reference to the Debentures, any
interest payable under the terms of the Debentures, and Additional Amounts,
if any, payable under the terms of the Registration Rights Agreement.
10
"Interest Payment Date" means June 1 and December 1 of each year,
commencing June 1, 2005.
"Last Reported Sale Price" of the Common Stock on any date means
the closing sale price per share (or if no closing sale price is reported,
the average of the bid and asked prices or, if more than one in either case,
the average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed on
a U.S. national or regional securities exchange, as reported by The NASDAQ
National Market. If the Common Stock is not listed for trading on a U.S.
national or regional securities exchange and not reported by The NASDAQ
National Market on the relevant date, the "Last Reported Sale Price" will be
the last quoted bid price for the Common Stock in the over-the-counter market
on the relevant date as reported by the National Quotation Bureau
Incorporated or similar organization. If the Common Stock is not so quoted,
the "Last Reported Sale Price" will be the average of the midpoint of the
last bid and asked prices for the Common Stock on the relevant date quoted by
each of at least three nationally recognized independent investment banking
firms selected by the Company for this purpose.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Majority Owned" means having "beneficial ownership" (as defined
in Rule 13(d)(3) under the Exchange Act) of more than 50% of the total voting
power of all shares of the respective entity's Capital Stock that are
entitled to vote generally in the election of directors. "Majority Owner"
has the correlative meaning.
"New Credit Agreement" means the Credit Agreement dated on or
about the Original Issue Date among the Company, the lenders party thereto
and JPMorgan Chase Bank, N.A., as administrative agent, including all related
notes, collateral documents and guarantees.
"New High Yield Notes" means the 6 1/4% Senior Subordinated Notes
due 2012 of the Company, issued pursuant to an indenture dated on or about
the Original Issue Date.
"Non-Stock Change of Control" has the meaning specified in
Section 15.01(d).
"non-electing share" has the meaning specified in Section 15.06.
"Obligations" means, with respect to any Indebtedness, all
principal, interest, premiums, penalties, fees, indemnities, expenses
(including legal fees and
11
expenses), reimbursement obligations and other liabilities payable to the holder
of such Indebtedness under the documentation governing such Indebtedness.
"Officers' Certificate", when used with respect to the Company,
means a certificate signed by any two of the Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the President, the Chief
Financial Officer, any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President"), the
Treasurer or the Secretary of the Company; provided that the Officers'
Certificate delivered on the date hereof pursuant to Section 19.05 may be signed
by any one of the foregoing. "Officers' Certificate", when used in respect of a
Guarantor, has a correlative meaning.
"Old Notes" means the 12.5% Senior Subordinated Notes due 2010 of
the Company, issued pursuant to an indenture dated as of August 14, 2000.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other
counsel reasonably acceptable to the Trustee.
"Original Issue Date" means December 23, 2004.
"outstanding", when used with reference to Debentures and subject
to the provisions of Section 9.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:
(a) Debentures theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any Paying Agent (other than the Company)
(provided that such deposit or payment therefrom is not prohibited by
Article XVI or XVIII of this Indenture) or (ii) which shall have been
otherwise discharged in accordance with Article XIII;
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant
to the terms of Section 2.06; and
(d) Debentures converted into cash or a combination of cash and
Common Stock (or other property in accordance with the terms of this
Indenture), as the case may be, pursuant to Article XV and Debentures
deemed not outstanding pursuant to Article III.
"Paying Agent" means the Trustee or such other office or agency
designated by the Company where Debentures may be presented for payment.
12
"Payment Blockage Notice" has the meaning specified in
Section 16.02(a).
"Payment Blockage Period" has the meaning specified in
Section 16.02(a).
"Person" means a corporation, an association, a partnership, a
limited liability company, an individual, a joint venture, a joint stock
company, a trust, an unincorporated organization or a government or an agency
or a political subdivision thereof.
"Permitted Junior Securities" means
(1) Qualified Capital Stock of the Company or any Guarantor; or
(2) debt securities that are subordinated to (a) all Senior Debt
or Guarantor Senior Debt and (b) any debt securities issued in exchange for
Senior Debt or Guarantor Senior Debt to substantially the same extent as, or
to a greater extent than, the Debentures and the Guarantees of the Debentures
are subordinated to Senior Debt and Guarantor Senior Debt, respectively,
under this Indenture.
"Portal Market" means the Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in
lieu of a mutilated, lost, destroyed or stolen Debenture shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Debenture
that it replaces.
"Public Acquirer Change of Control" means any event constituting
a Non-Stock Change of Control in which the acquirer has a class of common
stock traded on any U.S. national securities exchange or quoted on The NASDAQ
National Market or which will be so traded or quoted when issued or exchanged
in connection with such Non-Stock Change of Control (the "Public Acquirer
Common Stock"). If an acquirer does not itself have a class of common stock
satisfying the foregoing requirement, it will be deemed to have Public
Acquirer Common Stock if a corporation that directly or indirectly is the
Majority Owner of the acquirer has a class of common stock satisfying the
foregoing requirement; in such case, all references to Public Acquirer Common
Stock shall refer to such class of common stock.
"Public Acquirer Common Stock" has the meaning specified in the
definition of Public Acquirer Change of Control in this Section 1.01.
"Purchase Agreement" means the Purchase Agreement, dated as of
December 1, 2004, among the Company, the Guarantors and the Initial
Purchasers.
13
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Stock.
"Qualified Indebtedness" means all senior subordinated
indebtedness of the Company or its Subsidiaries that (1) is in the form of,
or represented by, bonds or other securities or any guarantee thereof and (2)
is, or may be, quoted, listed or purchased and sold on any stock exchange,
automated trading system or over-the-counter or other securities market
(including, without prejudice to the generality of the foregoing, the market
for securities eligible for resale pursuant to Rule 144A), and shall include,
without limitation, the New High Yield Notes, if issued, and the Old Notes.
"Redemption Date" has the meaning specified in Section 3.02(a).
"Redemption Notice" has the meaning specified in Section 3.02(a).
"Redemption Price" has the meaning specified in Section 3.01.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated December 23, 2004, among the Company, the Guarantors party
thereto and the Initial Purchasers, as amended from time to time in
accordance with its terms.
"Regular Record Date" means, with respect to each Interest
Payment Date, the close of business on the May 15 or November 15 next
preceding such Interest Payment Date (whether or not a Business Day).
"Repurchase Date" means the Fundamental Change Repurchase Date or
the Company Repurchase Date, as applicable.
"Repurchase Election" means the Fundamental Change Repurchase
Election or the Company Repurchase Election, as applicable.
"Repurchase Price" means the Fundamental Change Repurchase Price
or the Company Repurchase Price, as applicable.
"Responsible Officer" means, when used with respect to the
Trustee, any officer of the Trustee within the Corporate Trust Department (or
any successor unit, department or division of the Trustee) located at the
Corporate Trust Office of the Trustee who has direct responsibility for the
administration of this Indenture and, for the purposes of Sections 7.08 and
8.01(b), also means any other officer or person performing similar functions
to whom any corporate trust matter is referred because of such person's
knowledge of any familiarity with the particular subject.
"Restricted Securities" has the meaning specified in
Section 2.05(c).
"Rule 144A" means Rule 144A as promulgated under the Securities
Act.
14
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as in effect from time
to time.
"Senior Debt" means the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on any Indebtedness of the Company, whether outstanding on
the Original Issue Date or thereafter created, incurred or assumed, unless,
in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to
the Debentures. Without limiting the generality of the foregoing, "Senior
Debt" shall also include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable
law) on, and all other amounts owing in respect of, all monetary obligations
(including guarantees thereof) of every nature of the Company under the
Credit Agreement, including, without limitation, obligations to pay principal
and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities. "Senior Debt" shall not include
(1) Indebtedness evidenced by the Debentures, the Old Notes or
the New High Yield Notes;
(2) any Indebtedness of the Company to a Subsidiary of the
Company;
(3) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any Subsidiary of the Company or
Affiliate of the Company (including, without limitation, amounts owed for
compensation);
(4) trade payables and other current liabilities arising in the
ordinary course of business in connection with obtaining goods, materials or
services;
(5) Indebtedness represented by Disqualified Stock;
(6) any liability for federal, state, local or other taxes owed
or owing by the Company;
(7) that portion of any Indebtedness that is subordinated to or
pari passu with any other Indebtedness as a result of having been incurred in
violation of the agreement or agreements governing such other Indebtedness;
(8) any Indebtedness which is, by its express terms, subordinated
in right of payment or junior to any other Indebtedness of the Company; and
(9) any Indebtedness which, when incurred and without respect to
any other election under Section 1111(b) of Title 11, United States Code, is
without recourse to the Company.
15
"Settlement Amount" has the meaning specified in Section 15.03(a).
"Significant Subsidiary" has the meaning specified in Rule 1-02
of Regulation S-X, and "Significant Subsidiaries" has a corresponding meaning.
"Special Record Date" has the meaning specified in
Section 2.03(a).
"Spin-Off" has the meaning specified in Section 15.05(c).
"Stated Maturity" means December 1, 2024.
"Stock Price" has the meaning specified in Section 15.01(d).
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other subsidiaries of that
Person (or a combination thereof).
"Trading Day" means a day during which trading in the Common
Stock generally occurs and a closing sale price for the Common Stock is
provided on The NASDAQ National Market or, if the Common Stock is not quoted
on The NASDAQ National Market, on the principal U.S. national or regional
securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a U.S. national or regional securities
exchange, on the principal other market on which the Common Stock is then
traded.
"Trading Price Exception" has the meaning specified in the
definition of "Fundamental Change" in this Section 1.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided
in Sections 11.03 and 15.06; provided that if the Trust Indenture Act of 1939
is amended after the date hereof, the term "Trust Indenture Act" shall mean,
to the extent required by such amendment, the Trust Indenture Act of 1939 as
so amended.
"Trustee" means Wells Fargo Bank, National Association, and its
successors and any corporation resulting from or surviving any consolidation
or merger to which it or its successors may be a party and any successor
trustee at the time serving as successor trustee hereunder.
16
ARTICLE II
Issue, Description, Execution, Registration and Exchange of Debentures
----------------------------------------------------------------------
Section 2.01. Designation Amount and Issue of Debentures. The
Debentures shall be designated as "0.75% Convertible Senior Subordinated
Debentures due 2024". Debentures not to exceed the aggregate principal amount of
$250,000,000 (or up to $275,000,000, if the Initial Purchasers' option to
purchase additional Debentures as set forth in the Purchase Agreement is
exercised in full) (except pursuant to Sections 2.05, 2.06, 3.04, 3.05 and 15.02
hereof) upon the execution of this Indenture, or from time to time thereafter,
may be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Debentures to or
upon the written order of the Company, signed by its Chief Executive Officer,
its President, its Chief Operating Officer or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President"), without any further action by the Company hereunder.
Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Debenture attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Any of the Debentures may have such letters, numbers or other
marks of identification and such notations, legends, endorsements or changes
as the officers executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Indenture, or as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in
order for the Debentures to be tradable on the Portal Market or as may be
required for the Debentures to be tradable on any other market developed for
trading of securities pursuant to Rule 144A or as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any securities exchange or automated
quotation system on which the Debentures may be listed, or to conform to
usage, or to indicate any special limitations or restrictions to which any
particular Debentures are subject.
So long as the Debentures are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, or otherwise
contemplated by Section 2.05(a), all of the Debentures will be represented by
one or more Debentures in global form registered in the name of the
Depositary or the nominee of the Depositary (a "Global Debenture"). The
transfer and exchange of beneficial interests in any such Global Debenture
shall be effected through the Depositary in accordance with this Indenture
and the applicable procedures of the Depositary. Except as provided in
Section 2.05(a), beneficial holders of a Global Debenture will not receive or
be entitled to
17
receive physical delivery of certificates in definitive form and will not be
considered holders of such Global Debenture.
Any Global Debenture shall represent such of the outstanding
Debentures as shall be specified therein and shall provide that it shall
represent the aggregate principal amount of outstanding Debentures from time
to time endorsed thereon and that the aggregate principal amount of
outstanding Debentures represented thereby may from time to time be increased
or reduced to reflect redemptions, repurchases, conversions, transfers or
exchanges permitted hereby. Any endorsement of a Global Debenture to reflect
the amount of any increase or decrease in the principal amount of outstanding
Debentures represented thereby shall be made by the Trustee or the Custodian,
at the direction of the Trustee, in such manner and upon instructions given
by the holder of such Debentures in accordance with this Indenture. Payment
of principal of and Interest on any Global Debenture shall be made to the
holder of such Debenture.
Section 2.03. Date and Denomination of Debentures; Payments of
Interest. The Debentures shall be issuable in fully registered form without
interest coupons in denominations of $1,000 principal amount and integral
multiples thereof. Each Debenture shall be dated the date of its authentication
and shall bear Interest from the date specified on the face of the form of
Debenture attached as Exhibit A hereto. Interest on the Debentures shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor
Debenture) is registered on the Debenture Register at the close of business
on the Regular Record Date with respect to an Interest Payment Date shall be
entitled to receive the Interest payable on such Interest Payment Date,
except that (i) Interest payable at Stated Maturity will be payable to the
Person to whom the principal amount is payable and (ii) the Interest payable
upon redemption or repurchase will be payable to the Person to whom the
principal amount is payable pursuant to such redemption or repurchase (unless
the Redemption Date or the Repurchase Date, as the case may be, is after a
Regular Record Date and on or prior to the corresponding Interest Payment
Date, in which case the semi-annual payment of Interest becoming due on such
date shall be payable to the holders of such Debentures registered as such on
the applicable Regular Record Date). Interest shall be payable at the office
of the Company maintained by the Company for such purposes in the Borough of
Manhattan, The City of New York, which shall initially be an office or agency
of the Trustee. The Company shall pay Interest (i) on any Debentures in
certificated form by check mailed to the address of the Person entitled
thereto as it appears in the Debenture Register (or upon written notice, by
wire transfer in immediately available funds, if such Person is entitled to
Interest on Debentures with an aggregate principal amount in excess of
$2,000,000) (provided that at Stated Maturity Interest on any Debenture will
be payable with the principal amount at the Company's office or agency in New
York City) or (ii) on any Global Debenture by wire transfer of immediately
available funds to the account of the Depositary or its nominee.
18
Any Interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any June 1 or December 1 (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Debentureholder on the relevant Regular Record Date by virtue of its having
been such Debentureholder, and such Defaulted Interest shall be paid by the
Company, at its election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a
"Special Record Date" for the payment of such Defaulted Interest, which
shall be the date fixed in the following manner. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Debenture and the date of the proposed payment (which shall
be not less than 25 days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of
the proposed payment, and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each holder at his address as it appears
in the Debenture Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b) of this Section 2.03.
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Debentures
may be listed or designated for issuance, and upon such notice as may be
required by such exchange or automated quotation system, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the
Trustee.
Section 2.04. Execution of Debentures. The Debentures shall be
signed in the name and on behalf of the Company by the manual or facsimile
signature of
19
its Chief Executive Officer, President, Chief Operating Officer or any
Vice President (whether or not designated by a number or numbers or word
or words added before or after the title "Vice President"). Only such
Debentures as shall bear thereon a certificate of authentication
substantially in the form set forth on the form of Debenture attached as
Exhibit A hereto, manually executed by the Trustee, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee upon any Debenture executed by the Company
shall be conclusive evidence that the Debenture so authenticated has been
duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of
the Debentures shall cease to be such officer before the Debentures so signed
shall have been authenticated and delivered by the Trustee, or disposed of by
the Company, such Debentures nevertheless may be authenticated and delivered
or disposed of as though the person who signed such Debentures had not ceased
to be such officer of the Company, and any Debenture may be signed on behalf
of the Company by such persons as, at the actual date of the execution of
such Debenture, shall be the proper officers of the Company, although at the
date of the execution of this Indenture any such person was not such an
officer.
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 5.02
being herein sometimes collectively referred to as the "Debenture Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The Debenture Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "Debenture Registrar" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.02.
Upon surrender for registration of transfer of any Debenture to
the Debenture Registrar or any co-registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.05, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Debentures of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Debentures to be exchanged at any such office or agency
maintained by the Company pursuant to Section 5.02. Whenever any Debentures
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Debentures which the Debentureholder
making the exchange is entitled to receive bearing registration numbers not
contemporaneously outstanding.
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All Debentures issued upon any registration of transfer or
exchange of Debentures shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debentures surrendered upon such registration of transfer
or exchange.
All Debentures presented or surrendered for registration of
transfer or for exchange, redemption, repurchase or conversion shall (if so
required by the Company or the Debenture Registrar) be duly endorsed, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the Debentureholder thereof or
his attorney duly authorized in writing.
No service charge shall be made to any holder for any
registration of, transfer or exchange of Debentures, but the Company may
require payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture Registrar
shall be required to exchange or register a transfer of (a) any Debentures
for a period of 15 days next preceding the mailing of a notice of redemption
of Debentures to be redeemed, (b) any Debentures or portions thereof called
for redemption pursuant to Section 3.01, (c) any Debentures or portions
thereof surrendered for conversion pursuant to Article XV, (d) any Debentures
or portions thereof tendered for repurchase (and not withdrawn) pursuant to
Section 3.04 or (e) any Debentures or portions thereof tendered for
repurchase (and not withdrawn) pursuant to Section 3.05.
(b) The following provisions shall apply only to Global Debentures:
(i) Each Global Debenture authenticated under this Indenture shall
be registered in the name of the Depositary or a nominee thereof and
delivered to such Depositary or a nominee thereof or Custodian therefor,
and each such Global Debenture shall constitute a single Debenture for all
purposes of this Indenture.
(ii) Notwithstanding any other provision in this Indenture, no
Global Debenture may be exchanged in whole or in part for Debentures
registered, and no transfer of a Global Debenture in whole or in part may
be registered, in the name of any Person other than the Depositary or a
nominee thereof unless (A) the Depositary (i) has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Debenture or (ii) has ceased to be a clearing agency registered under the
Exchange Act, and a successor depositary has not been appointed by the
Company within 90 days, (B) an Event of Default has occurred and is
continuing, (C) the Company, in its sole discretion, notifies the Trustee
in writing that it no longer wishes to have all the Debentures represented
by Global Debentures or (D) any beneficial holder reasonably requests such
exchange on terms acceptable to the Company and the Depositary, which in
the case of the Trustee may include, in the Trustee's sole discretion,
among other things, the requirement that (i) the Trustee and any Debenture
Registrar receive (a) from the
21
Company or the Depositary, a written order, in either case requesting such
exchange, and an Opinion of Counsel (which upon receipt thereof the
Trustee and such Debenture Registrar shall be fully protected in relying)
to the effect that (x) all securities laws in connection with such
exchange have been complied with and (y) such exchange is otherwise
authorized or permitted by this Indenture; and (b) from such beneficial
holder (x) an affidavit as to its beneficial ownership interest in such
Global Debenture and/or (y) an indemnity, reasonably satisfactory to the
Trustee and such Debenture Registrar, against any loss, liability or
expense to the Trustee and such Debenture Registrar to the extent that the
Trustee or Debenture Registrar acts upon such order, affidavit and/or
indemnity; and (ii) such exchange can be accomplished in a manner that is
practicable and not inconsistent with the rules of any applicable
Depositary or securities exchange upon which the Debentures may be listed
for trading. Any Global Debenture exchanged pursuant to clause (A) or (B)
above shall be so exchanged in whole and not in part and any Global
Debenture exchanged pursuant to clause (C) or (D) above may be exchanged
in whole or from time to time in part as directed by the Company. Any
Debenture issued in exchange for a Global Debenture or any portion thereof
shall be a Global Debenture; provided that any such Debenture so issued
that is registered in the name of a Person other than the Depositary or a
nominee thereof shall not be a Global Debenture.
(iii) Debentures issued in exchange for a Global Debenture or any
portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Debenture or
portion thereof to be so exchanged, shall be registered in such names and
be in such authorized denominations as the Depositary shall designate and
shall bear any legends required hereunder. Any Global Debenture to be
exchanged in whole shall be surrendered by the Depositary to the Trustee,
as Debenture Registrar. With regard to any Global Debenture to be
exchanged in part, either such Global Debenture shall be so surrendered
for exchange or, if the Trustee is acting as Custodian for the Depositary
or its nominee with respect to such Global Debenture, the principal amount
thereof shall be reduced, by an amount equal to the portion thereof to be
so exchanged, by means of an appropriate adjustment made on the records of
the Trustee. Upon any such surrender or adjustment, the Trustee shall
authenticate and make available for delivery the Debenture issuable on
such exchange to or upon the written order of the Depositary or an
authorized representative thereof.
(iv) In the event of the occurrence of any of the events specified
in clause (ii) above, the Company will promptly make available to the
Trustee a reasonable supply of certificated Debentures in definitive,
fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the Depositary
("Agent Members") nor any other Persons on whose behalf Agent Members may
act shall have any rights under this Indenture with respect to any Global
Debenture
22
registered in the name of the Depositary or any nominee thereof, and the
Depositary or such nominee, as the case may be, may be treated by the
Company, the Guarantors, the Trustee and any agent of the Company, the
Guarantors or the Trustee as the absolute owner and holder of such Global
Debenture for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Guarantors, the Trustee or
any agent of the Company, the Guarantors or the Trustee from giving effect
to any written certification, proxy or other authorization furnished by
the Depositary or such nominee, as the case may be, or impair, as between
the Depositary, its Agent Members and any other Person on whose behalf an
Agent Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a beneficial holder of any
Debenture.
(vi) At such time as all interests in a Global Debenture have been
redeemed, repurchased, converted, canceled or exchanged for Debentures in
certificated form, such Global Debenture shall, upon receipt thereof, be
canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any
time prior to such cancellation, if any interest in a Global Debenture is
redeemed, repurchased, converted, canceled or exchanged for Debentures in
certificated form, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions existing between
the Depositary and the Custodian, be appropriately reduced, and an
endorsement shall be made on such Global Debenture, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction.
(c) Every Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Debentures and required to bear the
legend set forth in Section 2.05(d), collectively, the "Restricted Securities")
shall be subject to the restrictions on transfer set forth in this Section
2.05(c) (including those set forth in the legend below) unless such restrictions
on transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such holder's acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in Section 2.05(c) and
2.05(d), the term "transfer" encompasses any sale, pledge, loan, transfer or
other disposition whatsoever of any Restricted Security or any interest therein.
Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under
23
the Securities Act or any similar provision then in force, or unless otherwise
agreed by the Company in writing, with written notice thereof to the Trustee:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE
144A")); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR TO
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO
SCIENTIFIC GAMES CORPORATION (THE "ISSUER"), (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH
RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF
THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION).
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT DATED DECEMBER 23, 2004 AND, BY ITS ACCEPTANCE
HEREOF, AGREES TO BE BOUND BY AND TO
24
COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
Any Debenture (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such
Debenture for exchange to the Debenture Registrar in accordance with the
provisions of this Section 2.05, be exchanged for a new Debenture or Debentures,
of like tenor and aggregate principal amount, which shall not bear the
restrictive legend required by this Section 2.05(c). If the Restricted Security
surrendered for exchange is represented by a Global Debenture bearing the legend
set forth in this Section 2.05(c), the principal amount of the legended Global
Debenture shall be reduced by the appropriate principal amount and the principal
amount of a Global Debenture without the legend set forth in this Section
2.05(c) shall be increased by an equal principal amount. If a Global Debenture
without the legend set forth in this Section 2.05(c) is not then outstanding,
the Company shall execute and the Trustee shall authenticate and deliver an
unlegended Global Debenture to the Depositary.
(d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Debenture shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or such Common Stock has been issued
upon conversion of Debentures that have been transferred pursuant to a
registration statement that has been declared effective under the Securities Act
or pursuant to Rule 144 under the Securities Act or any similar provision then
in force, or unless otherwise agreed by the Company in writing with written
notice thereof to the transfer agent:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE
144A")); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
25
SUCCESSOR PROVISION), ONLY (A) TO SCIENTIFIC GAMES CORPORATION (THE "ISSUER"),
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER) OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF
THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION).
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT DATED DECEMBER 23, 2004 AND, BY ITS ACCEPTANCE
HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH
REGISTRATION RIGHTS AGREEMENT.
Any such Common Stock as to which such restrictions on transfer
shall have expired in accordance with their terms or as to which the
conditions for removal of the foregoing legend set forth therein have been
satisfied may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures of the transfer
agent for the Common Stock, be exchanged for a new certificate or
certificates for a like number of shares of Common Stock, which shall not
bear the restrictive legend required by this Section 2.05(d).
(e) Any Debenture or Common Stock issued upon the conversion of a
Debenture that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Debentures or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Debenture (including any transfers between or among Agent Members or
beneficial holders of interests in any Global Debenture) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when
26
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In
case any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
shall authenticate and make available for delivery, a new Debenture, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case, the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee of satisfactory security or
indemnity and evidence, as described in the preceding paragraph, the Trustee
may authenticate any such substituted Debenture and make available for
delivery such Debenture. Upon the issuance of any substituted Debenture, the
Company may require the payment by the holder of a sum sufficient to cover
any tax, assessment or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any
Debenture which has matured or is about to mature or has been called for
redemption or has been tendered for repurchase upon a Fundamental Change (and
not withdrawn) or has been surrendered for repurchase on a Repurchase Date
(and not withdrawn) or is to be converted into cash or a combination of cash
and Common Stock (or other property pursuant to the terms of this Indenture),
as the case may be, shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substitute Debenture, pay or authorize
the payment of or convert or authorize the conversion of the same (without
surrender thereof except in the case of a mutilated Debenture), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company and to the Trustee such security or indemnity as may be required by
them to save each of them harmless from any loss, liability, cost or expense
caused by or in connection with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company,
the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence
to their satisfaction of the destruction, loss or theft of such Debenture and
of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of
this Section 2.06 by virtue of the fact that any Debenture is destroyed, lost
or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debenture shall be
found at any time, and shall be entitled to all the benefits of (but shall be
subject to all the limitations set forth in) this Indenture equally and
proportionately with any and all other Debentures duly issued hereunder. To
the extent permitted by law, all Debentures shall be held and owned upon the
express condition that the foregoing provisions are exclusive with respect to
the replacement or
27
payment or conversion or redemption or repurchase of mutilated, destroyed, lost
or stolen Debentures 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 or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.
Section 2.07. Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee shall,
upon the written request of the Company, authenticate and deliver temporary
Debentures (printed or lithographed). Temporary Debentures shall be issuable in
any authorized denomination, and substantially in the form of the Debentures in
certificated form, but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by the Company.
Every such temporary Debenture shall be executed by the Company and
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with the same effect, as the Debentures in certificated form.
Without unreasonable delay, the Company will execute and deliver to the Trustee
Debentures in certificated form and thereupon any or all temporary Debentures
may be surrendered in exchange therefor, at each office or agency maintained by
the Company pursuant to Section 5.02 and the Trustee shall authenticate and make
available for delivery in exchange for such temporary Debentures an equal
aggregate principal amount of Debentures in certificated form. Such exchange
shall be made by the Company at its own expense and without any charge therefor.
Until so exchanged, the temporary Debentures shall in all respects be entitled
to the same benefits and subject to the same limitations under this Indenture as
Debentures in certificated form authenticated and delivered hereunder.
Section 2.08. Cancellation of Debentures. All Debentures surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any Paying
Agent or any Debenture Registrar or any Conversion Agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption, repurchase or satisfaction of the
Indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Debentures
may use "CUSIP" or "ISIN" numbers and/or similar numbers (if then generally in
use), and, if so, the Trustee shall use "CUSIP" and/or "ISIN" numbers in notices
of redemption as a convenience to Debentureholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission
28
of such numbers. The Company will promptly notify the Trustee of any change in
the "CUSIP" and/or similar numbers.
ARTICLE III
Redemption and Repurchase of Debentures
---------------------------------------
Section 3.01. Company's Right to Redeem. Prior to June 1, 2010, the
Debentures will not be redeemable, except in accordance with Article IV. At any
time on or after June 1, 2010 and prior to Stated Maturity, the Company, at its
option, may redeem the Debentures, in whole or in part, in accordance with the
provisions of Section 3.02 and Section 3.03, on the applicable Redemption Date
for a redemption price in cash equal to 100% of the principal amount of the
Debentures to be redeemed (the "Redemption Price"), plus any accrued and unpaid
Interest on the Debentures to be redeemed to but excluding the Redemption Date.
Section 3.02. Notice of Optional Redemption; Selection of
Debentures. (a) In case the Company shall desire to exercise the right to redeem
all or, as the case may be, any part of the Debentures pursuant to Section 3.01,
it shall fix a date for redemption (the "Redemption Date") and it or, at its
written request received by the Trustee not fewer than 45 days prior (or such
shorter period of time as may be acceptable to the Trustee) to the Redemption
Date, the Trustee in the name of and at the expense of the Company, shall mail
or cause to be mailed a notice of such redemption (a "Redemption Notice") not
fewer than 30 nor more than 60 days prior to the Redemption Date to each holder
of Debentures so to be redeemed as a whole or in part at its last address as the
same appears on the Debenture Register; provided that if the Company shall give
such notice, it shall also give written notice of the Redemption Date to the
Trustee. Such mailing shall be by first class mail. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Debenture
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Debenture. Concurrently with the
mailing of any such Redemption Notice, the Company shall issue a press release
announcing such redemption, the form and content of which press release shall be
determined by the Company in its sole discretion. The failure to issue any such
press release or any defect therein shall not affect the validity of the
Redemption Notice or any of the proceedings for the redemption of any Debenture
called for redemption.
(b) Each such Redemption Notice shall specify the aggregate
principal amount of Debentures to be redeemed, the CUSIP, ISIN or similar number
or numbers of the Debentures being redeemed, the Redemption Date (which shall be
a Business Day), the Redemption Price at which Debentures are to be redeemed,
the place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that Interest accrued to the Redemption Date will
be paid as specified in said notice, and
29
that on and after said date Interest thereon or on the portion thereof to be
redeemed will cease to accrue (unless payment is prohibited by Article XVI or
XVIII of this Indenture). Such notice shall also state the current Conversion
Rate and the date on which the right to convert such Debentures or portions
thereof into cash or a combination of cash and Common Stock (or other property
pursuant to the terms of this Indenture) will expire. If fewer than all the
Debentures are to be redeemed, the Redemption Notice shall identify the
Debentures to be redeemed (including CUSIP, ISIN or similar numbers, if any). In
case any Debenture is to be redeemed in part only, the Redemption Notice shall
state the portion of the principal amount thereof to be redeemed and shall state
that, on and after the Redemption Date, upon surrender of such Debenture, a new
Debenture or Debentures in principal amount equal to the unredeemed portion
thereof will be issued.
(c) On or prior to the Redemption Date specified in the Redemption
Notice given as provided in this Section 3.02, the Company will deposit with the
Trustee or with one or more Paying Agents (or, if the Company is acting as its
own Paying Agent, set aside, segregate and hold in trust as provided in Section
5.04) an amount of money in immediately available funds sufficient to redeem on
the Redemption Date all the Debentures (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion) at the
appropriate Redemption Price plus accrued and unpaid Interest to but excluding
the Redemption Date; provided that if such payment is made on the Redemption
Date it must be received by the Trustee or Paying Agent, as the case may be, by
11:00 a.m., New York City time, on such date. The Company shall be entitled to
retain any interest, yield or gain on amounts deposited with the Trustee or any
Paying Agent pursuant to this Section 3.02(c) in excess of amounts required
hereunder to pay the Redemption Price and accrued Interest to, but excluding,
the Redemption Date. Subject to the last sentence of Section 8.05, if any
Debenture called for redemption is converted pursuant hereto prior to such
Redemption Date, any money deposited with the Trustee or any Paying Agent or so
segregated and held in trust for the redemption of such Debenture shall be paid
to the Company upon its written request, or, if then held by the Company, shall
be discharged from such trust. Whenever any Debentures are to be redeemed, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer than 45 days (or such shorter period of time as may be
acceptable to the Trustee) prior to the Redemption Date as to the aggregate
principal amount of Debentures to be redeemed.
(d) If less than all of the outstanding Debentures are to be
redeemed, the Trustee shall select the Debentures or portions thereof of the
Global Debenture or the Debentures in certificated form to be redeemed (in
principal amounts of $1,000 or integral multiples thereof) by lot, on a pro rata
basis or by another method the Trustee deems fair and appropriate, and in such
manner as complies with any applicable requirements of the principal national
securities exchange, if any, on which the Debentures are listed. If any
Debenture selected for partial redemption is submitted for conversion in part
after such selection and prior to redemption, the portion of such Debenture
submitted for conversion shall be deemed (so far as may be possible) to be from
the portion selected for redemption. The Debentures (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
30
notwithstanding that any such Debenture is submitted for conversion in part
before the mailing of the Redemption Notice.
Upon any redemption of less than all of the outstanding Debentures,
the Company and the Trustee may (but need not), solely for purposes of
determining the pro rata allocation among such Debentures as are unconverted and
outstanding at the time of redemption, treat as outstanding any Debentures
surrendered for conversion during the period of 15 days next preceding the
mailing of a Redemption Notice and may (but need not) treat as outstanding any
Debenture authenticated and delivered during such period in exchange for the
unconverted portion of any Debenture converted in part during such period.
Section 3.03. Payment of Debentures Called for Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into cash or a combination of cash and Common
Stock (or other property pursuant to the terms of this Indenture), as the case
may be, pursuant to the terms hereof, become due and payable on the Redemption
Date and at the place or places stated in such notice at the applicable
Redemption Price plus accrued and unpaid Interest to but excluding the
Redemption Date, and on and after the Redemption Date (unless the Company shall
default in the payment of such Debentures at the Redemption Price plus accrued
and unpaid Interest to but excluding the Redemption Date or unless such payment
is prohibited by the terms of Article XVI or XVIII) Interest on the Debentures
or portion of Debentures so called for redemption shall cease to accrue and,
after the close of business on the second Business Day immediately preceding the
Redemption Date (unless the Company shall default in the payment of such
Debentures at the Redemption Price plus accrued and unpaid Interest to but
excluding the Redemption Date or unless such payment is prohibited by the terms
of Article XVI or XVIII) such Debentures shall cease to be convertible and,
except as provided in Section 8.05, to be entitled to any benefit or security
under this Indenture, and the holders thereof shall have no right in respect of
such Debentures except the right to receive the Redemption Price plus accrued
and unpaid Interest to but excluding the Redemption Date. On presentation and
surrender of such Debentures at a place of payment in said notice specified, the
said Debentures or the specified portions thereof shall be paid and redeemed by
the Company at the applicable Redemption Price plus Interest accrued to, but
excluding, the Redemption Date; provided that if the applicable Redemption Date
is after a Regular Record Date and on or before the corresponding Interest
Payment Date, the Interest payable on such Interest Payment Date shall be paid
on the applicable Redemption Date to the holders of record of such Debentures on
the applicable Regular Record Date instead of the holders surrendering such
Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available
for delivery to the holder thereof, at the expense of the Company, a new
Debenture or Debentures, of authorized denominations, in principal amount
equal to the unredeemed portion of the Debentures so presented.
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Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any Redemption Notice during the continuance of a default
in payment of Interest on the Debentures. If any Debenture called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal shall, until paid or duly provided for, continue to bear Interest
at the rate borne by the Debenture, compounded semi-annually, and such
Debenture shall remain convertible until the principal and Interest shall
have been paid or duly provided for. The Company will notify all of the
holders if the Company redeems any of the Debentures.
Section 3.04. Repurchase of Debentures by the Company at Option of
Holders Upon a Fundamental Change. (a) If a Fundamental Change shall occur at
any time prior to Stated Maturity, each holder shall have the right, at such
holder's option, to require the Company to repurchase for cash any or all of
such holder's outstanding Debentures, or any portion of the principal amount
thereof that is equal to $1,000 or an integral multiple of $1,000, on the date
specified in the Fundamental Change Repurchase Notice, which date shall be no
more than 35 days after the date of the Fundamental Change Repurchase Notice
(subject to extension to comply with applicable law) (the "Fundamental Change
Repurchase Date"). The Company shall repurchase such Debentures at a price equal
to 100% of the principal amount thereof (the "Fundamental Change Repurchase
Price") plus any accrued and unpaid Interest to but excluding the Fundamental
Change Repurchase Date. If the applicable Fundamental Change Repurchase Date is
after a Regular Record Date and on or prior to the corresponding Interest
Payment Date, the Interest payable on such Interest Payment Date shall be paid
on such Interest Payment Date to the holders of record of such Debentures on the
applicable Regular Record Date instead of the holders surrendering such
Debentures for repurchase on such date.
(b) On or before the 30th day after the occurrence of a Fundamental
Change, the Company, or at its written request the Trustee in the name of and at
the expense of the Company (which request must be received by the Trustee at
least five Business Days prior to the date the Trustee is requested to give
notice as described below, unless the Trustee shall agree to a shorter period),
shall mail or cause to be mailed, by first class mail, to all holders of record
on such date, a notice (the "Fundamental Change Repurchase Notice") of the
occurrence of such Fundamental Change and of the repurchase right at the option
of the holders arising as a result thereof to each holder of Debentures at its
last address as the same appears on the Debenture Register, and to beneficial
owners as required by applicable law; provided that if the Company shall give
such notice, it shall also give written notice of the Fundamental Change to the
Trustee and Paying Agent, if other than the Trustee, at such time as it is
mailed to Debentureholders. Such notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. Each Fundamental Change Repurchase Notice shall
state, among other things:
(i) the events causing the Fundamental Change;
(ii) the date of the Fundamental Change;
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(iii) the last date on which a holder may exercise the repurchase
right;
(iv) the Fundamental Change Repurchase Price, the applicable
Conversion Rate at the time of such notice (and any applicable adjustments
to the Conversion Rate that will result from the Fundamental Change) and,
to the extent known at the time of such notice, the amount of Interest
that will be payable with respect to the Debentures on the Fundamental
Change Repurchase Date;
(v) the Fundamental Change Repurchase Date;
(vi) the name and address of the Paying Agent and the Conversion
Agent;
(vii) that Debentures as to which a Fundamental Change Repurchase
Election has been given by the holder may be converted only if the
Fundamental Change Repurchase Election has been withdrawn by the holder in
accordance with the terms of this Indenture; provided that the Debentures
are otherwise convertible in accordance with Section 15.01;
(viii) that the holder shall have the right to withdraw any
Debentures surrendered prior to the close of business on the Business Day
immediately preceding the Fundamental Change Repurchase Date (or any such
later time as may be required by applicable law);
(ix) a description of the procedures which a Debentureholder must
follow to exercise such repurchase right or to withdraw any surrendered
Debentures;
(x) the CUSIP, ISIN or similar number or numbers of the Debentures
(if then generally in use); and
(xi) briefly, the conversion rights of the holders of Debentures and
whether, at the time of such notice, the Debentures are eligible for
conversion.
No failure of the Company to give the foregoing notices and no
defect therein shall limit the Debentureholders' repurchase rights or affect
the validity of the proceedings for the repurchase of the Debentures pursuant
to this Section 3.04.
(c) Debentures shall be repurchased pursuant to this Section 3.04 at
the option of the holder upon:
(i) delivery to the Paying Agent by a holder of a duly completed
notice (a "Fundamental Change Repurchase Election") in the form set forth
on the reverse of the Debenture at any time prior to the close of business
on the Business Day immediately preceding the Fundamental Change
Repurchase Date (subject to extension to comply with applicable law)
stating:
(A) the relevant Fundamental Change Repurchase Date;
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(B) if certificated, the certificate numbers of the
Debentures which the holder shall deliver to be
repurchased;
(C) the portion of the principal amount of the Debentures
that the holder shall deliver to be repurchased, which
portion must be $1,000 or an integral multiple thereof;
and
(D) that such Debentures shall be repurchased as of the
Fundamental Change Repurchase Date pursuant to the terms
and conditions specified in the Debentures and in the
Indenture; and
(ii) delivery or book-entry transfer of the Debentures to the Paying
Agent simultaneously with or at any time after delivery of the Fundamental
Change Repurchase Election (together with all necessary endorsements) at
the office of the Paying Agent in the Borough of Manhattan, such delivery
or transfer being a condition to receipt by the holder of the Fundamental
Change Repurchase Price therefor; provided that such Fundamental Change
Repurchase Price shall be so paid pursuant to this Section 3.04 only if
the Debentures so delivered or transferred to the Paying Agent shall
conform in all respects to the description thereof in the related
Fundamental Change Repurchase Election. All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Debenture
for repurchase shall be determined by the Company, whose determination
shall be final and binding absent manifest error.
If the Debentures are not in certificated form, holders must provide
notice of their election in accordance with the appropriate procedures of the
Depositary.
Section 3.05. Repurchase of Debentures by the Company at Option of
Holders on Specified Dates. (a) On each of June 1, 2010, December 1, 2014 and
December 1, 2019 (each, a "Company Repurchase Date"), each holder shall have the
right, at such holder's option, to require the Company to repurchase for cash
all of such holder's Debentures, or any portion of the principal amount thereof
that is an integral multiple of $1,000. The Company shall repurchase such
Debentures at a price equal to 100% of the principal amount thereof (the
"Company Repurchase Price") plus any accrued and unpaid Interest to but
excluding the Company Repurchase Date; provided that accrued Interest will be
payable to the holder of record on the corresponding Regular Record Date.
(b) On or before the 22nd Business Day prior to each Company
Repurchase Date, the Company, or at its written request, the Trustee in the name
of and at the expense of the Company (which request must be received by the
Trustee at least five Business Days prior to the date the Trustee is requested
to give notice as described below, unless the Trustee shall agree to a shorter
period), shall mail or cause to be mailed, by first class mail, to all holders
of record on such date, a notice (the "Company Repurchase Notice") to each
holder of Debentures at its last address as the same appears on the Debenture
Register, and to beneficial owners as required by applicable law;
34
provided that if the Company shall give such notice, it shall also give written
notice to the Trustee and Paying Agent, if other than the Trustee, at such time
as it is mailed to Debentureholders. Such notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. Each Company Repurchase Notice shall state,
among other things:
(i) the Company Repurchase Price, the applicable Conversion Rate at
the time of such notice (and any applicable adjustments to the Conversion
Rate) and, to the extent known at the time of such notice, the amount of
Interest that will be payable with respect to the Debentures on the
Company Repurchase Date;
(ii) the Company Repurchase Date;
(iii) the last date on which a holder may exercise the repurchase
right;
(iv) the name and address of the Paying Agent and the Conversion
Agent;
(v) that Debentures as to which a Company Repurchase Election has
been given by the holder may be converted only if the election has been
withdrawn by the holder in accordance with the terms of this Indenture;
provided that the Debentures are otherwise convertible in accordance with
Section 15.01;
(vi) that the holder shall have the right to withdraw any Debentures
surrendered prior to the close of business on the Business Day immediately
preceding the Company Repurchase Date (or any such later time as may be
required by applicable law);
(vii) a description of the procedures which a Debentureholder must
follow to exercise such repurchase right or to withdraw any surrendered
Debentures;
(viii) the CUSIP, ISIN or similar number or numbers of the
Debentures (if then generally in use); and
(ix) briefly, the conversion rights of the holders of Debentures and
whether, at the time of such notice, the Debentures are eligible for
conversion.
No failure of the Company to give the foregoing notices and no
defect therein shall limit the Debentureholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.05.
(c) Debentures shall be repurchased pursuant to this Section 3.05 at
the option of the holder upon:
(i) delivery to the Paying Agent by a holder of a duly completed
notice (a "Company Repurchase Election") in the form set forth on the
reverse of the Debenture at any time from the opening of business on the
22nd Business Day
35
preceding the Company Repurchase Date until the close of business on the
date that is two Business Days prior to the Company Repurchase Date
stating:
(A) if certificated, the certificate numbers of the Debentures
which the holder shall deliver to be repurchased;
(B) the portion of the principal amount of the Debentures that
the holder shall deliver to be repurchased, which portion must be
$1,000 or an integral multiple thereof; and
(C) that such Debentures shall be repurchased as of the
Company Repurchase Date pursuant to the terms and conditions
specified in the Debentures and in the Indenture; and
(ii) delivery or book-entry transfer of the Debentures to the Paying
Agent simultaneously with or at any time after delivery of the Company
Repurchase Election (together with all necessary endorsements) at the
office of the Paying Agent in the Borough of Manhattan, such delivery or
transfer being a condition to receipt by the holder of the Company
Repurchase Price therefor; provided that such Company Repurchase Price
shall be so paid pursuant to this Section 3.05 only if the Debentures so
delivered or transferred to the Paying Agent shall conform in all respects
to the description thereof in the related Company Repurchase Election. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of any Debenture for repurchase shall be determined by the
Company, whose determination shall be final and binding absent manifest
error.
If the Debentures are not in certificated form, holders must
provide notice of their election in accordance with the appropriate
procedures of the Depositary.
Section 3.06. Conditions and Procedures for Repurchase at Option of
Holders. (a) The Company shall repurchase from the holder thereof, pursuant to
Section 3.04 or Section 3.05, a portion of a Debenture, if the principal amount
of such portion is $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to the repurchase of all of a Debenture also apply to the
repurchase of such portion of such Debenture. Upon presentation of any Debenture
repurchased in part only, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Debenture or Debentures, of any authorized
denomination, in aggregate principal amount equal to the portion of the
Debentures presented not repurchased.
(b) On or prior to a Repurchase Date, the Company will deposit with
the Paying Agent (or, if the Company is acting as its own Paying Agent, set
aside, segregate and hold in trust as provided in Section 5.04) an amount of
money sufficient to repurchase on the Repurchase Date all the Debentures or
portions thereof to be repurchased on such date at the Repurchase Price plus
accrued and unpaid Interest, if any,
36
to but excluding the Repurchase Date; provided that if such deposit is made on
the Repurchase Date it must be received by the Paying Agent by 11:00 a.m., New
York City time, on such date.
If the Paying Agent holds (or the Company, if acting as the Paying
Agent, segregates and holds in trust as provided in Section 5.04) money
sufficient to pay the aggregate Repurchase Price of all the Debentures or
portions thereof that are to be repurchased plus accrued and unpaid Interest, if
any, to but excluding the Repurchase Date (and such payment is not prohibited by
Article XVI or XVIII), then, on the Business Day following such date (i) such
Debentures will cease to be outstanding, (ii) Interest on such Debentures will
cease to accrue (whether or not book-entry transfer of the Debentures has been
made or the Debentures have been delivered to the Paying Agent) and (iii) all
other rights of the holders of such Debentures will terminate (other than the
right to receive the Repurchase Price plus accrued and unpaid Interest, if any,
to but excluding the Repurchase Date, if applicable, upon book-entry transfer or
delivery of the Debentures, as the case may be).
(c) Upon receipt by the Paying Agent of a Repurchase Election, the
holder of the Debenture in respect of which such Repurchase Election was given
shall (unless such Repurchase Election is validly withdrawn) thereafter be
entitled to receive solely the Repurchase Price plus accrued and unpaid
Interest, if any, to but excluding the Repurchase Date, if applicable, with
respect to such Debenture. Such Repurchase Price plus accrued and unpaid
Interest, if any, to but excluding the Repurchase Date, if applicable, shall be
paid to such holder, subject to receipt of funds and/or Debentures by the Paying
Agent, promptly (but in no event more than five Business Days) following the
later of (x) the Repurchase Date with respect to such Debenture (provided the
holder has satisfied the conditions in Section 3.04(c) or Section 3.05(c), as
applicable) and (y) the time of book-entry transfer or delivery, as the case may
be, of such Debenture to the Paying Agent by the holder thereof in the manner
required by Section 3.04(c) or Section 3.05(c), as applicable. Debentures in
respect of which a Repurchase Election has been given by the holder thereof may
not be converted pursuant to Article XV hereof on or after the date of the
delivery of such Repurchase Election unless such Repurchase Election has first
been validly withdrawn.
(d) Notwithstanding anything herein to the contrary, any holder
delivering to the office of the Paying Agent a Repurchase Election shall have
the right to withdraw such election, in whole or in part, at any time prior to
the close of business on the Business Day preceding the Repurchase Date (or any
such later time as may be required by applicable law) by delivery of a written
notice of withdrawal to the Paying Agent specifying:
(i) the principal amount of the Debenture with respect to which such
notice of withdrawal is being submitted,
(ii) the certificate number, if any, of the Debenture in respect of
which such notice of withdrawal is being submitted, or the appropriate
Depositary
37
information if the Debenture in respect of which such notice of withdrawal
is being submitted is represented by a Global Debenture, and
(iii) the principal amount, if any, of such Debenture which remains
subject to the original Repurchase Election and which has been or will be
delivered for repurchase by the Company.
If the Debentures are not in certificated form, holders must provide
notice of their withdrawal in accordance with the appropriate procedures of the
Depositary.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Repurchase Election or written notice of withdrawal thereof.
(e) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Debentures
in the event of a Fundamental Change or on any Company Repurchase Date. If then
required by applicable rules, the Company will file a Schedule TO or any other
schedule required in connection with any offer by the Company to repurchase
Debentures.
(f) There shall be no repurchase of any Debentures pursuant to
Section 3.04 or Section 3.05 if there has occurred at any time prior to, and is
continuing on, the Repurchase Date an Event of Default (other than an Event of
Default that is cured by the payment of the Repurchase Price with respect to
such Debentures). The Paying Agent will promptly return to the respective
holders thereof any Debentures (x) with respect to which a Repurchase Election
has been withdrawn in compliance with this Indenture, or (y) held by it during
the continuance of an Event of Default (other than a default in the payment of
the Repurchase Price with respect to such Debentures) in which case, upon such
return, the Repurchase Election with respect thereto shall be deemed to have
been withdrawn.
(g) The Paying Agent shall return to the Company any cash that
remains unclaimed as provided in Section 13.03, together with interest, if any,
thereon, held by them for the payment of the Repurchase Price; provided that to
the extent that the aggregate amount of cash deposited by the Company pursuant
to Section 3.06(b) exceeds the aggregate Repurchase Price of the Debentures or
portions thereof which the Company is obligated to purchase as of the Repurchase
Date then, unless otherwise agreed in writing with the Company, promptly after
the Business Day following the Repurchase Date, the Paying Agent shall return
any such excess to the Company together with interest, if any, thereon.
(h) In the case of a reclassification, change, consolidation,
merger, binding share exchange, combination, sale or conveyance to which Section
15.06 applies, in which the Common Stock of the Company is changed or exchanged
as a result into the right to receive cash, securities or other property, which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon
38
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 50% of the aggregate fair market value
of such cash, securities or other property (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture (accompanied by an Opinion of Counsel that such supplemental indenture
complies with the Trust Indenture Act as in force at the date of execution of
such supplemental indenture) modifying the provisions of this Indenture relating
to the right of holders of the Debentures to cause the Company to repurchase the
Debentures following a Fundamental Change, including without limitation the
applicable provisions of this Article III and the definition of Fundamental
Change, as appropriate, as determined in good faith by the Company (which
determination shall be conclusive and binding), to make such provisions apply to
such other Person if different from the Company (in lieu of the Company).
(i) In the event that at the time of a Fundamental Change or Company
Repurchase Date, as the case may be, the terms of any Senior Debt of the Company
(including the Credit Agreement) restrict or prohibit the repurchase of
Debentures pursuant to Section 3.04 or Section 3.05, as the case may be, then
prior to the mailing of the notice to holders provided for in Section 3.04(b) or
3.05(b), as the case may be, but in any event within 30 days following any
Fundamental Change or 30 days in advance of such Company Repurchase Date, as the
case may be, the Company shall (1) repay in full all such Senior Debt or (2)
obtain the requisite consents under the agreements governing such Senior Debt to
permit the repurchase of the Debentures as provided for in Section 3.04 or
Section 3.05, as the case may be.
ARTICLE IV
Mandatory Disposition Pursuant to Gaming Laws
---------------------------------------------
(a) If a holder or a beneficial owner of a Debenture is required by
any Gaming Authority to be found suitable to hold the Debentures or a beneficial
interest therein under applicable gaming laws, such holder or beneficial owner,
as the case may be, shall apply for a finding of suitability within the time
period required by such Gaming Authority.
(b) If a holder or beneficial owner of a Debenture is required to be
found suitable to hold the Debentures or beneficial interest therein as provided
in clause (a) and is not found suitable by the applicable Gaming Authority,
whether as a result of the failure to apply for such finding of suitability
within the required time period or a finding of unsuitability, such holder or
beneficial owner, as the case may be, shall, to the extent required by
applicable gaming law, dispose of its Debentures or beneficial interest therein
39
within 30 days following such failure or finding, or within such other time
period as may be prescribed by the applicable Gaming Authority, whichever is
less.
(c) If the holder or beneficial owner, as the case may be, fails to
dispose of its Debentures or beneficial interest therein as provided in clause
(b), the Company may, at its option, redeem such Debentures at, subject to
applicable law, (1) the lower of (x) 100% of the principal amount thereof,
together with accrued and unpaid Interest to the date of the failure to apply or
the finding of unsuitability by a Gaming Authority, as the case may be, and (y)
the amount that such holder or beneficial owner paid for the Debentures or (2)
such other amount as may be determined by the applicable Gaming Authority. The
Company shall give 30 days prior written notice (or such other time period as
may be prescribed by the applicable Gaming Authority, whichever is less) to the
holder or beneficial owner of its election to redeem the Debentures in the event
such holder or beneficial owner, as the case may be, fails to dispose of its
Debentures in accordance with clause (b), which notice shall set forth the
redemption price therefor.
(d) The Company shall notify the Trustee in writing of any
redemption pursuant to clause (c) as soon as reasonably practicable. The Company
shall not be responsible for any costs or expenses incurred by any such holder
or beneficial owner of a Debenture in connection with any such application or
investigation for a finding of suitability.
ARTICLE V
Particular Covenants of the Company
Section 5.01. Payment of Principal and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of (including any Redemption Price or Repurchase Price pursuant to
Article III) and Interest on each of the Debentures at the places, at the
respective times and in the manner provided herein and in the Debentures.
Section 5.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, The City of New York,
where the Debentures may be surrendered for registration of transfer or exchange
or for presentation for payment or for conversion, redemption or repurchase and
where notices and demands to or upon the Company in respect of the Debentures
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.
40
The Company may also from time to time designate co-registrars and
one or more offices or agencies where the Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as Paying Agent,
Debenture Registrar, Custodian and Conversion Agent, and each of the Corporate
Trust Office and the office or agency of the Trustee in the Borough of Manhattan
shall be considered as one such office or agency of the Company for each of the
aforesaid purposes.
So long as the Trustee is the Debenture Registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in Section 8.10
and the third paragraph of Section 8.11. If co-registrars have been
appointed in accordance with this Section, the Trustee shall mail such
notices only to the Company and the holders of Debentures it can identify
from its records.
Section 5.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
Section 5.04. Provisions as to Paying Agent. (a) If the Company
shall appoint a Paying Agent other than the Trustee, the Company will cause such
Paying Agent to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section 5.04:
(i) that it will hold all sums held by it as such agent for the
payment of the principal of or Interest on the Debentures (whether such
sums have been paid to it by the Company or by any other obligor on the
Debentures) in trust for the benefit of the holders of the Debentures;
(ii) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Debentures) to make any payment of
the principal of or Interest on the Debentures when the same shall be due
and payable; and
(iii) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the Trustee
all sums so held in trust.
The Company shall, on or before each due date of the principal of or
Interest on the Debentures, deposit with the Paying Agent a sum (in funds which
are immediately available on the due date for such payment) sufficient to pay
such principal or Interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take such action;
provided that if such deposit is made
41
on the due date, such deposit shall be received by the Paying Agent by 10:00
a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal of or Interest on the Debentures, set
aside, segregate and hold in trust for the benefit of the holders of the
Debentures a sum sufficient to pay such principal or Interest so becoming due
and will promptly notify the Trustee of any failure to take such action and of
any failure by the Company (or any other obligor under the Debentures) to make
any payment of the principal of or Interest on the Debentures when the same
shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding,
the Company 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 Company or any Paying Agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any Paying Agent
to the Trustee, the Company or such Paying Agent shall be released from all
further liability with respect to such sums.
(d) Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.02 and 13.03.
The Trustee shall not be responsible for the actions of any other
Paying Agents (including the Company if acting as its own Paying Agent) and
shall have no control of any funds held by such other Paying Agents.
Section 5.05. Existence. Subject to Article XII, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Debentureholders.
Section 5.06. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time
42
to enable such holder or beneficial holder to sell its Debentures or Common
Stock without registration under the Securities Act within the limitation of the
exemption provided by Rule 144A, as such Rule may be amended from time to time.
Upon the request of any holder or any beneficial holder of the Debentures or
such Common Stock, the Company will deliver to such holder a written statement
as to whether it has complied with such requirements.
Section 5.07. Stay, Extension and Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
Interest on the Debentures as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 5.08. Compliance Certificate. The Company shall deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company
(which fiscal year of the Company is presently the twelve calendar months ending
December 31), a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
The Company will deliver to the Trustee, promptly upon becoming
aware of (i) any default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or (ii) any Event of
Default, an Officers' Certificate specifying with particularity such default
or Event of Default and further stating what action the Company has taken, is
taking or proposes to take with respect thereto.
Any notice required to be given under this Section 5.08 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust
Office.
ARTICLE VI
Debentureholders' Lists and Reports by the Company and the Trustee
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Section 6.01. Debentureholders' Lists. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee,
semiannually, not more
43
than 15 days after each May 15 and November 15 in each year beginning with May
15, 2005, and at such other times as the Trustee may request in writing, within
30 days after receipt by the Company of any such request (or such lesser time as
the Trustee may reasonably request in order to enable it to timely provide any
notice to be provided by it hereunder), a list in such form as the Trustee may
reasonably require of the names and addresses of the holders of Debentures as of
a date not more than 15 days (or such other date as the Trustee may reasonably
request in order to so provide any such notices) prior to the time such
information is furnished, except that no such list need be furnished by the
Company to the Trustee so long as the Trustee is acting as the sole Debenture
Registrar.
Section 6.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 6.01 or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 6.01 upon receipt of a new list so
furnished.
(b) The rights of Debentureholders to communicate with other holders
of Debentures with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 6.03. Reports by Trustee. (a) Within 60 days after June 1 of
each year commencing with the year 2005, the Trustee shall transmit to holders
of Debentures such reports dated as of June 1 of the year in which such reports
are made concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. In the event that no events have occurred under the
applicable sections of the Trust Indenture Act, the Trustee shall be under no
duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission to
holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system, if any, upon which the Debentures are listed and
with the Company. The Company will promptly notify the Trustee in writing when
the Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.
Section 6.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under
44
the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
ARTICLE VII
Remedies of the Trustee and Debentureholders on an Event Of Default
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Section 7.01. Events of Default. In case one or more of the
following events (each, an "Event 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:
(a) default in the payment of the principal of any of the
Debentures as and when the same shall become due and payable
either at Stated Maturity or in connection with any redemption
or repurchase, in each case pursuant to Article III, or
otherwise; or
(b) default in the payment of any installment of Interest upon any
of the Debentures as and when the same shall become due and
payable, and continuance of such default for a period of 30
days; or
(c) failure to provide notice of the occurrence of a Fundamental
Change in accordance with Section 3.04; or
(d) default in the Company's obligation to convert the Debentures
into cash or a combination of cash and Common Stock
(including, if applicable, Additional Common Stock) or other
applicable property upon the exercise of a holder's rights
pursuant to Article XV and continuation of such default for a
period of 10 Business Days; or
(e) failure on the part of the Company duly to observe or perform
any of the other covenants or agreements on the part of the
Company in the Debentures or in this Indenture (other than a
covenant or agreement a default in whose performance or whose
breach is elsewhere in this Section 7.01 specifically dealt
45
with) continued for a period of 60 days after the date on
which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the
Trustee, or to the Company and a Responsible Officer of the
Trustee by the holders of at least 25% in aggregate principal
amount of the Debentures at the time outstanding, determined
in accordance with Section 9.04; or
(f) default with respect to the Company's or any of its
Significant Subsidiaries' Indebtedness having a principal
amount then outstanding, individually or in the aggregate, of
at least $25.0 million, whether such Indebtedness now exists
or is hereafter incurred, if not cured, rescinded or annulled
within 10 days after written notice shall have been given to
the Company by the Trustee, or to the Company and a
Responsible Officer of the Trustee by the holders of at least
25% in aggregate principal amount of the Debentures at the
time outstanding, determined in accordance with Section 9.04,
which default or defaults:
(i) shall have resulted in the acceleration of
the final stated maturity of such Indebtedness; or
(ii) shall constitute the failure to pay such
Indebtedness at the final stated maturity thereof
(after expiration of any applicable grace period); or
(g) any Guarantee ceases to be in full force and effect (other
than in accordance with the terms of this Indenture) or any
Guarantor denies or disaffirms its obligations under any
Guarantee;
(h) rendering of any final judgment or final judgments for the
payment of money in excess (net of amounts covered by
third-party insurance with insurance carriers who in the
reasonable judgment of the Board of Directors are creditworthy
and who have not disclaimed liability with respect to such
judgment or judgments) of $25.0 million against the Company or
any of its Significant Subsidiaries that is not discharged for
any period of 60 consecutive days during which a stay of
enforcement shall not be in effect; or
(i) commencement by the Company or any Significant Subsidiary of a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to such Person or
its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of the Company or any Significant Subsidiary or any
substantial part of the property of the Company or any
Significant Subsidiary, or consent by the Company or any
Significant Subsidiary to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the
Company or any Significant Subsidiary, or general assignment
by the Company or any Significant Subsidiary for the benefit
of creditors, or failure of the
46
Company or any Significant Subsidiary generally to pay its
debts as they become due; or
(j) commencement of an involuntary case or other proceeding
against the Company or any Significant Subsidiary seeking
liquidation, reorganization or other relief with respect to
such Person or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official of the Company or any Significant
Subsidiary or any substantial part of the property of the
Company or any Significant Subsidiary, and such involuntary
case or other proceeding shall remain undismissed and unstayed
for a period of 60 consecutive days;
then, and in each and every such case (other than an Event of Default
specified in Section 7.01(i) or 7.01(j)), unless the principal of all of the
Debentures shall have already become due and payable, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Debentures then outstanding hereunder determined in accordance with Section
9.04, by notice in writing to the Company (and to the Trustee if given by
Debentureholders), may declare the principal of all the Debentures and the
Interest accrued thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debentures contained to the contrary
notwithstanding. If an Event of Default specified in Section 7.01(i) or
7.01(j) occurs, the principal of all the Debentures and the Interest accrued
thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Debentures shall
have been so declared due and payable, and before any judgment or decree for
the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee
a sum sufficient to pay all matured installments of Interest upon all
Debentures and the principal of any and all Debentures which shall have
become due otherwise than by acceleration (with interest on overdue
installments of Interest (to the extent that payment of such interest is
enforceable under applicable law) and on such principal at the rate borne by
the Debentures, to the date of such payment or deposit) and amounts due to
the Trustee pursuant to Section 8.06 (and such deposit or payment therefrom
is not prohibited by Article XVI or XVIII), and if any and all defaults under
this Indenture, other than the nonpayment of principal of and accrued
Interest on Debentures which shall have become due by acceleration, shall
have been cured or waived pursuant to Section 7.07, then and in every such
case the holders of a majority in aggregate principal amount of the
Debentures then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults or Events of Default 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 Event of
Default, or shall impair any right consequent thereon. The Company shall
notify in writing a Responsible Officer of the Trustee, promptly upon
becoming aware thereof, of any Event of Default.
47
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such waiver or rescission and annulment or for any other
reason or shall have been determined adversely to the Trustee, then and in
every such case the Company, the holders of Debentures, and the Trustee shall
be restored respectively to their several positions and rights hereunder, and
all rights, remedies and powers of the Company, the holders of Debentures,
and the Trustee shall continue as though no such proceeding had been taken.
Section 7.02. Payments of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of Interest upon any of the Debentures as and when the same shall
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 the principal of
any of the Debentures as and when the same shall have become due and payable,
whether at maturity of the Debentures or in connection with any redemption,
repurchase, acceleration, declaration or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Debentures, the whole amount that then shall have become due and payable on
all such Debentures for principal or Interest, as the case may be, with interest
upon the overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of Interest at
the rate borne by the Debentures, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 8.06. Until such demand by the
Trustee, the Company may pay the principal of and Interest on the Debentures to
the registered holders, whether or not the Debentures are overdue.
In case the Company 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 actions or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable 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 Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
48
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and Interest owing and unpaid in respect of the Debentures, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Debentureholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debentures, its or their creditors, or its
or their property, and to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute the same after the
deduction of any amounts due the Trustee under Section 8.06, and to take any
other action with respect to such claims, including participating as a member of
any official committee of creditors, as it reasonably deems necessary or
advisable, and, unless prohibited by law or applicable regulations, and any
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture,
or under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.
In any proceedings brought by the Trustee (and in 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 Debentures, and it shall not be necessary to make any holders
of the Debentures parties to any such proceedings.
Section 7.03. Application of Monies Collected by Trustee. Any monies
or other property collected by the Trustee pursuant to this Article VII, or any
monies or other property otherwise distributable in respect of the Company's
obligations under this Indenture, shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such monies, upon
presentation of the several
49
Debentures, and stamping thereon the payment, if only partially paid, and upon
surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee (including
any predecessor Trustee) under Section 8.06;
SECOND: To holders of Senior Debt of the Company to the extent
required by Article XVI and to holders of Guarantor Senior Debt to the
extent required by Article XVIII;
THIRD: In case the principal of the outstanding Debentures shall
not have become due and be unpaid, to the payment of Interest on the
Debentures 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 rate borne by the Debentures, such payments to be made
ratably to the Persons entitled thereto;
FOURTH: In case the principal of the outstanding Debentures
shall have become due, by declaration or otherwise, and be unpaid, to
the payment of the whole amount then owing and unpaid upon the
Debentures for principal and Interest, with interest on the overdue
principal and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of Interest at the rate borne by
the Debentures, and in case such monies shall be insufficient to pay in
full the whole amounts so due and unpaid upon the Debentures, 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 Debenture over any other Debenture, ratably to the aggregate
of such principal and accrued and unpaid Interest; and
FIFTH: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto.
Section 7.04. Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by reference to any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, 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 an Event 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 Debentures then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable security or 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
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request shall have been given
50
to the Trustee pursuant to Section 7.07; it being understood and intended, and
being expressly covenanted by the taker and holder of every Debenture with every
other taker and holder and the Trustee, that no one or more holders of
Debentures shall have any right in any manner whatever by virtue of or by
reference to any provision of this Indenture to affect, disturb or prejudice the
rights of any other holder of Debentures, 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 Debentures (except as otherwise
provided herein). For the protection and enforcement of this Section 7.04, each
and every Debentureholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Debenture, the right of any holder of any Debenture to
receive payment of the principal of (including any Redemption Price or
Repurchase Price pursuant to Article III) and accrued Interest on such
Debenture on or after the respective due dates expressed in such Debenture,
or to institute suit for the enforcement of any such payment on or after such
respective dates against the Company, shall not be impaired or affected
without the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either
the Trustee or the holder of any other Debenture, in its own behalf and for
its own benefit, may enforce, and may institute and maintain any proceeding
suitable to enforce, its rights of conversion as provided herein.
Section 7.05. Proceedings by Trustee. In case of an Event of
Default, 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 are necessary to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding 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 7.06. Remedies Cumulative and Continuing. Except as provided
in Section 2.06, all powers and remedies given by this Article VII to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or 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 default or any acquiescence therein, and, subject to the
provisions of Section 7.04, every power and remedy given by this Article VII or
by
51
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders. Upon provision of indemnity reasonably
satisfactory to the Trustee, the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such direction
and (c) the Trustee may decline to take any action that would benefit some
Debentureholders to the detriment of other Debentureholders. The holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
determined in accordance with Section 9.04 may, on behalf of the holders of all
of the Debentures, waive any past default or Event of Default hereunder and its
consequences except (i) a default in the payment of Interest on, or the
principal of, the Debentures, (ii) a failure by the Company to convert any
Debentures into cash or a combination of cash and Common Stock, as the case may
be, or, as applicable, such other property into which such Debentures may become
convertible pursuant to this Indenture, (iii) a default in the payment of the
Redemption Price pursuant to Section 3.03, (iv) a default in the payment of the
Fundamental Change Repurchase Price pursuant to Section 3.04 or Company
Repurchase Price pursuant to Section 3.05 or (v) a default in respect of a
covenant or provision hereof which under Article XI cannot be modified or
amended without the consent of the holders of each or all Debentures then
outstanding or affected thereby. Upon any such waiver, the Company, the Trustee
and the holders of the Debentures shall be restored to their former positions
and rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.07, said default or Event of Default shall for all purposes of
the Debentures and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
Section 7.08. Notice of Defaults. The Trustee shall, within 90 days
after a Responsible Officer of the Trustee has knowledge of the occurrence of a
default, mail to all Debentureholders, as the names and addresses of such
holders appear upon the Debenture Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that except in the case of default in the
payment of the principal of or Interest on any of the Debentures, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Debentureholders. For the purpose of this Section 7.08, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
52
Section 7.09. Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any Debenture by its acceptance thereof
shall be deemed to have agreed, that any court may, in its discretion, require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that the provisions
of this Section 7.09 (to the extent permitted by law) shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Debentureholder,
or group of Debentureholders, holding in the aggregate more than 10% in
principal amount of the Debentures at the time outstanding determined in
accordance with Section 9.04, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or Interest on any
Debenture on or after the due date expressed in such Debenture or to any suit
for the enforcement of the right to convert any Debenture in accordance with the
provisions of Article XV.
ARTICLE VIII
The Trustee
-----------
Section 8.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, 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 person
would exercise or use under the circumstances in the conduct of such person's
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 willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all 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
Trust Indenture Act, 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 and the Trust Indenture Act against
the Trustee; and
53
(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
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions 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 Officers of the Trustee, unless
the Trustee was negligent in ascertaining the pertinent facts;
(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 written
direction of the holders of not less than a majority in principal amount
of the Debentures at the time outstanding determined as provided in
Section 9.04 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;
(d) the Trustee shall not be liable in respect of any payment (as to
the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company, any Guarantor or
any Paying Agent or any records maintained by any co-registrar with
respect to the Debentures; and
(e) if any party fails to deliver a notice relating to an event the
fact of which, pursuant to this Indenture, requires notice to be sent to
the Trustee, the Trustee may conclusively rely on its failure to receive
such notice as reason to act as if no such event occurred.
The Trustee shall not be deemed to have knowledge or notice of any
default (as defined in Section 7.08) or Event of Default hereunder unless a
Responsible Officer of the Trustee shall have received at the Corporate Trust
Office written notice of such default or Event of Default from the Company or
the holders of at least 10% in aggregate principal amount of the Debentures and
such notice refers to such default or Event of Default, the Debentures and the
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 there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
54
The Trustee shall cooperate with any Gaming Authority of any
jurisdiction in which the Company or any of its Subsidiaries conducts or
proposes to conduct gaming and shall produce any document or information as
any such Gaming Authority may request in writing; provided that the Trustee
has copies of any such document or knowledge of any such information as any
such Gaming Authority may request.
Whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section
8.01.
Section 8.02. Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 8.01:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note, coupon or
other paper or document (whether in its original or facsimile form)
believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company or any
Guarantor 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 Company;
(c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or omitted 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
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of
this Indenture, unless such Debentureholders shall have offered to the
Trustee reasonable security or indemnity satisfactory to it against the
costs, expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company and the Guarantors, personally or by agent or
attorney;
55
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder;
(g) the Trustee shall not be liable for any action taken, suffered
or omitted to be taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder;
(i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered
and not superseded; and
(j) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action which it takes or omits to take in good
faith in reliance on the Officers' Certificate or Opinion of Counsel.
Section 8.03. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures. The Trustee, any Paying Agent, any Conversion Agent or the
Debenture Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were not
Trustee, Paying Agent, Conversion Agent or Debenture Registrar.
Section 8.05. Monies to be Held in Trust. Subject to the provisions
of Section 13.03, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money
56
received by it hereunder except as may be agreed in writing from time to time by
the Company and the Trustee.
Section 8.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the reasonable out-of-pocket expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence, willful misconduct or bad faith. The Company also covenants to
indemnify the Trustee and any predecessor Trustee (or any officer, director or
employee of the Trustee), in any capacity under this Indenture and its agents
for, and to hold them harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of the
Trustee) incurred without negligence, willful misconduct or bad faith on the
part of the Trustee or such officers, directors, employees and agent, as the
case may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses (including reasonable attorneys' fees and expenses) of
defending themselves against any claim (whether asserted by the Company, any
holder or any other Person) of liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligations of the
Company under this Section 8.06 to compensate or indemnify the Trustee and to
pay or reimburse the Trustee for expenses (including reasonable attorneys' fees
and expenses), disbursements and advances shall be secured by a lien prior to
that of the Debentures 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 Debentures. The obligation of the Company under this Section shall
survive the resignation or removal of the Trustee and the satisfaction and
discharge or termination of this Indenture.
When the Trustee and its agents incur expenses or render services
after an Event of Default specified in Section 7.01(i) or Section 7.01(j)
with respect to the Company occurs, the expenses (including reasonable
attorneys' fees and expenses) and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
Section 8.07. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
57
Section 8.08. Conflicting Interests of Trustee. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
Section 8.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10. Resignation or Removal of Trustee. (a) The Trustee may
at any time resign by giving written notice of such resignation to the Company
and to the holders of Debentures. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment 60 days after the mailing of such notice of resignation to
the Debentureholders, the resigning Trustee may, upon 10 Business Days' notice
to the Company and the Debentureholders, appoint a successor identified in such
notice or may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor trustee, or any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at least six
months may, subject to the provisions of Section 7.09, 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 Section 8.08 after written
request therefor by the Company or by any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder; or
58
(iii) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 7.09, any Debentureholder who has been a bona fide
holder of a Debenture or Debentures 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; provided that if no successor Trustee shall have been
appointed and have accepted appointment 60 days after either the Company or
the Debentureholders has removed the Trustee, or the Trustee resigns, the
Trustee so removed may petition, at the expense of the Company, any court of
competent jurisdiction for an 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 principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within 10 days after notice to the Company of such nomination,
the Company objects thereto, in which case the Trustee so removed or any
Debentureholder, or if such Trustee so removed or any Debentureholder fails to
act, the Company, upon the terms and conditions and otherwise as in Section 8.10
provided, may petition any court of competent jurisdiction for an appointment of
a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company 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 the 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 Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company 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. Any
59
trustee ceasing to act shall, nevertheless, retain a lien upon all property and
funds held or collected by such trustee as such, except for funds held in trust
for the benefit of holders of particular Debentures, to secure any amounts then
due it pursuant to the provisions of Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.08 and be eligible under
the provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.11, the Company (or the former trustee, at the written
direction of the Company) shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Debentures at their
addresses as they shall appear on the Debenture Register. If the Company
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 Company.
Section 8.12. Succession by Merger. Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee (including any trust created by
this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any Person succeeding to all or
substantially all of the corporate trust business of the Trustee, such Person
shall be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09.
In case at the time such successor to the Trustee shall succeed
to the trusts created by this Indenture, any of the Debentures 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 Debentures so authenticated; and in case at that time any of the
Debentures shall not have been authenticated, any successor to the Trustee
may authenticate such Debentures in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided
in the Debentures or in this Indenture; provided that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate
Debentures in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
60
ARTICLE IX
The Debentureholders
--------------------
Section 9.01. Action by Debentureholders. Whenever in this Indenture
it is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article X, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than 15 days prior to the date of commencement of
solicitation of such action.
Section 9.02. Proof of Execution by Debentureholders. Subject to the
provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made 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 Debentures shall be proved by the Debenture Register or
by a certificate of the Debenture Registrar.
The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 10.06.
Section 9.03. Who Are Deemed Absolute Owners. The Company, the
Guarantors, the Trustee, any Paying Agent, any Conversion Agent and any
Debenture Registrar may deem the Person in whose name such Debenture shall be
registered upon the Debenture Register to be, and may treat it as, the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notation of ownership or other writing thereon made by any
Person other than the Company or any Debenture Registrar) for the purpose of
receiving payment of or on account of the principal of and Interest on such
Debenture, for conversion of such Debenture and for all other purposes; and none
of the Company, the Guarantors, the Trustee, any Paying Agent, any Conversion
Agent or any Debenture Registrar shall be affected by any notice to the
contrary.
Section 9.04. Company-owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
61
Debentures shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 9.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described Persons, and, subject to Section 8.01, 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 Debentures not listed therein are outstanding
for the purpose of any such determination.
Section 9.05. Revocation of Consents, Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE X
Meetings of Debentureholders
----------------------------
Section 10.01. Purpose of Meetings. A meeting of Debentureholders
may be called at any time and from time to time pursuant to the provisions of
this Article X for any of the following purposes:
(i) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and
its consequences, or to take any other action authorized to be taken by
Debentureholders pursuant to any of the provisions of Article VII;
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(ii) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VIII;
(iii) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(iv) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the
Debentures under any other provision of this Indenture or under applicable
law.
Section 10.02. Call of Meetings by Trustee. The Trustee may at any
time call a meeting of Debentureholders to take any action specified in Section
10.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 9.01,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than 20 nor more than 90 days prior to the date
fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if
the holders of all Debentures then outstanding are present in person or by
proxy or if notice is waived before or after the meeting by the holders of
all Debentures outstanding, and if the Company and the Trustee are either
present by duly authorized representatives or have, before or after the
meeting, waived notice.
Section 10.03. Call of Meetings by Company or Debentureholders. In
case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Debentures then outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Debentureholders may determine the time and the place
for such meeting and may call such meeting to take any action authorized in
Section 10.01, by mailing notice thereof as provided in Section 10.02.
Section 10.04. Qualifications for Voting. To be entitled to vote at
any meeting of Debentureholders a Person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a Person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures on the record date pertaining to such meeting. The only Persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
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Section 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called
by the Company or by Debentureholders as provided in Section 10.03, in which
case the Company or the Debentureholders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the
holders of a majority in principal amount of the Debentures represented at
the meeting and entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no
vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Debentures held by him or instruments in writing as
aforesaid duly designating him as the proxy to vote on behalf of other
Debentureholders. Any meeting of Debentureholders duly called pursuant to
the provisions of Section 10.02 or 10.03 may be adjourned from time to time
by the holders of a majority of the aggregate principal amount of Debentures
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 10.02. The record
shall show the principal amount of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
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Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
Section 10.07. No Delay of Rights by Meeting. Nothing contained in
this Article X shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE XI
Supplemental Indentures
-----------------------
Section 11.01. Supplemental Indentures Without Consent of
Debentureholders. The Company and the Guarantors, when authorized by the
resolutions of the Board of Directors, and the Trustee 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 make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 15.06 or the
repurchase obligations of the Company pursuant to the requirements of
Section 3.06(h).
(b) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Debentures, any property or assets;
(c) to add a Guarantee of the Debentures by any Person;
(d) to evidence the assumption by a successor Person of the
obligations of the Company pursuant to Article XII;
(e) to add to the covenants of the Company such further covenants
for the benefit of the holders of Debentures, and to make the occurrence,
or the occurrence and continuance, of a default in any such additional
covenants a default or 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 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 default or may limit the remedies available to the Trustee upon such
default;
(f) to cure any ambiguity or correct or supplement any inconsistent
or otherwise defective provision contained in this Indenture or make any
other
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provision with respect to matters or questions arising under this
Indenture which the Company may deem necessary or desirable and which
shall not be inconsistent with provisions of this Indenture, provided that
such modification or amendment does not, in the good faith opinion of the
Board of Directors, adversely affect the interests of the holders of
Debentures in any material respect;
(g) to evidence the acceptance of appointment hereunder by a
successor Trustee with respect to the Debentures;
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to qualify or maintain the
qualification of this Indenture under the Trust Indenture Act, or under
any similar federal statute hereafter enacted; or
(i) to make any changes or modifications necessary in connection
with the registration of the Debentures under the Securities Act as
contemplated in the Registration Rights Agreement; provided that such
change or modification does not, in the good faith opinion of the Board of
Directors, adversely affect the interests of the holders of Debentures in
any material respect; and
(j) to add or modify any other provisions with respect to matters or
questions arising under this Indenture which the Company and the Trustee
may deem necessary or desirable and which will not adversely affect the
interests of the holders of Debentures.
An amendment under this Section may not make any change that
adversely affects the rights under Article XVI or XVIII of any holder of
Senior Debt or Guarantor Senior Debt of a Guarantor then outstanding unless
the holders of such Senior Debt or Guarantor Senior Debt (or their
Representative) consent to such change.
Upon the written request of the Company, accompanied by a copy of
the resolutions of the Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of any supplemental indenture,
the Trustee is hereby authorized to join with the Company and the Guarantors
in the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations that may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder,
but the Trustee shall not be obligated to, but may in its discretion, enter
into any supplemental indenture that affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 11.01 may be executed by the Company, the Guarantors and the Trustee
without the consent of the holders of any of the Debentures at the time
outstanding, notwithstanding any of the provisions of Section 11.02.
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Notwithstanding any other provision of the Indenture or the
Debentures, the Registration Rights Agreement and the obligation to pay
Additional Amounts thereunder may be amended, modified or waived in
accordance with the provisions of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of
Debentureholders. With the consent (evidenced as provided in Article IX) of the
holders of at least a majority in aggregate principal amount of the Debentures
at the time outstanding, the Company and the Guarantors, when authorized by the
resolutions of the 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 any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided
that no such supplemental indenture shall (i) extend the Stated Maturity of any
Debenture, or reduce the rate or extend the time for payment of Interest
thereon, or reduce the principal amount thereof, or reduce any amount payable on
redemption or repurchase thereof, or impair the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
Interest thereon payable in any coin or currency other than that provided in the
Debentures, or affect the obligation of the Company to redeem any Debenture on a
Redemption Date in a manner adverse to the holders of Debentures, or affect the
obligation of the Company to repurchase any Debenture upon the happening of a
Fundamental Change in a manner adverse to the holders of Debentures, or affect
the obligation of the Company to repurchase any Debenture on a Company
Repurchase Date in a manner adverse to the holders of Debentures, or impair the
right to convert the Debentures subject to the terms set forth herein, including
Section 15.06, or reduce the number of shares of Common Stock, the amount of
cash or the amount of other property receivable upon conversion, in each case,
without the consent of the holder of each Debenture so affected, or modify any
of the provisions of this Section 11.02 or Section 7.07, except to increase any
such percentage of aggregate principal amount of Debentures necessary for the
purposes specified therein or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the holder of each
Debenture so affected, or change any obligation of the Company to maintain an
office or agency in the places and for the purposes set forth in Section 5.02,
or reduce the quorum or voting requirements set forth in Article X or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Debentures then outstanding.
An amendment under this Section may not make any change that
adversely affects the rights under Article XVI or XVIII of any holder of Senior
Debt or Guarantor Senior Debt of a Guarantor then outstanding unless the holders
of such Senior Debt or Guarantor Senior Debt (or their Representative) consent
to such change.
Upon the written request of the Company, accompanied by a copy of
the resolutions of the Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of any such supplemental
indenture, and upon the filing with
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the Trustee of evidence of the consent of Debentureholders as aforesaid, the
Trustee shall join with the Company and the Guarantors 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 Debentureholders
under this Section 11.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
11.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company, the Guarantors and the holders
of Debentures 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 11.04. Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures 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,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee and delivered in exchange for the Debentures then outstanding,
upon surrender of such Debentures then outstanding.
Section 11.05. Evidence of Compliance of Supplemental Indenture to
be Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article XI and is otherwise
authorized or permitted by this Indenture.
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ARTICLE XII
Consolidation, Merger, Sale, Conveyance and Lease
-------------------------------------------------
Section 12.01. Consolidation on Certain Terms. Subject to the
provisions of Section 12.02, neither the Company nor any Guarantor shall
consolidate with or merge with or into any other Person or Persons (whether or
not affiliated with the Company or such Guarantor), nor shall the Company or any
Guarantor or their successor or successors be a party or parties to successive
consolidations or mergers, nor shall the Company or any Guarantor sell, convey,
transfer or lease their respective property and assets substantially as an
entirety, to any other Person (whether or not affiliated with such Person),
unless: (i) the Company or Guarantor, as the case may be, is the surviving
Person, or the resulting, surviving or transferee Person, if other than the
Company or such Guarantor, is organized and existing under the laws of the
United States of America, any state thereof or the District of Columbia; (ii)
upon any such consolidation, merger, sale, conveyance, transfer or lease, (a)
the due and punctual payment of the principal of and Interest on all of the
Debentures, according to their tenor and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture and the
Debentures to be performed by the Company or such Guarantor, shall be expressly
assumed, by supplemental indenture satisfactory in form to the Trustee, executed
and delivered to the Trustee by the Person (if other than the Company or such
Guarantor) formed by such consolidation, or into which the Company or such
Guarantor shall have been merged, or by the Person that shall have acquired or
leased such property, and, in the case of such transaction involving the
Company, such supplemental indenture shall provide for the applicable conversion
rights set forth in Section 15.06 or, if applicable, Section 15.12, and (b) the
due and punctual performance and observance of all of the obligations and
conditions of the Registration Rights Agreement to be performed by the Company
or such Guarantor, shall be expressly assumed by novation satisfactory in form
to the Trustee, executed and delivered to the Trustee by the Person (if other
than the Company or such Guarantor) formed by such consolidation, or into which
the Company or such Guarantor shall have been merged, or by the Person that
shall have acquired or leased such property; and (iii) immediately after giving
effect to the transaction described above, no default or Event of Default shall
have occurred and be continuing.
Section 12.02. Successor to be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person (a) by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and Interest on all of the Debentures and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or satisfied by the Company or
Guarantor, as the case may be, and (b) by amendment and novation of the
Registration Rights Agreement, executed and delivered to the Trustee in a form
satisfactory to the Trustee, of the due and punctual performance and observance
of all of the obligations and conditions of the Registration Rights Agreement to
be performed by the Company or such Guarantor, such successor Person shall
succeed to and be substituted for the Company or such Guarantor, in each case,
with the same effect
69
as if it had been named therein as the party of the first part. Such successor
Person thereupon may, in the case of a successor to the Company, cause to be
signed, and may issue either in its own name or in the name of Scientific Games
Corporation any or all of the Debentures issuable hereunder that theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor Person instead of the Company and subject to
all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Debentures that previously shall have been signed and delivered
by the officers of the Company to the Trustee for authentication, and any
Debentures that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Debentures so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof. In the event of any such consolidation, merger, sale,
conveyance, transfer or lease, the Person named as the "Company" in the first
paragraph of this Indenture or any successor that shall thereafter have become
such in the manner prescribed in this Article XII shall be released from its
liabilities as obligor and maker of the Debentures and from its obligations
under this Indenture and the Registration Rights Agreement.
In case of any such consolidation, merger, sale, conveyance,
transfer or lease, such changes in phraseology and form (but not in substance)
may be made in the Debentures thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article XII.
ARTICLE XIII
Satisfaction and Discharge of Indenture
---------------------------------------
Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable and the Company shall deposit (and such deposit is not
prohibited by Article XVI or XVIII) with the Trustee or with one or more Paying
Agents (or, if the Company is acting as its own Paying Agent, set aside,
segregate and hold in trust as provided in Section 5.04), in trust, funds
sufficient to pay all amounts due and owing on Debentures (other than any
Debentures that shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) not theretofore
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canceled or delivered to the Trustee for cancelation, and if in either case the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then this Indenture shall cease to be of further effect (except as
to (i) remaining rights of registration of transfer, substitution and exchange
and conversion of Debentures, (ii) rights hereunder of Debentureholders to
receive payments of principal of and Interest on the Debentures and the other
rights, duties and obligations of Debentureholders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee and (iii) the
rights, obligations and immunities of the Trustee hereunder, including those
pursuant to Section 8.06), and the Trustee, on written demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel as required by
Section 19.05 and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture; the
Company, however, hereby agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Debentures.
Amounts so held in trust are not subject to Article XVI or XVIII.
Section 13.02. Paying Agent to Repay Monies Held. Upon the
satisfaction and discharge of this Indenture, all monies then held by any Paying
Agent of the Debentures (other than the Trustee) shall, upon written request of
the Company, 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 monies.
Section 13.03. Return of Unclaimed Monies. Subject to the
requirements of applicable law, any monies deposited with or paid to the Trustee
for payment of the principal of or Interest on Debentures and not applied but
remaining unclaimed by the holders of Debentures for two years after the date
upon which the principal of or Interest on such Debentures, as the case may be,
shall have become due and payable, shall be repaid to the Company by the Trustee
on demand and all liability of the Trustee shall thereupon cease with respect to
such monies; and the holder of any of the Debentures shall thereafter look only
to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
ARTICLE XIV
Immunity of Incorporators, Stockholders, Officers and Directors
---------------------------------------------------------------
Section 14.01. Indenture and Debentures Solely Corporate
Obligations. No recourse for the payment of the principal of or Interest on any
Debenture, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
in this Indenture or in any supplemental indenture or in any Debenture, or
because of the creation of any Indebtedness represented thereby, shall be had
against any incorporator,
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stockholder, employee, agent, officer, director or subsidiary, as such, past,
present or future, of the Company or of any successor Person, either directly or
through the Company or any successor Person, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Debentures.
ARTICLE XV
Conversion of Debentures
------------------------
Section 15.01. Right to Convert. (a) Subject to and upon compliance
with the provisions of this Indenture, prior to Stated Maturity, the holder of
any Debenture shall have the right, at such holder's option, to convert the
principal amount of the Debenture, or any portion of such principal amount which
is an integral multiple of $1,000, into cash and fully paid and non-assessable
shares (if any) of Common Stock (as such shares shall then be constituted) at
the Conversion Rate in effect at such time, subject to Section 15.01(d), by
surrender of the Debenture so to be converted in whole or in part, together with
any required funds, under the circumstances described in this Section 15.01 and
in the manner provided in Section 15.02. The Debentures shall be convertible
only during the following periods upon the occurrence of one of the following
events:
(i) (A) during any calendar quarter (and only during such calendar
quarter) commencing after December 31, 2004 and before December 31, 2019
if the Last Reported Sale Price for the Common Stock for at least 20
Trading Days during the period of 30 consecutive Trading Days ending on
the last Trading Day of the preceding calendar quarter is greater than or
equal to 120% of the Conversion Price on such last Trading Day and (B) at
any time on or after December 31, 2019 if the Last Reported Sale Price for
the Common Stock on any date on or after December 31, 2019 is greater than
or equal to 120% of the Conversion Price;
(ii) in the event that the Company calls any or all of the
Debentures for redemption (other than pursuant to Article IV) at any time
prior to the close of business on the second Business Day immediately
preceding the Redemption Date (unless the Company fails to pay the
Redemption Price); provided that only those Debentures that are called for
redemption may be converted following such an event; or
(iii) as provided in Section (b) of this Section 15.01.
The Company or its designated agent shall determine on a daily
basis during the time period specified in Section 15.01(a)(i) whether the
Debentures shall be
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convertible as a result of the occurrence of an event specified in clause (i)
above and, if the Debentures shall be so convertible, the Company shall promptly
deliver to the Trustee (or other Conversion Agent appointed by the Company)
written notice thereof. Whenever the Debentures shall become convertible
pursuant to this Section 15.01, the Company or, at the Company's request, the
Trustee in the name and at the expense of the Company, shall notify the holders
of the event triggering such convertibility in the manner provided in Section
19.03, and the Company shall also publicly announce such information by
publication on the Company's website and through such other public medium as it
may use at such time. Any notice so given shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice.
(b) In addition, if:
(i) (A) the Company distributes to all holders of Common Stock
rights or warrants entitling them to subscribe for or purchase (for a
period expiring within 45 days of the date of the distribution) shares of
Common Stock at less than the Last Reported Sale Price of the Common Stock
on the Trading Day immediately preceding the declaration date of the
distribution, or (B) the Company distributes to all holders of Common
Stock assets, debt securities or rights to purchase securities of the
Company, which distribution has a per share value as determined by the
Board of Directors and set forth in a board resolution exceeding 10% of
the Last Reported Sale Price of the Common Stock on the Trading Day
immediately preceding the declaration date for such distribution, then, in
either case, the Debentures may be surrendered for conversion at any time
on and after the date that the Company gives notice to the holders of such
distribution, which shall be not less than 20 Business Days prior to the
Ex-Dividend Date for such distribution, until the earlier of the close of
business on the Business Day immediately preceding, but not including, the
Ex-Dividend Date or the date the Company publicly announces that such
distribution will not take place; provided that no holder may exercise
this right to convert if the holder will otherwise participate in such
distribution without conversion as a result of holding Debentures; and
(ii) the Company is a party to a consolidation, merger, binding
share exchange or transfer of all or substantially all of its assets, in
each case pursuant to which the Common Stock would be converted into (A)
cash or property other than securities or (B) cash, securities or other
property, provided that, in the case of clause (B), such transaction also
constitutes a Fundamental Change (or would have constituted a Fundamental
Change but for the Trading Price Exception), then the Debentures may be
surrendered for conversion at any time from and after the date which is 15
days prior to the anticipated effective date of the transaction until and
including the date which is 15 days after the actual effective date (the
"Effective Date") of the transaction or, in the case of clause (B), until
and including the Business Day immediately preceding the Fundamental
Change Repurchase Date in respect of such transaction. The Board of
Directors shall determine the anticipated Effective Date of the
transaction, and such
73
determination shall be conclusive and binding on the holders and shall be
publicly announced by the Company by publication on its website and
through such other public medium as it may use at that time not later than
two Business Days prior to such 15th day.
(c) A Debenture in respect of which a holder is electing to exercise
its option to require repurchase upon a Fundamental Change pursuant to Section
3.04 or repurchase pursuant to Section 3.05 may be converted only if such holder
withdraws its election in accordance with Section 3.06(d). A holder of
Debentures is not entitled to any rights of a holder of Common Stock until such
holder has converted his Debentures into Common Stock, and only to the extent
such Debentures are deemed to have been converted to Common Stock under this
Article XV.
(d) Subject to Section 15.12, if a holder elects to convert a
Debenture in connection with a transaction that occurs on or prior to June 1,
2010 that is a Fundamental Change as described under clause (i) or (ii) of the
definition thereof (or that would have been a Fundamental Change under such
clause (i) or (ii) but for the existence of the Trading Price Exception) and
pursuant to which 10% or more of the consideration for the Common Stock (other
than cash payments for fractional shares and cash payments made in respect of
dissenters' appraisal rights) in such transaction consists of cash or securities
(or other property) that are not traded or scheduled to be traded immediately
following such transaction on a U.S. national securities exchange or The NASDAQ
National Market (a "Non-Stock Change of Control"), the Company shall deliver to
such holder upon conversion, in addition to the cash or combination of cash and
shares of Common Stock, as the case may be, equal to the Conversion Value, an
additional number of shares of Common Stock (the "Additional Common Stock") as
set forth below.
The number of shares of Additional Common Stock will be
determined by reference to the table below, based on the Effective Date of
such Non-Stock Change of Control and the price paid per share for the Common
Stock in the Non-Stock Change of Control (the "Stock Price"). If holders of
Common Stock receive only cash in the Non-Stock Change of Control, the Stock
Price shall be the cash amount paid per share. Otherwise, the Stock Price
shall be the average of the Last Reported Sale Prices of the Common Stock on
the five Trading Days prior to but not including the Effective Date of such
Non-Stock Change of Control.
The Stock Prices set forth in the table and in clauses (ii) and
(iii) below will be adjusted as of any date on which the Conversion Rate is
adjusted pursuant to Section 15.05. On such date, the Stock Prices shall be
adjusted by multiplying the Stock Prices applicable immediately prior to such
adjustment by a fraction, the numerator of which shall be the Conversion Rate
immediately prior to the adjustment giving rise to the Stock Price
adjustment, and the denominator of which shall be the Conversion Rate as so
adjusted.
The number of shares of Additional Common Stock shall be correspondingly
adjusted in the same manner as the Conversion Rate as set forth in Section
15.05.
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The following table sets forth the Stock Price and number of
shares of Additional Common Stock issuable per $1,000 principal amount of
Debentures:
Stock Price
-----------
$ 23.28 $ 24.00 $ 28.00 $ 32.00 $ 36.00 $ 40.00 $ 44.00 $ 48.00 $ 52.00 $ 56.00 $ 60.00 $ 64.00
Effective Date
- --------------
December 1, 2004 .... 8.59 8.03 5.54 3.93 2.85 2.10 1.57 1.18 0.90 0.69 0.53 0.00
December 1, 2005 .... 8.59 8.28 5.60 3.88 2.75 1.98 1.45 1.07 0.79 0.59 0.44 0.00
December 1, 2006 .... 8.59 8.44 5.54 3.72 2.55 1.77 1.25 0.89 0.64 0.46 0.33 0.00
December 1, 2007 .... 8.59 8.44 5.28 3.37 2.18 1.44 0.96 0.64 0.44 0.29 0.20 0.00
December 1, 2008 .... 8.59 8.16 4.69 2.70 1.56 0.91 0.54 0.32 0.19 0.12 0.07 0.00
December 1, 2009 .... 8.59 7.45 3.34 1.35 0.51 0.19 0.07 0.03 0.01 0.01 0.00 0.00
June 1, 2010 ........ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
If the Stock Price and Effective Date are not set forth in the
table above and the Stock Price is:
(i) between two Stock Prices on the table or the Effective Date is
between two dates on the table, the number of shares of Additional Common
Stock will be determined by straight-line interpolation between the number
of shares of Additional Common Stock set forth for the higher and lower
Stock Price and the two dates, as applicable, based on a 360-day year;
(ii) in excess of $64.00 per share (subject to adjustment as
provided above), no shares of Additional Common Stock will be issued upon
conversion; or
(iii) less than $23.28 per share (subject to adjustment as provided
above), no shares of Additional Common Stock will be issued upon
conversion.
Notwithstanding the foregoing, in no event shall the total number
of shares of Common Stock issuable upon conversion exceed 42.9553 per $1,000
principal amount of Debentures, subject to adjustment in the same manner as
the Conversion Rate as set forth in Section 15.05.
Section 15.02. Exercise of Conversion Right; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion right with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Conversion Agent
such Debenture with the original or facsimile of the form entitled "Form of
Conversion Notice" on the reverse thereof, which is irrevocable, duly completed
and manually signed, together with such Debentures duly endorsed for transfer,
accompanied by the funds, if any, required by this Section 15.02. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion, if any, shall be issued, and to whom the cash payable on
such conversion shall be delivered, and shall be accompanied by appropriate
endorsements and transfer documents if required by the Company, the Conversion
Agent or the Trustee, and any transfer or similar taxes, if required pursuant to
Section 15.07.
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In order to exercise the conversion right with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause
to be completed, the appropriate instruction form for conversion pursuant to
the Depositary's book-entry conversion program, deliver, or cause to be
delivered, by book-entry delivery an interest in such Global Debenture,
furnish appropriate endorsements and transfer documents if required by the
Company or the Trustee or Conversion Agent, and pay the funds, if any,
required by this Section 15.02 and any transfer taxes if required pursuant to
Section 15.07.
The Company will deliver the Settlement Amount to converting
holders on the Business Day immediately following the last day of the Cash
Settlement Averaging Period. Subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other
than that of the holder of the converted Debenture (as if such transfer were
a transfer of the Debenture or Debentures (or portion thereof) so converted),
the Company shall issue and shall deliver through the Conversion Agent to
such holder at the office or agency maintained by the Company for such
purpose pursuant to Section 5.02, a check or cash in respect of the lesser of
the aggregate principal amount of Debentures being converted and the
Conversion Value in respect of such Debentures, calculated by the Company as
provided in Section 15.03, and a certificate or certificates for the number
of full shares of Common Stock, if any, issuable upon the conversion of such
Debenture or Debentures (or portion thereof) so converted as determined by
the Company as provided in Section 15.03, or if the Common Stock is eligible
for transfer through the Depositary, the Company shall make a book-entry
transfer of such number of shares of Common Stock through the Depositary, and
a check or cash in respect of any fractional interest in respect of any share
of Common Stock arising upon such conversion. In case any Debenture of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.03, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of the Debenture so surrendered,
without charge to him, a new Debenture or Debentures in authorized
denominations in an aggregate principal amount equal to the unconverted
portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any
such Debenture (or portion thereof) on the date on which the requirements set
forth above in this Section 15.02 have been satisfied as to such Debenture
(or portion thereof) (such date, the "Conversion Date"), and the Person in
whose name any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become on said date
the holder of record of the shares represented thereby; provided that any
such surrender on any date when the stock transfer books of the Company shall
be closed shall constitute the Person in whose name the certificates are to
be issued as the record holder thereof for all purposes on the next
succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Rate in effect on the date upon which
such Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion
during the period from the close of business on any Regular Record Date to
the opening of business
76
on the immediately following Interest Payment Date shall be accompanied by
payment, in immediately available funds or other funds acceptable to the
Company, of an amount equal to the Interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided that no such
payment need be made (1) if the Company has specified a Redemption Date that is
after a Regular Record Date and on or prior to the corresponding Interest
Payment Date, (2) if the Company has specified a Fundamental Change Repurchase
Date that is after a Regular Record Date and on or prior to the corresponding
Interest Payment Date or (3) to the extent of any overdue Interest, if any
overdue Interest exists at the time of conversion with respect to such
Debenture. Except as provided in this Section 15.02, no payment or other
adjustment shall be made for Interest accrued on any Debenture converted or for
dividends on any shares issued upon the conversion of such Debenture as provided
in this Article XV.
Upon the conversion of an interest in a Global Debenture, the
Trustee (or other Conversion Agent appointed by the Company), or the
Custodian at the direction of the Trustee (or other Conversion Agent
appointed by the Company), shall make a notation on such Global Debenture as
to the reduction in the principal amount represented thereby. The Company
shall notify the Trustee in writing of any conversions of Debentures effected
through any Conversion Agent other than the Trustee.
Upon the conversion of a Debenture, that portion of the accrued
but unpaid Interest with respect to the converted Debenture shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid
in full to the holder thereof through delivery of cash or a combination of
cash and shares of Common Stock (or other property pursuant to the terms of
this Indenture), as the case may be (together with the cash payment, if any,
in lieu of fractional shares and Additional Common Stock, if applicable) in
exchange for the Debenture being converted pursuant to the provisions hereof;
and the cash or combination of cash and shares of Common Stock (or other
property pursuant to the terms of this Indenture), as the case may be
(together with any such cash payment in lieu of fractional shares and
Additional Common Stock) shall be treated as issued, to the extent thereof,
first in exchange for and in satisfaction of the Company's obligation to pay
the principal amount of the converted Debenture and the accrued but unpaid
Interest, and the balance, if any, of such fair market value of such Common
Stock (and any such cash payment or, as applicable, other property) shall be
treated as issued in exchange for and in satisfaction of the right to convert
the Debenture being converted pursuant to the provisions hereof.
Notwithstanding the preceding paragraph, if Debentures are
surrendered for conversion during the period from the close of business on
any Regular Record Date to the opening of business on the corresponding
Interest Payment Date, holders of such Debentures at the close of business on
the Regular Record Date will receive the Interest payable on such Debentures
on such corresponding Interest Payment Date notwithstanding the conversion.
Section 15.03. Payment Upon Conversion; Cash Payments in Lieu of
Fractional Shares. (a) Upon conversion of Debentures pursuant to Section 15.02,
the
77
Company will deliver to holders in respect of each $1,000 principal amount of
Debentures being converted a settlement amount (the "Settlement Amount")
consisting of:
(i) cash equal to the lesser of (A) $1,000 and (B) the Conversion
Value, and
(ii) to the extent the Conversion Value exceeds $1,000, a number of
shares equal to the sum of, for each day of the Cash Settlement Averaging
Period, (A) 5% of the difference between the Conversion Value and $1,000,
divided by (B) the Last Reported Sale Price of the Common Stock on such
day.
(b) No fractional shares of Common Stock or scrip certificates
representing fractional shares shall be issued upon conversion of Debentures. If
more than one Debenture shall be surrendered for conversion at one time by the
same holder, the number of full shares that shall be issuable upon conversion,
if any, shall be computed on the basis of the aggregate principal amount of the
Debentures so surrendered. If any fractional share of Common Stock would be
issuable upon the conversion of any Debenture or Debentures, the Company shall
make an adjustment and payment therefor in cash to the holder of Debentures at
the Last Reported Sale Price of the Common Stock on the last Trading Day
immediately preceding the applicable Conversion Date.
Section 15.04. Conversion Rate. Each $1,000 principal amount of the
Debentures shall be convertible into the number of shares of Common Stock
specified in the form of Debenture (herein called the "Conversion Rate")
attached as Exhibit A hereto (initially 34.3643 shares), to be settled in
accordance with, and subject to adjustment as provided in, this Article XV.
Section 15.05. Adjustment of Conversion Rate. The Conversion Rate
shall be adjusted from time to time by the Company as follows:
(a) If the Company issues shares of Common Stock as a dividend or
distribution on shares of the Common Stock, or effects a share split or share
combination, the Conversion Rate will be adjusted based on the following
formula:
OS(1)
CR(1) = CR(o) X -----
OS(o)
where,
CR(o) = the Conversion Rate in effect immediately prior to such event
CR(1) = the Conversion Rate in effect immediately after such event
OS(o) = the number of shares of Common Stock outstanding immediately
prior to such event
78
OS(1) = the number of shares of Common Stock outstanding immediately
after such event
Such adjustment shall become effective immediately after the opening of
business on the Business Day following the date fixed for such
determination. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in treasury by the
Company. If any dividend or distribution of the type described in this
Section 15.05(a) is declared but not so paid or made, the Conversion
Rate shall again be adjusted to the Conversion Rate that would then be
in effect if such dividend or distribution had not been declared.
(b) If the Company issues to all or substantially all holders of its
Common Stock any rights or warrants entitling them for a period of not more than
60 days to subscribe for or purchase shares of Common Stock, or securities
convertible into shares of Common Stock, at a price per share or a conversion
price per share less than the Last Reported Sale Price of shares of Common Stock
on the Business Day immediately preceding the date of announcement of such
issuance, the Conversion Rate will be adjusted based on the following formula
(provided that the Conversion Rate will be readjusted to the extent that such
rights or warrants are not exercised prior to their expiration):
OS(o)+X
CR(1) = CR(o) X -------
OS(o)+Y
where,
CR(o) = the Conversion Rate in effect immediately prior to such event
CR(1) = the Conversion Rate in effect immediately after such event
OS(o) = the number of shares of Common Stock outstanding immediately
prior to such event
X = the total number of shares of Common Stock issuable pursuant
to such rights
Y = the number of shares of Common Stock equal to the aggregate
price payable to exercise such rights divided by the average
of the Last Reported Sale Prices of the Common Stock over the
10 consecutive Trading Day period ending on the Business Day
immediately preceding the record date for the issuance of such
rights
Such adjustment shall be successively made whenever any such rights or
warrants are issued and shall become effective immediately after the
opening of business on the Business Day following the date fixed for
such determination. The Company shall not issue any such rights,
options or warrants in respect of shares of Common Stock held in
treasury by the Company. To the extent that shares of
79
Common Stock are not delivered after the expiration of such rights or
warrants, the Conversion Rate shall be readjusted to the Conversion Rate
that would then be in effect had the adjustments made upon 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. If such rights or
warrants are not so issued, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such date fixed for
the determination of stockholders entitled to receive such rights or
warrants had not been fixed.
In determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such Last
Reported Sale Price, and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants and
any amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of
Directors.
(c) If the Company distributes shares of its Capital Stock,
evidences of its indebtedness or other assets or property of the Company to all
or substantially all holders of the Common Stock, excluding:
(i) dividends, distributions and rights or warrants referred to in
clause (a) or (b) above; and
(ii) dividends or distributions paid exclusively in cash;
then the Conversion Rate will be adjusted based on the following formula:
SP(o)
CR(1) = CR(o) X ---------
SP(o)-FMV
where,
CR(o) = the Conversion Rate in effect immediately prior to such
distribution
CR(1) = the Conversion Rate in effect immediately after such
distribution
SP(o) = the average of the Last Reported Sale Prices of the Common
Stock over the 10 consecutive Trading Day period ending on the
Trading Day immediately preceding the Ex-Dividend Date for
such distribution
FMV = the fair market value (as determined by the Board of
Directors) of the shares of Capital Stock, evidences of
indebtedness, assets or property distributed with respect to
each outstanding share of Common Stock on the record date for
such distribution
80
Such adjustment shall become effective immediately prior to the opening
of business on the Business Day following the date fixed for the
determination of stockholders entitled to receive such distribution.
With respect to an adjustment pursuant to this clause (c) where there
has been a payment of a dividend or other distribution on the Common
Stock of shares of Capital Stock of any class or series, or similar
equity interest, of or relating to a Subsidiary or other business unit
(a "Spin-Off") the Conversion Rate in effect immediately before the
close of business on the record date fixed for determination of
stockholders entitled to receive the distribution will be increased
based on the following formula:
FMV(o)+MP(o)
CR(1) = CR(o) X -----------
MP(o)
where,
CR(o) = the Conversion Rate in effect immediately prior to such
distribution
CR(1) = the Conversion Rate in effect immediately after such
distribution
FMV(o)= the average of the Last Reported Sale Prices of the Capital
Stock or similar equity interest distributed to holders of
Common Stock applicable to one share of Common Stock over the
first 10 consecutive Trading Day period after the effective
date of the Spin-Off
MP(o) = the average of the Last Reported Sale Prices of Common Stock
over the first 10 consecutive Trading Day period after the
effective date of the Spin-Off
Such adjustment shall occur on the tenth Trading Day from, and
including, the effective date of the Spin-Off.
(d) If the Company makes any cash dividend or distribution to
holders of Common Stock, the Conversion Rate will be adjusted based on the
following formula:
SP(o)
CR(1) = CR(o) X -------
SP(o)-C
where,
CR(o) = the Conversion Rate in effect on the Ex-Dividend Date for such
distribution
CR(1) = the Conversion Rate in effect immediately after the
Ex-Dividend Date for such distribution
81
SP(o) = the Current Market Price of the Common Stock on the Trading
Day immediately preceding the Ex-Dividend Date
C = the amount in cash per share the Company distributes to
holders of Common Stock
Such adjustment shall become effective immediately after the close of
business on the date for such determination.
(e) If the Company or any of its Subsidiaries purchases shares of
the Common Stock pursuant to a tender or exchange offer for Common Stock, to the
extent that the per share consideration paid in such offer exceeds the average
of the Last Reported Sale Price of the Common Stock over the 10 consecutive
Trading Day period prior to the expiration of such tender or exchange offer, the
Conversion Rate will be increased based on the following formula:
AC+(SP(1) x OS(1))
CR(1) = CR(o) X -----------------
OS(o) x SP(1)
where,
CR(o) = the Conversion Rate in effect on the date such tender or
exchange offer expires
CR(1) = the Conversion Rate in effect on the day next succeeding the
date such tender or exchange offer expires
AC = the aggregate value of all cash and any other consideration
(as determined by the Board of Directors) paid or payable for
shares purchased in such tender or exchange offer
OS(o) = the number of shares of Common Stock outstanding immediately
prior to the date such tender or exchange offer expires
OS(1) = the number of shares of Common Stock outstanding immediately
after the date such tender or exchange offer expires
SP(1) = the average of the Last Reported Sale Prices of Common Stock
over the 10 consecutive Trading Day period commencing on the
Trading Day next succeeding the date such tender or exchange
offer expires
If the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such tender or exchange offer had not been made.
82
If, however, the application of the foregoing formula would result in a
decrease in the Conversion Rate, no adjustment to the Conversion Rate will be
made.
(f) Notwithstanding the foregoing provisions of this Section 15.05,
(1) no adjustment shall be made thereunder, nor shall an adjustment be made to
the ability of a holder of a Debenture to convert, for any distribution
described therein if the holder will otherwise participate in the distribution
as a result of holding Debentures without conversion of such holder's Debentures
and (2) the Company shall not be required to give effect to any adjustment
pursuant to any of Sections 15.05(a) through (e) unless and until the net effect
of one or more adjustments, each of which will be carried forward until counted
toward adjustment, will have resulted in a change in the Conversion Rate by at
least 1%, and when the cumulative net effect of more than one adjustment so
determined will be to change the Conversion Rate by at least 1%, that change in
the Conversion Rate will be given effect.
Except as stated herein, the Company will not adjust the
Conversion Rate for the issuance of shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or the right to
purchase shares of Common Stock or such convertible or exchangeable
securities.
(g) The Company may (but is not required to) make such increases in
the Conversion Rate, in addition to those required by clauses (a) through (e) of
this Section 15.05, as the Board of Directors considers to be advisable to avoid
or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock in connection with a dividend or distribution of shares (or rights
to acquire shares) or any similar event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of at least
20 days if the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail to holders of record of the
Debentures a notice of the increase at least 15 days prior to the date the
increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.
(h) No adjustment to the Conversion Rate need be made:
(i) upon the issuance of any shares of Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any plan;
(ii) upon the issuance of any shares of Common Stock or options or
rights to purchase shares of Common Stock pursuant to any present or
future employee,
83
director or consultant benefit plan or program of or assumed by the
Company or any of its Subsidiaries;
(iii) upon the issuance of any shares of Common Stock pursuant to
any option, warrant, right, or exercisable, exchangeable or convertible
security not described in clause (ii) above and outstanding as of the
Original Issue Date;
(iv) for a change in the par value of the Common Stock; or
(v) for accrued and unpaid Interest.
To the extent the Debentures become convertible into cash, assets or property
(other than Capital Stock of the Company or securities to which Section 15.06
or 15.12 applies), no adjustment shall be made thereafter as to the cash,
assets or property. Interest shall not accrue on such cash, assets or
property.
(i) All calculations under this Article XV shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be.
(j) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent other than
the Trustee an Officers' Certificate setting forth the Conversion Rate after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Rate and may assume that the last
Conversion Rate of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Debenture at his
last address appearing on the Debenture Register provided for in Section 2.05 of
this Indenture, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.
(k) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after (1) a record date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 15.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 15.05(b) or (4) the expiration time for any tender
or exchange offer pursuant to Section 15.05(e), (each a "Determination Date"),
the Company may elect to defer until the occurrence of the applicable Adjustment
Event
84
(as hereinafter defined) (x) issuing to the holder of any Debenture converted
after such Determination Date and before the occurrence of such Adjustment
Event, the additional shares of Common Stock or other securities issuable upon
such conversion by reason of the adjustment required by such Adjustment Event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (y) paying to such holder any amount in cash in
lieu of any fraction pursuant to Section 15.03. For purposes of this Section
15.05(k), the term "Adjustment Event" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence of
such event,
(ii) in any case referred to in clause (2) hereof, the date any such
dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the date a sale
or exchange of Common Stock pursuant to such tender or exchange offer is
consummated and becomes irrevocable.
(l) For purposes of this Section 15.05, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
Section 15.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.05(c) applies), (ii) any consolidation, merger,
binding share exchange or combination of the Company with another Person as a
result of which holders of Common Stock shall be entitled to receive cash,
securities or other property with respect to or in exchange for such Common
Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive cash, securities or other
85
property with respect to or in exchange for such Common Stock, then the Company
or the successor or purchasing Person, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Debenture shall be convertible into the kind and
amount of cash, securities or other property receivable upon such
reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Debentures (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock are available to
convert all such Debentures and including, if applicable, Additional Common
Stock) immediately prior to such reclassification, change, consolidation,
merger, binding share exchange, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of cash, securities or other property receivable upon such
reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance (provided that, if the kind or amount of cash,
securities or other property receivable upon such reclassification, change,
consolidation, merger, binding share exchange, combination, sale or conveyance
is not the same for each share of Common Stock in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purposes of this Section 15.06 the kind and amount of cash, securities or other
property receivable upon such reclassification, change, consolidation, merger,
binding share exchange, combination, sale or conveyance for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XV.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within 20
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, binding share
exchanges, combinations, sales and conveyances.
If this Section 15.06 applies to any event or occurrence,
Section 15.05 shall not apply. Notwithstanding this Section 15.06, if a
Public Acquirer Change of Control occurs and the Company elects to adjust the
Conversion Rate and its conversion obligation pursuant to Section 15.12, the
provisions of Section 15.12 shall apply to the conversion instead of this
Section 15.06.
Section 15.07. Taxes on Shares Issued. The issue of stock
certificates on conversions of Debentures shall be made without charge to the
converting Debentureholder for any documentary, stamp or similar issue or
transfer tax in respect of the issue thereof. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue and delivery of Common Stock in any name other than that
of the holder of any Debenture converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
Section 15.08. Reservation of Shares, Shares to be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
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Before taking any action which would cause an adjustment
increasing the Conversion Rate to an amount that would cause the Conversion
Price to be reduced below the then par value, if any, of the shares of Common
Stock issuable upon conversion of the Debentures, the Company will take all
corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue shares of such Common
Stock at such adjusted Conversion Rate.
The Company covenants that all shares of Common Stock which may
be issued upon conversion of Debentures will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal
or state law before such shares may be validly issued upon conversion, the
Company will in good faith and as expeditiously as possible, to the extent
then permitted by the rules and interpretations of the Commission (or any
successor thereto), endeavor to secure such registration or approval, as the
case may be.
The Company further covenants that, if at any time the Common
Stock shall be listed on the New York Stock Exchange, The NASDAQ National
Market or any other national securities exchange or automated quotation
system, the Company will, if permitted by the rules of such exchange or
automated quotation system, list and keep listed, so long as the Common Stock
shall be so listed on such exchange or automated quotation system, all Common
Stock issuable upon conversion of the Debentures; provided that if the rules
of such exchange or automated quotation system permit the Company to defer
the listing of such Common Stock until the first conversion of the Debentures
into Common Stock in accordance with the provisions of this Indenture, the
Company covenants to list such Common Stock issuable upon conversion of the
Debentures in accordance with the requirements of such exchange or automated
quotation system at such time.
Section 15.09. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
the Company or any holder of Debentures to determine the Conversion Rate or
whether any facts exist which may require any adjustment of the Conversion Rate,
or with respect to the nature or extent or calculation of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. The Trustee
and any other Conversion Agent shall not 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
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property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other Conversion Agent make no
representations with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article XV. Without limiting the generality of the
foregoing, neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 15.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Debentureholders upon the conversion of their Debentures after any
event referred to in such Section 15.06 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 8.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.
Section 15.10. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Conversion
Rate pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to
subscribe for or purchase any share of any class or any other rights or
warrants; or
(c) of any reclassification or reorganization of the Common Stock
(other than a subdivision or combination of its outstanding Common Stock,
or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture Register
provided for in Section 2.05 of this Indenture, as promptly as possible but
in any event at least 10 days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or 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 or rights are to be
determined, or (y) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up
is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, sale, transfer,
88
dissolution, liquidation or winding up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up.
Section 15.11. Stockholder Rights Plan. Holders of Debentures will
receive, upon conversion of Debentures, in addition to cash and shares, if any,
of Common Stock, the rights under any rights plan the Company may put into
effect or, if the Company amends such rights plan or adopts a new rights plan
while Debentures remain outstanding, the rights under that rights plan as so
amended or adopted unless, prior to the conversion, the rights have expired,
terminated or been redeemed or unless the rights have separated from the Common
Stock, in which case the Conversion Rate will be adjusted at the time of
separation as if the Company had distributed to all holders of Common Stock
shares of its Capital Stock, evidences of indebtedness or assets as described in
Section 15.05(c), subject to readjustment upon the subsequent expiration,
termination or redemption of the rights.
Section 15.12. Conversion After a Public Acquirer Change of Control.
(a) In the event of a Public Acquirer Change of Control, the Company may, in
lieu of issuing the Additional Common Stock pursuant to Section 15.01(d), elect
to adjust the Conversion Rate and the related conversion obligation such that
from and after the Effective Date of such Public Acquirer Change of Control,
holders will be entitled to convert their Debentures, in accordance with Section
15.02 hereof (subject to the satisfaction of the requirements of Section 15.01)
into a number of shares of Public Acquirer Common Stock by adjusting the
Conversion Rate in effect immediately before the Public Acquirer Change of
Control by multiplying it by a fraction:
(i) the numerator of which will be (A) in the case of a share
exchange, consolidation, merger or binding share exchange, pursuant to
which the Common Stock is converted into cash, securities or other
property, the average value of all cash and any other consideration (as
determined by the Board of Directors) paid or payable per share of Common
Stock or (B) in the case of any other Public Acquirer Change of Control,
the average of the Last Reported Sale Prices of the Common Stock for the
five consecutive Trading Days prior to but excluding the Effective Date of
such Public Acquirer Change of Control, and
(ii) the denominator of which will be the average of the Last
Reported Sale Prices of the Public Acquirer Common Stock for the five
consecutive Trading Days commencing on the Trading Day next succeeding the
Effective Date of such Public Acquirer Change of Control.
(b) The Company will notify holders of its election by providing
notice as set forth in Section 15.01(b)
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ARTICLE XVI
Subordination
-------------
Section 16.01. Debentures Subordinated to Senior Debt. The Company
covenants and agrees, and the Trustee and each holder of the Debentures by its
acceptance thereof likewise covenant and agree, that all Debentures shall be
issued subject to the provisions of this Article XVI; and each Person holding
any Debenture, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
Interest on the Debentures by the Company, as well as payments of the cash
portion of any Settlement Amount upon conversion, shall, to the extent and in
the manner set forth in this Article XVI, be subordinated and junior in right of
payment to the prior payment in full in cash of all amounts payable under Senior
Debt, whether outstanding on the Original Issue Date or thereafter incurred.
Section 16.02. No Payment on Debentures in Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the Company of principal of
or Interest on the Debentures, or payments of the cash portion of any Settlement
Amount upon conversion or any deposit to the trust described in Section
13.01(a), whether pursuant to the terms of the Debentures, upon acceleration,
pursuant to Article III or otherwise, shall be made to the holders of Debentures
(except that holders of Debentures may receive and retain payments from the
trust described in Section 13.01(a)) if (i) a default in the payment of the
principal of or premium, if any, or interest on Designated Senior Debt occurs
and is continuing beyond any applicable period of grace or (ii) any other
default occurs and is continuing with respect to Designated Senior Debt that
permits holders of the Designated Senior Debt as to which such default relates
to accelerate its maturity and the Trustee receives a written notice of such
other default (a "Payment Blockage Notice") from the Company or the holders of
any Designated Senior Debt (with a copy to the Company) until all Obligations
with respect to such Designated Senior Debt are paid in full in cash; provided,
that payments on the Debentures shall be resumed (x) in the case of a payment
default, upon the date on which such default is cured, waived or ceases to exist
and (y) in case of a nonpayment default, the earlier of the date on which such
nonpayment default is cured, waived or ceases to exist and 179 days after the
date on which the applicable Payment Blockage Notice is received by the Trustee
(such period being referred to herein as the "Payment Blockage Period"), unless
the maturity of any Designated Senior Debt has been accelerated (and written
notice of such acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Debentures to the
contrary, (x) in no event shall a Payment Blockage Period extend beyond 179
days from the date the Payment Blockage Notice in respect thereof was given
and (y) not more than one Payment Blockage Period may be commenced with
respect to the Debentures during any period of 360 consecutive days. No
nonpayment default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice (it being understood that any
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subsequent action, or any breach of any covenant for a period commencing
after the date of receipt by the Trustee of such Payment Blockage Notice,
that, in either case, would give rise to such a default pursuant to any
provisions under which a default previously existed or was continuing shall
constitute a new default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any holder of Debentures when such payment
is prohibited by Section 16.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Designated
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Senior Debt may
have been issued, as their respective interests may appear, but only to the
extent that, upon notice from the Trustee to the holders of Designated Senior
Debt that such prohibited payment has been made, the holders of such Designated
Senior Debt (or their representative or representatives or a trustee) notify the
Trustee in writing of the amounts then due and owing on the Designated Senior
Debt, if any, and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Designated Senior Debt.
Section 16.03. Payment Over of Proceeds Upon Dissolution, Etc. (a)
Upon any payment or distribution of assets or securities of the Company of any
kind or character, whether in cash, property or securities, upon any dissolution
or winding-up or liquidation or reorganization of the Company, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or other similar
proceedings, an assignment for the benefit of creditors or any marshaling of the
Company's assets, the holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations due in respect of such Senior
Debt before the holders of the Debentures or the Trustee on behalf of such
holders shall be entitled to receive any payment by the Company of the principal
of or Interest on the Debentures or the cash portion of any Settlement Amount
upon conversion, or any payment by the Company to acquire any of the Debentures
for cash, property or securities, or any distribution with respect to the
Debentures of any cash, property or securities (except that the holders may
receive and retain Permitted Junior Securities and payments from the trust
described under Section 13.01(a)). Before any payment (other than Permitted
Junior Securities or payments from such trust) may be made by, or on behalf of,
the Company of the principal of or Interest on the Debentures, or the cash
portion of any Settlement Amount upon conversion, upon any such dissolution or
winding-up or liquidation or reorganization, any payment or distribution of
assets or securities of the Company of any kind or character, whether in cash,
property or securities, to which the holders of the Debentures or the Trustee on
their behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Senior Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such
holders) or their representatives or to the trustee or trustees or agent or
agents under any agreement or indenture pursuant to which any of such Senior
Debt may have been issued, as their respective interests may appear, to the
extent necessary to pay all such Senior Debt in full in cash after giving effect
to any prior
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or concurrent payment, distribution or provision therefor to or for the holders
of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any holder of Debentures at a
time when such payment or distribution is prohibited by Section 16.03(a) and
before all Obligations in respect of Senior Debt are paid in full in cash, or
payment provided for, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their respective
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of Senior
Debt remaining unpaid until all such Senior Debt has been paid in full in cash
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt; provided that the
Trustee shall be entitled to receive from the holders of such Senior Debt
written notice of the amounts owing on such Senior Debt.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another Person upon the terms and
conditions provided in Article XII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section
16.03 if such other Person shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII.
Section 16.04. Subrogation. Upon the payment in full in cash of all
Senior Debt of the Company, or provision for payment, the holders of the
Debentures shall be subrogated to the rights of the holders of Senior Debt to
receive payments or distributions of cash, property or securities of the Company
made on such Senior Debt until the principal of and Interest on, and all
payments of the cash portion of all Settlement Amounts upon conversion of, the
Debentures shall be paid in full in cash; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the holders of the Debentures or the
Trustee on their behalf would be entitled except for the provisions of this
Article XVI, and no payment over pursuant to the provisions of this Article XVI
to the holders of Senior Debt by holders of the Debentures or the Trustee on
their behalf shall, as between the Company, its creditors other than holders of
Senior Debt, and the holders of the Debentures, be deemed to be a payment by the
Company to or on account of the Senior Debt. It is understood that the
provisions of this Article XVI are and are intended solely for the purpose of
defining the relative rights of the holders of the Debentures, on the one hand,
and the holders of the Senior Debt, on the other hand.
92
If any payment or distribution to which the holders of the
Debentures would otherwise have been entitled but for the provisions of this
Article XVI shall have been applied, pursuant to the provisions of this
Article XVI, to the payment of all amounts payable under Senior Debt, then
and in such case, the holders of the Debentures shall be entitled to receive
from the holders of such Senior Debt any payments or distributions received
by such holders of any Senior Debt in excess of the amount required to make
payment in full, or provision for payment, of such Senior Debt.
Section 16.05. Obligations of Company Unconditional. Nothing
contained in this Article XVI or elsewhere in this Indenture or in the
Debentures is intended to or shall impair, as between the Company and the
holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of and
Interest on the Debentures as and when the same shall become due and payable,
and all Settlement Amounts as required upon conversion, in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Debentures and creditors of the Company other than the holders of Senior
Debt, nor shall anything herein or therein prevent the holder of any Debenture
or the Trustee on their behalf from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture, subject to the rights, if
any, under this Article XVI of the holders of Senior Debt in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article XVI shall restrict the right of the Trustee or the
holders of Debentures to take any action to declare the Debentures to be due
and payable prior to their Stated Maturity pursuant to Article VII or to
pursue any rights or remedies hereunder; provided that all Senior Debt then
due and payable shall first be paid in full before the holders of the
Debentures or the Trustee are entitled to receive any direct or indirect
payment from the Company of principal of or Interest on, or the cash portion
of any Settlement Amount upon conversion of, the Debentures.
Section 16.06. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI. The Trustee shall not
be charged with knowledge of the existence of any event of default with respect
to any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an
officer of the Company, or by a holder of Senior Debt or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article VIII, be entitled to assume that no such facts exist;
provided that if the Trustee shall not have received the notice provided for in
this Section 16.06 at least two Business Days prior to the date upon which by
the terms of this Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or Interest on
any Debenture and any Settlement Amount), then, regardless of anything herein to
the contrary, the Trustee shall have full power and authority to receive
93
any moneys from the Company 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. Nothing contained in this Section
16.06 shall limit the right of the holders of Senior Debt to recover payments as
contemplated by Section 16.03. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Debt (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Senior Debt or a trustee or representative on behalf of any
such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article XVI, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt 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 XVI, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 16.07. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article XVI, the Trustee and the holders of the Debentures
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which bankruptcy, dissolution, winding-up, liquidation
or reorganization proceedings are pending, or upon 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 Debentures for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XVI.
Section 16.08. Trustee's Relation to Senior Debt. The Trustee and
any Paying Agent shall be entitled to all the rights set forth in this Article
XVI with respect to any Senior Debt 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 Debt, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, and no implied
covenants or obligations with respect to the holders of Senior Debt 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 Debt. The Trustee shall
not be liable to any such holders if the Trustee shall in good faith
mistakenly pay over or distribute to holders of Debentures or to the Company
or to any other Person
94
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article XVI or otherwise.
Section 16.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt. No right of any present or
future holders of any Senior Debt to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with. The provisions of this Article XVI are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Debt.
Section 16.10. Debentureholders Authorize Trustee to Effectuate
Subordination of Debentures. Each holder of Debentures by its acceptance of such
Debentures authorizes and expressly directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XVI, and appoints the Trustee its attorney-in-fact for
such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the filing of a claim for the unpaid balance
of its Debentures in the form required in those proceedings.
Section 16.11. This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal or Interest or any Settlement
Amount on the Debentures by reason of any provision of this Article XVI shall
not be construed as preventing the occurrence of an Event of Default specified
in Section 7.01.
Section 16.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article XVI shall apply to amounts due to the Trustee pursuant to other
sections in this Indenture.
Section 16.13. No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 16.09, the holders of Senior Debt may, at
any time and from time to time, without the consent of or notice to the Trustee
or the holders of the Debentures, without incurring responsibility to the
holders of the Debentures and without impairing or releasing the subordination
provided in this Article XVI or the obligations hereunder of the holders of the
Debentures to the holders of Senior Debt, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding or secured; (b) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (c) release any Person liable in any manner for the
collection of Senior Debt; and (d) exercise or refrain from exercising any
rights against the Company and any other Person.
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Nothing contained in this Article XVI or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions
described in Section 16.02, from making payments of principal of and Interest
on, and the cash portion of all Settlement Amounts upon conversion of, the
Debentures, or from depositing with the Trustee any moneys for such payments
or (ii) the application by the Trustee of any moneys deposited with it for
the purpose of making such payments of principal of and Interest on, and the
cash portion of all Settlement Amounts upon conversion of, the Debentures, to
the holders entitled thereto unless at least two Business Days prior to the
date upon which such payment becomes due and payable or is otherwise
required, the Trustee shall have received the written notice provided for in
Section 16.02(b) or in Section 16.06. The Company shall give prompt written
notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of the Company.
Section 16.14. Acceleration of Debentures. If payment of the
Debentures is accelerated because of an Event of Default, the Company (or the
Trustee at the direction of the Company) shall promptly notify the holders of
Designated Senior Debt of the Company (or the representative of such Designated
Senior Debt) of the acceleration.
ARTICLE XVII
Guarantees
----------
Section 17.01. Unconditional Guarantee. Each of the Guarantors
hereby, jointly and severally and unconditionally guarantees, on a senior
subordinated basis (such guarantee to be referred to herein as a "Guarantee") to
each holder of a Debenture authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns that: (a) the principal of and Interest
on the Debentures shall be promptly paid in full when due (subject to any
applicable grace periods) whether at maturity, upon redemption, upon repurchase
at the option of holders pursuant to the provisions of the Debentures relating
thereto, by acceleration or otherwise, and interest on the overdue principal and
(to the extent permitted by law) Interest, if any, on the Debentures and all
other Obligations of the Company to the holders or the Trustee hereunder or
thereunder (including amounts due the Trustee under Article VIII hereof) and all
other Obligations, including the payment of the cash portion of all Settlement
Amounts as required upon conversion, shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Debentures or any of such
other Obligations, the same shall be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise,
subject, however, in the case of (a) and (b) to the limitations set forth in
Section 17.04. Failing payment when due of any amount so guaranteed, or failing
performance of any other obligation of the Company to the holders under this
Indenture or under the Debentures, for whatever reason, each Guarantor shall be
obligated to pay,
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or to perform or cause the performance of, the same immediately. An Event of
Default under this Indenture or the Debentures shall constitute an event of
default under this Guarantee, and shall entitle the holders of Debentures to
accelerate the Obligations of the Guarantors hereunder in the same manner and to
the same extent as the Obligations of the Company.
Each of the Guarantors hereby agrees that its Obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Debentures or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any holder of the Debentures
with respect to any provisions hereof or thereof, any release of any other
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Guarantee is affixed to any particular
Debenture, or any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a Guarantor. Each of the Guarantors
hereby waives the benefit of diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that its Guarantee
shall not be discharged except by complete performance of the Obligations
contained in the Debentures, this Indenture and this Guarantee. This
Guarantee is a guarantee of payment and not of collection. If any holder or
the Trustee is required by any court or otherwise to return to the Company or
to any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or such Guarantor, any amount paid
by the Company or such Guarantor to the Trustee or such holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor further agrees that, as between it, on the
one hand, and the holders of Debentures and the Trustee, on the other hand,
(a) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article VII for the purposes of this Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby, and (b) in the event of any
acceleration of such Obligations as provided in Article VII hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Guarantee.
No stockholder, officer, director, employee, agent or
incorporator, past, present or future, of any Guarantor, as such, shall have
any personal liability under this Guarantee by reason of his, her or its
status as such stockholder, officer, director, employee, agent or
incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata, based on the net assets of each Guarantor, determined in
accordance with GAAP.
Section 17.02. Limitations on Guarantees. The Obligations of each
Guarantor under its Guarantee are limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in
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respect of the Obligations of such other Guarantor under its Guarantee or
pursuant to its contribution Obligations under this Indenture, will result in
the Obligations of such Guarantor under the Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under any laws of the United
States, any state or territory of the United States or the District of Columbia.
Section 17.03. Execution and Delivery. Each of the Guarantors hereby
agrees that its Guarantee set forth in Section 17.01 shall remain in full force
and effect (unless released in accordance with Section 17.04) notwithstanding
any failure to endorse on any Debenture a notation of such Guarantee.
If an officer of a Guarantor whose signature is on this Indenture
no longer holds that office at the time the Trustee authenticates any
Debenture, such Guarantor's Guarantee of such Debenture shall be valid
nevertheless.
The delivery of any Debenture by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Guarantee set forth in this Indenture on behalf of each Guarantor.
Section 17.04. Release of a Guarantor. A Guarantor's Guarantee
pursuant to this Article XVII shall be released, and such Guarantor shall be
deemed released from all Obligations under this Indenture and the Debentures
without any further action required on the part of the Trustee or any holder of
a Debenture (i) at such time as such Guarantor does not have any Qualified
Indebtedness or Obligations in respect thereof outstanding that would have
required such Guarantor to enter into a Guarantee pursuant to Section 17.17,
(ii) upon consummation of any consolidation or merger of such Guarantor in
accordance with Article XII (other than with the Company or an Affiliate of the
Company), if after giving effect thereto such Guarantor does not have
outstanding any guarantee of any Qualified Indebtedness or Obligations in
respect thereof of the Company or any Subsidiary of the Company that would have
required such Guarantor to enter into a Guarantee pursuant to Section 17.17,
(iii) upon disposition of such Guarantor in its entirety to another Person
(other than the Company or an Affiliate of the Company), if after giving effect
thereto such Guarantor does not have outstanding any guarantee of any Qualified
Indebtedness or Obligations in respect thereof of the Company or any Subsidiary
of the Company that would have required such Guarantor to enter into a Guarantee
pursuant to Section 17.17 and (iv) upon the liquidation or dissolution of such
Guarantor, and, in the case of each of clauses (i) through (iii), the Company
provides an Officers' Certificate to the Trustee certifying that no such
Obligations are outstanding. Any Guarantor not so released shall remain or be
liable under its Guarantee as provided in this Article XVII. Concurrently with
the satisfaction and discharge of the Indenture under Article XIII hereof, the
Guarantors shall be released from all Obligations under this Indenture and the
Debentures.
The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and, upon request, an
Opinion of Counsel certifying as to the
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compliance with this Section 17.04; provided the legal counsel delivering such
Opinion of Counsel may rely as to matters of fact on one or more Officers'
Certificates of the Company.
The Trustee shall execute any documents reasonably requested by
the Company or a Guarantor in order to evidence the release of such Guarantor
from its Obligations under its Guarantee pursuant to this Article XVII.
Except as set forth in Article XII and this Section 17.04,
nothing contained in this Indenture or in any of the Debentures shall prevent
any consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any sale or conveyance of the property of
a Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.
Section 17.05. Waiver of Subrogation. Until this Indenture is
discharged and all of the Debentures are discharged and paid in full, each
Guarantor hereby irrevocably waives and agrees not to exercise any claim or
other rights which it may now or hereafter acquire against the Company that
arise from the existence, payment, performance or enforcement of the Company's
Obligations under the Debentures or this Indenture and such Guarantor's
Obligations under its Guarantee under this Indenture, in any such instance
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, and any right to participate in any
claim or remedy of the holders of Debentures against the Company, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and any amounts owing to the Trustee or the holders of Debentures under
the Debentures, this Indenture, or any other document or instrument delivered
under or in connection with such agreements or instruments, shall not have been
paid in full, such amount shall have been deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the Trustee
or the holders of Debentures and shall forthwith be paid to the Trustee for the
benefit of itself or such holders to be credited and applied to the Obligations
in favor of the Trustee or the holders, as the case may be, whether matured or
unmatured, in accordance with the terms of this Indenture. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 17.05 is knowingly made in contemplation of such benefits.
Section 17.06. Obligations Continuing. Subject to Section 17.04, the
Obligations of each Guarantor hereunder shall be continuing and shall remain in
full force and effect until all the Obligations have been paid and satisfied in
full.
Section 17.07. Obligations Reinstated. Subject to Section 17.04, the
Obligations of each Guarantor hereunder shall continue to be effective or shall
be
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reinstated, as the case may be, if at any time any payment which would otherwise
have reduced the Obligations of any Guarantor hereunder (whether such payment
shall have been made by or on behalf of the Company or by or on behalf of a
Guarantor) is rescinded or reclaimed from any of the holders of Debentures upon
the insolvency, bankruptcy, liquidation or reorganization of the Company or any
Guarantor or otherwise, all as though such payment had not been made. If demand
for, or acceleration of the time for, payment by the Company is stayed upon the
insolvency, bankruptcy, liquidation or reorganization of the Company, all such
Obligations otherwise subject to demand for payment or acceleration shall
nonetheless be payable by each Guarantor as provided herein.
Section 17.08. Waiver. Without in any way limiting the provisions of
Section 17.01, each Guarantor hereby waives notice or proof of reliance by the
holders of Debentures upon the Obligations of any Guarantor hereunder, and
diligence, presentment, demand for payment on the Company, protest or notice of
dishonor of any of the Obligations.
Section 17.09. No Obligation To Take Action Against the Company.
Neither the Trustee nor any other Person shall have any obligation to enforce or
exhaust any rights or remedies or to take any other steps under any security for
the Obligations or against the Company or any other Person or any property of
the Company or any other Person before the Trustee is entitled to demand payment
and performance by any or all Guarantors of their liabilities and Obligations
under this Indenture.
Section 17.10. Default and Enforcement. If any Guarantor fails to
pay in accordance with Section 17.01, the Trustee may proceed in its name as
trustee hereunder in the enforcement of the Guarantee of any such Guarantor and
such Guarantor's Obligations hereunder by any remedy provided by law, whether by
legal proceedings or otherwise, and to recover from such Guarantor the
Obligations under this Indenture.
Section 17.11. Amendment, Etc. No amendment, modification or waiver
of any provision of this Indenture relating to any Guarantor or consent to any
departure by any Guarantor or any other Person from any such provision will in
any event be effective unless it is signed by such Guarantor and the Trustee,
other than a release pursuant to Section 17.04.
Section 17.12. Acknowledgment. Each Guarantor hereby acknowledges
communication of the terms of this Indenture and the Debentures and consents to
and approves of the same.
Section 17.13. Costs and Expenses. Each Guarantor shall pay on
demand by the Trustee any and all reasonable costs, fees and expenses
(including, without limitation, reasonable legal fees and disbursements)
incurred by the Trustee, its agents, advisors and counsel or any of the holders
of Debentures in enforcing any of their rights under any Guarantee.
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Section 17.14. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee or the holders
of Debentures, any right, remedy, power or privilege under this Indenture or the
Debentures, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Indenture or the
Debentures preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges in the Guarantee under this Indenture, the Debentures and any other
document or instrument between a Guarantor and/or the Company and the Trustee
are cumulative and not exclusive of any rights, remedies, powers and privilege
provided by law.
Section 17.15. Successors and Assigns. Each Guarantee shall be
binding upon and inure to the benefit of each Guarantor and the Trustee and the
other holders of Debentures and their respective successors and permitted
assigns, except that no Guarantor may assign any of its Obligations hereunder.
Section 17.16. Contribution. In order to provide for just and
equitable contribution among the Guarantors, the Guarantors agree, inter se,
that in the event any payment or distribution is made by any Guarantor (a
"Funding Guarantor") under its Guarantee, such Funding Guarantor shall be
entitled to contribution from all other Guarantors in a pro rata amount based on
the net assets (determined in accordance with GAAP) of each Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's Obligations with respect to the
Debentures or any other Guarantor's Obligations with respect to its Guarantee
hereunder.
Section 17.17. Future Guarantors. The Company shall cause each
Subsidiary of the Company (including any Subsidiary acquired or formed
subsequent to the Original Issue Date and any Subsidiary that was previously
released from a Guarantee) that guarantees or otherwise incurs any Obligations
in respect of Qualified Indebtedness (whether outstanding on the Original Issue
Date or subsequently incurred) to Guarantee the Obligations under this Indenture
and the Debentures on the terms set forth in this Article XVII and to execute
and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Subsidiary will provide such
Guarantee and become party to this Indenture as a Guarantor. Notwithstanding the
foregoing, no Subsidiary of the Company organized outside of the United States
of America shall be required to become a Guarantor pursuant to this Section
17.17 unless such Subsidiary otherwise guarantees Qualified Indebtedness of the
Company or any Subsidiary of the Company organized in the United States of
America. Each such supplemental indenture shall be executed and delivered and
each such Guarantee shall become effective concurrently with the incurrence of
such Qualified Indebtedness.
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ARTICLE XVIII
Subordination of the Guarantees
-------------------------------
Section 18.01. Guarantee Obligations Subordinated to Guarantor
Senior Debt. Each Guarantor covenants and agrees, and the Trustee and each
holder of the Debentures by its acceptance thereof likewise covenant and agree,
that all Guarantees shall be issued subject to the provisions of this Article
XVIII; and each Person holding any Guarantee, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that all
payments of the principal of and Interest on the Debentures pursuant to the
Guarantee, as well as payments of the cash portion of any Settlement Amount upon
conversion and including any deposit to the trust described in Section 13.01(a),
made by or on behalf of such Guarantor shall, to the extent and in the manner
set forth in this Article XVIII, be subordinated and junior in right of payment
to the prior payment in full in cash of all amounts payable under Guarantor
Senior Debt of such Guarantor, whether outstanding on the Original Issue Date or
thereafter incurred.
Section 18.02. No Payment on Guarantee in Certain Circumstances. (a)
No direct or indirect payment by or on behalf of any Guarantor of principal of
or Interest on the Debentures, or payments of the cash portion of any Settlement
Amount upon conversion or any deposit to the trust described in Section
13.01(a), whether pursuant to the terms of the Debentures or the Guarantees,
upon acceleration, pursuant to Article III or otherwise, shall be made to the
holders of Debentures (except that holders of Debentures may receive and retain
payments from the trust described in Section 13.01(a)) if (i) a default in the
payment of the principal of or premium, if any, or interest on Designated
Guarantor Senior Debt occurs and is continuing beyond any applicable period of
grace or (ii) any other default occurs and is continuing with respect to
Designated Guarantor Senior Debt that permits holders of the Designated
Guarantor Senior Debt as to which such default relates to accelerate its
maturity and the Trustee receives a written notice of such other default (a
"Guarantor Payment Blockage Notice") from the Company or a Guarantor or the
holders of any Designated Guarantor Senior Debt (with a copy to the Company)
until all Obligations with respect to such Designated Guarantor Senior Debt are
paid in full in cash; provided, that payments on the Debentures shall be resumed
(x) in the case of a payment default, upon the date on which such default is
cured, waived or ceases to exist and (y) in case of a nonpayment default, the
earlier of the date on which such nonpayment default is cured, waived or ceases
to exist and 179 days after the date on which the applicable Guarantor Payment
Blockage Notice is received by the Trustee (such period being referred to herein
as the "Guarantor Payment Blockage Period"), unless the maturity of any
Designated Guarantor Senior Debt has been accelerated (and written notice of
such acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Debentures to the
contrary, (x) in no event shall a Guarantor Payment Blockage Period extend
beyond 179 days from the date the Guarantor Payment Blockage Notice in
respect thereof was given and (y) not more than one Guarantor Payment
Blockage Period may be commenced with respect to
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the Debentures during any period of 360 consecutive days. No nonpayment default
that existed or was continuing on the date of delivery of any Guarantor Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Guarantor Payment Blockage Notice (it being understood that any subsequent
action, or any breach of any covenant for a period commencing after the date of
receipt by the Trustee of such Guarantor Payment Blockage Notice, that, in
either case, would give rise to such a default pursuant to any provisions under
which a default previously existed or was continuing shall constitute a new
default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any holder of Debentures when such payment
is prohibited by Section 18.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such
Designated Guarantor Senior Debt or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Designated
Guarantor Senior Debt may have been issued, as their respective interests may
appear, but only to the extent that, upon notice from the Trustee to the holders
of such Designated Guarantor Senior Debt that such prohibited payment has been
made, the holders of such Designated Guarantor Senior Debt (or their
representative or representatives or a trustee) notify the Trustee in writing of
the amounts then due and owing on such Designated Guarantor Senior Debt, if any,
and only the amounts specified in such notice to the Trustee shall be paid to
the holders of such Designated Guarantor Senior Debt.
Section 18.03. Payment Over of Proceeds Upon Dissolution, Etc. (a)
Upon any payment or distribution of assets or securities of any Guarantor of any
kind or character, whether in cash, property or securities, upon any dissolution
or winding-up or liquidation or reorganization of such Guarantor, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
similar proceedings, an assignment for the benefit of creditors or any
marshaling of such Guarantor's assets, the holders of Guarantor Senior Debt of
such Guarantor shall be entitled to receive payment in full in cash of all
Obligations due in respect of such Guarantor Senior Debt before the holders of
the Debentures or the Trustee on behalf of such holders shall be entitled to
receive any payment by such Guarantor of the principal of or Interest on the
Debentures, or the cash portion of any Settlement Amount upon conversion,
pursuant to its Guarantee, or any payment to acquire any of the Debentures for
cash, property or securities, or any distribution with respect to the Debentures
of any cash, property or securities (except that the holders may receive and
retain Permitted Junior Securities and payments from the trust described under
Section 13.01(a)). Before any payment (other than Permitted Junior Securities or
payments from such trust) may be made by, or on behalf of, any Guarantor of the
principal of or Interest on the Debentures, or the cash portion of any
Settlement Amount upon conversion, upon any such dissolution or winding-up or
liquidation or reorganization, any payment or distribution of assets or
securities of such Guarantor of any kind or character, whether in cash, property
or securities, to which the holders of the Debentures or the Trustee on their
behalf would be entitled, but for the subordination provisions of this
Indenture, shall be made by such Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
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distribution, directly to the holders of the Guarantor Senior Debt of such
Guarantor (pro rata to such holders on the basis of the respective amounts of
such Guarantor Senior Debt held by such holders) or their representatives or to
the trustee or trustees or agent or agents under any agreement or indenture
pursuant to which any such Guarantor Senior Debt may have been issued, as their
respective interests may appear, to the extent necessary to pay all such
Guarantor Senior Debt in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of a Guarantor of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any holder of Debentures at a
time when such payment or distribution is prohibited by Section 18.03(a) and
before all Obligations in respect of the Guarantor Senior Debt of such Guarantor
are paid in full in cash, or payment provided for, such payment or distribution
shall be received and held in trust for the benefit of, and shall be paid over
or delivered to, the holders of such Guarantor Senior Debt (pro rata to such
holders on the basis of the respective amounts of Guarantor Senior Debt held by
such holders) or their respective representatives, or to the trustee or trustees
or agent or agents under any indenture pursuant to which any of such Guarantor
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of the Guarantor Senior Debt remaining unpaid until
all such Guarantor Senior Debt has been paid in full in cash after giving effect
to any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt; provided that the Trustee shall be
entitled to receive from the holders of Guarantor Senior Debt written notice of
the amounts owing on the Guarantor Senior Debt.
The consolidation of a Guarantor with, or the merger of a
Guarantor with or into, another Person or the liquidation or dissolution of a
Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another Person upon the terms
and conditions provided in Article XII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section
18.03 if such other Person shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article XII.
Section 18.04. Subrogation. Upon the payment in full in cash of all
Guarantor Senior Debt of a Guarantor, or provision for payment, the holders of
the Debentures shall be subrogated to the rights of the holders of Guarantor
Senior Debt to receive payments or distributions of cash, property or securities
of such Guarantor made on Guarantor Senior Debt of such Guarantor until the
principal of and Interest on, and all payments of the cash portion of all
Settlement Amounts upon conversion of, the Debentures shall be paid in full in
cash; and, for the purposes of such subrogation, no payments or distributions to
the holders of Guarantor Senior Debt of any cash, property or securities to
which the holders of the Debentures or the Trustee on their behalf would be
entitled except for the provisions of this Article XVIII, and no payment over
pursuant to the provisions of this Article XVIII to the holders of the Guarantor
Senior Debt by
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holders of the Debentures or the Trustee on their behalf shall, as between such
Guarantor, its creditors other than holders of such Guarantor Senior Debt of
such Guarantor, and the holders of the Debentures, be deemed to be a payment by
such Guarantor to or on account of the Guarantor Senior Debt of such Guarantor.
It is understood that the provisions of this Article XVIII are and are intended
solely for the purpose of defining the relative rights of the holders of the
Debentures, on the one hand, and the holders of Guarantor Senior Debt, on the
other hand.
If any payment or distribution to which the holders of the
Debentures would otherwise have been entitled but for the provisions of this
Article XVIII shall have been applied, pursuant to the provisions of this
Article XVIII, to the payment of all amounts payable under Guarantor Senior
Debt, then and in such case, the holders of the Debentures shall be entitled to
receive from the holders of such Guarantor Senior Debt any payments or
distributions received by such holders of Guarantor Senior Debt in excess of the
amount required to make payment in full, or provision for payment, of such
Guarantor Senior Debt.
Section 18.05. Obligations of Guarantor Unconditional. Nothing
contained in this Article XVIII or elsewhere in this Indenture or in the
Debentures is intended to or shall impair, as between any Guarantor and the
holders of the Debentures, the obligation of such Guarantor, which is absolute
and unconditional, to pay to the holders of the Debentures the principal of and
Interest on the Debentures as and when the same shall become due and payable,
and all cash Settlement Amounts as required upon conversion, in accordance with
the terms of its Guarantee, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Guarantors other
than the holders of Guarantor Senior Debt, nor shall anything herein or therein
prevent the holder of any Debenture or the Trustee on their behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article XVIII of the
holders of Guarantor Senior Debt in respect of cash, property or securities of
the Guarantors received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article XVIII shall restrict the right of the Trustee or
the holders of Debentures to take any action to declare the Debentures to be
due and payable prior to their Stated Maturity pursuant to Section 7.01 or to
pursue any rights or remedies hereunder; provided that all Guarantor Senior
Debt of any Guarantor then due and payable shall first be paid in full before
the holders of the Debentures or the Trustee are entitled to receive any
direct or indirect payment from such Guarantor of principal of or Interest
on, or the cash portion of any Settlement Amount upon conversion of, the
Debentures pursuant to such Guarantor's Guarantee.
Section 18.06. Notice to Trustee. The Company and the Guarantors
shall give prompt written notice to the Trustee of any fact known to the Company
or the Guarantors which would prohibit the making of any payment to or by the
Trustee in respect of the Guarantees pursuant to the provisions of this Article
XVIII. The Trustee
105
shall not be charged with knowledge of the existence of any event of default
with respect to any Guarantor Senior Debt or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an officer of the Company or a Guarantor, or by a holder
of Guarantor Senior Debt or trustee or agent therefor; and prior to the receipt
of any such written notice, the Trustee shall, subject to Article VIII, be
entitled to assume that no such facts exist; provided that if the Trustee shall
not have received the notice provided for in this Section 18.06 at least two
Business Days prior to the date upon which by the terms of this Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or Interest on any Debenture and any Settlement
Amount), then, regardless of anything herein to the contrary, the Trustee shall
have full power and authority to receive any moneys from the Guarantors 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. Nothing contained in this Section 18.06 shall limit the right
of the holders of Guarantor Senior Debt to recover payments as contemplated by
Section 18.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Guarantor Senior Debt (or a trustee on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of
Guarantor Senior Debt or a trustee or representative on behalf of any such
holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant
to this Article XVIII, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Debt 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 XVIII, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 18.07. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities of
any Guarantor referred to in this Article XVIII, the Trustee and the holders of
the Debentures shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon 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 Debentures for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of Guarantor Senior Debt and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XVIII.
106
Section 18.08. Trustee's Relation to Guarantor Senior Debt. The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article XVIII with respect to any Guarantor Senior Debt 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 Guarantor Senior Debt, and nothing in this Indenture shall
deprive the Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVIII, and no
implied covenants or obligations with respect to the holders of Guarantor
Senior Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Debt. The Trustee shall not be liable to any such holders if
the Trustee shall in good faith mistakenly pay over or distribute to holders
of Debentures or to the Company or to any other Person cash, property or
securities to which any holders of Guarantor Senior Debt shall be entitled by
virtue of this Article XVIII or otherwise.
Section 18.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor Senior Debt. No right of any
present or future holders of any Guarantor Senior Debt to enforce subordination
as provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of any Guarantor or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by any Guarantor
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article XVIII are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Guarantor Senior Debt.
Section 18.10. Debentureholders Authorize Trustee to Effectuate
Subordination of Guarantees. Each holder of Debentures by its acceptance of such
Debentures authorizes and expressly directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XVIII, and appoints the Trustee its attorney-in-fact
for such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of any Guarantor (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its Debentures in the form required in those
proceedings.
Section 18.11. This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal of or Interest or any
Settlement Amount on the Debentures by reason of any provision of this Article
XVIII shall not be construed as preventing the occurrence of an Event of Default
specified in Section 7.01.
Section 18.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article XVIII shall apply to amounts due to the Trustee pursuant to other
sections in this Indenture.
107
Section 18.13. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 18.09, the holders of
Guarantor Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the holders of the Debentures, without
incurring responsibility to the holders of the Debentures and without impairing
or releasing the subordination provided in this Article XVIII or the obligations
hereunder of the holders of the Debentures to the holders of Guarantor Senior
Debt, do any one or more of the following: (a) change the manner, place or terms
of payment or extend the time of payment of, or renew or alter, Guarantor Senior
Debt or any instrument evidencing the same or any agreement under which
Guarantor Senior Debt is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Debt; (c) release any Person liable in any manner for the
collection of Guarantor Senior Debt; and (d) exercise or refrain from exercising
any rights against the Guarantor and any other Person.
Section 18.14. Payments May be Paid Prior to Dissolution. Nothing
contained in this Article XVIII or elsewhere in this Indenture shall prevent (i)
the Guarantors, except under the conditions described in Section 18.02, from
making payments of principal of and Interest on, and the cash portion of all
Settlement Amounts upon conversion of, the Debentures, or from depositing with
the Trustee any moneys for such payments or (ii) the application by the Trustee
of any moneys deposited with it for the purpose of making such payments of
principal of and Interest on, and the cash portion of all Settlement Amounts
upon conversion of, the Debentures, to the holders entitled thereto unless at
least two Business Days prior to the date upon which such payment becomes due
and payable or is otherwise required, the Trustee shall have received the
written notice provided for in Section 18.02(b) or in Section 18.06. The Company
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of any Guarantor.
ARTICLE XIX
Miscellaneous Provisions
Section 19.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 19.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 19.03. Addresses for Notices, Etc. Any request, notice or
demand which by any provision of this Indenture is required or permitted to be
given or
108
served by the Trustee or by the holders of Debentures on the Company or any
Guarantor shall be deemed to have been sufficiently given or made, for all
purposes, if delivered by messenger or overnight carrier, given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box or sent by facsimile transmission addressed as follows: to Scientific
Games Corporation, 750 Lexington Avenue, New York, NY 10022, Facsimile (212)
754-2372, Attention: Martin E. Schloss, Esq. Any notice, direction, request or
demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if delivered by messenger or
overnight carrier, given or served by being deposited, postage prepaid, by
registered or certified mail in a post office letter box or sent by facsimile
transmission addressed as follows: Wells Fargo Bank, National Association, 213
Court Street, Suite 703, Middletown, CT 06457, Facsimile (860) 704-6219,
Attention Corporate Trust Department; provided that the Trustee shall not be
deemed to have received notice until such notice is actually received.
The Company, any Guarantor or the Trustee, by notice to the
other, may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication mailed to a Debentureholder shall be
mailed to him by first class mail, postage prepaid, at his address as it
appears on the Debenture Register and shall be sufficiently given to him if
so mailed within the time prescribed.
Failure to mail a notice or communication to a Debentureholder or
any defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
Section 19.04. Governing Law. THIS INDENTURE AND THE DEBENTURES WILL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 19.05. Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon any application, request or demand by the Company
to the Trustee to take any action under any of the provisions of this Indenture,
the Company shall furnish to the Trustee an Officers' Certificate stating that,
in the opinion of the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with, and an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
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: (1) a statement that
the person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of
109
the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based; (3) a statement that, in the opinion
of such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public officials.
Section 19.06. Legal Holidays. In any case in which the date of
maturity of Interest on or principal of the Debentures or the Redemption Date of
any Debenture or any Repurchase Date with respect to any Debenture or any other
payment date will not be a Business Day, then payment of such Interest on or
principal of the Debentures 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 Redemption Date or the Repurchase Date or such other
payment date, as the case may be, and no Interest shall accrue for the period
from and after such date.
Section 19.07. Company Responsible for Making Calculations. The
Company will be responsible for making all calculations called for under this
Indenture. These calculations include, but are not limited to, determination of
the Current Market Price, Last Reported Sale Price, the amount of accrued
Interest payable on the Debentures and the Conversion Rate and Conversion Price
of the Debentures. The Company will make these calculations in good faith and,
absent manifest error, these calculations will be final and binding on the
Debentureholders. Promptly after the calculation thereof, the Company will
provide to each of the Trustee and the Conversion Agent an Officers' Certificate
setting forth a schedule of its calculations, and each of the Trustee and the
Conversion Agent is entitled to conclusively rely upon the accuracy of such
calculations without independent verification. The Trustee will forward the
Company's calculations to any holder of Debentures upon the written request of
such holder.
Section 19.08. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that this Section 19.08 shall not require this Indenture
or the Trustee to be qualified under the Trust Indenture Act prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act, nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
110
Section 19.09. No Security Interest Created. Except as provided in
Section 8.06, nothing in this Indenture or in the Debentures, expressed or
implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect, in any jurisdiction in which property of the Company or its Subsidiaries
is located.
Section 19.10. Benefits of Indenture. Nothing in this Indenture or
in the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent, any Debenture Registrar and their successors
hereunder and the holders of Debentures, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 19.11. Table of Contents, Headings, Etc. The table of
contents and the titles and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 19.12. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 19.13. Severability. In case any provision in this Indenture
or in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 19.14. Tax Treatment. The Company agrees, and by acceptance
of a beneficial ownership interest in the Debentures each beneficial holder of
the Debentures will be deemed to have agreed, for United States federal income
tax purposes to treat the Debentures as indebtedness that is not subject to the
contingent payment debt instrument regulations under Treas. Reg. Sec. 1.1275-4.
Wells Fargo Bank, National Association hereby accepts the trusts
in this Indenture declared and provided, upon the terms and conditions herein
above set forth.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
111
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed.
SCIENTIFIC GAMES CORPORATION, as Issuer,
by__________________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed.
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee,
by__________________________________
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed.
SCIENTIFIC GAMES MANAGEMENT
CORPORATION, as Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES HOLDINGS
CORPORATION, as Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES (GREECE), INC., as
Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES ACQUISITION, INC.,
as Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES FINANCE
CORPORATION, as Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES INTERNATIONAL,
INC., as Guarantor,
by
-------------------------------
Name:
Title:
MDI ENTERTAINMENT, LLC, as Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES ROYALTY
CORPORATION, as Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES RACING, LLC, as
Guarantor,
by
-------------------------------
Name:
Title:
AUTOTOTE INTERNATIONAL, INC., as
Guarantor,
by
-------------------------------
Name:
Title:
SG RACING, INC., as Guarantor,
by
-------------------------------
Name:
Title:
AUTOTOTE ENTERPRISES, INC., as
Guarantor,
by
-------------------------------
Name:
Title:
AUTOTOTE KENO CORPORATION, as
Guarantor,
by
-------------------------------
Name:
Title:
AUTOTOTE GAMING, INC., as Guarantor,
by
-------------------------------
Name:
Title:
AUTOTOTE DOMINICANA INC., as
Guarantor,
by
-------------------------------
Name:
Title:
AUTOTOTE INTERACTIVE, INC., as
Guarantor,
by
-------------------------------
Name:
Title:
SCIENTIFIC GAMES ONLINE
ENTERTAINMENT SYSTEMS, INC., as
Guarantor,
by
-------------------------------
Name:
Title:
EXHIBIT A
[Include only for Global Debentures:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK,
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR 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 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.]
[Include only for Debentures that are Restricted Securities:]
[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE ``SECURITIES ACT''), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER
OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY
INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION
OF SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), ONLY (A) TO SCIENTIFIC GAMES CORPORATION (THE
"ISSUER"), (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT
THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT
A-1
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR
(D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF
THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY
TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION).]
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION
RIGHTS AGREEMENT DATED DECEMBER 23, 2004 AND, BY ITS ACCEPTANCE HEREOF,
AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION
RIGHTS AGREEMENT.
A-2
scientific games corporation
0.75% CONVERTIBLE SENIOR subordinated DEBENTURE DUE 2024
CUSIP: 80874P AC 3
No. ___ $[?]
Scientific Games Corporation, a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received hereby promises to pay
to [?] or its registered assigns, the principal sum of [?] Dollars [, as such
sum may be increased or reduced as reflected on the records of the Trustee in
accordance with the Indenture](1) on December 1, 2024 in accordance with the
terms of the Indenture, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest thereon from December 23, 2004
or from the most recent Interest Payment Date to which Interest has been paid
or duly provided for, on June 1 and December 1 of each year, commencing
June 1, 2005, in like coin or currency, at the rate of 0.75% per annum until,
but not including, June 1, 2010, and at the rate of 0.50% per annum on June
1, 2010 and thereafter, until the principal amount is paid or made available
for payment on December 1, 2024, or upon acceleration, or until such date on
which the Debentures are redeemed, repurchased or converted as provided in
the Indenture. Pursuant to the Registration Rights Agreement, in the event
that a Registration Default (as defined in the Registration Rights Agreement)
occurs, subject to certain exceptions set forth in the Registration Rights
Agreement, Additional Amounts will accrue on this Debenture (if this
Debenture is then a "Transfer Restricted Security" as defined in the
Registration Rights Agreement) at a rate of 0.25% per annum for the first
90-day period during which a Registration Default shall have occurred and be
continuing and 0.50% per annum thereafter from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. All references in this
Debenture and in the Indenture to Interest payable on any Debenture include
any such Additional Amounts. Except as otherwise provided in the Indenture,
the Interest payable on the Debenture pursuant to the Indenture on any June 1
or December 1 will be paid to the Person entitled thereto as it appears in
the Debenture Register at the close of business on the Regular Record Date,
which shall be the May 15 or November 15 (whether or not a Business Day) next
preceding such June 1 or December 1, as provided in the Indenture; provided
that any such Interest not punctually paid or duly provided for shall be
payable as provided in the Indenture. The Company shall pay Interest (i) on
any Debentures in certificated form by check mailed to the address of the
Person entitled thereto as it appears in the Debenture Register (or, upon
written notice, by wire transfer in immediately available funds, if such
Person is entitled
- --------------------
(1) Include if Debenture is a Global Debenture.
A-3
to Interest on Debentures with an aggregate principal amount in excess of
$2,000,000) (except at Stated Maturity, at which time Interest payable on the
Debentures shall be payable with the principal amount at the Company's office or
agency in New York City) or (ii) on any Global Debenture by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
The Company promises to pay interest on overdue principal and (to
the extent that payment of such interest is enforceable under applicable law)
Interest at the rate then borne by the Debentures.
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof, including, without limitation, provisions giving
the holder of this Debenture the right to convert this Debenture into cash or
a combination of cash and Common Stock of the Company, as the case may be, on
the terms and subject to the limitations referred to on the reverse hereof
and as more fully specified in the Indenture. Such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
THIS DEBENTURE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee under the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this Debenture to be
duly executed.
SCIENTIFIC GAMES CORPORATION
by________________________________
Name:
Title:
[Date of authentication]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
by________________________________
Authorized Signatory
A-5
FORM OF REVERSE OF DEBENTURE
SCIENTIFIC GAMES CORPORATION
0.75% CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2024
This Debenture is one of a duly authorized issue of Debentures of
the Company, designated as its 0.75% Convertible Senior Subordinated
Debentures due 2024 (herein called the "Debentures"), limited in aggregate
principal amount to $250,000,000 (or $275,000,000 if the Initial Purchasers
of the Debentures exercise in full their option to purchase additional
Debentures), issued and to be issued under and pursuant to an Indenture dated
as of December 23, 2004 (herein called the "Indenture"), among the Company,
the Guarantors and Wells Fargo Bank, National Association, as trustee (herein
called the "Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company, the Guarantors and the holders of the Debentures.
The payment by the Company of the principal of and Interest on,
as well as the payment of cash due upon conversion of, the Debentures is
fully and unconditionally guaranteed on a joint and several senior
subordinated basis by each Guarantor that is a party to the Indenture and,
subject to certain exceptions, may become guaranteed by any Subsidiary of the
Company that guarantees or otherwise incurs Qualified Indebtedness (as
defined in, and to the extent set forth in, the Indenture). Upon discharge of
all such Qualified Indebtedness of a Guarantor, or the discharge of all
guarantees by such Guarantor of Qualified Indebtedness of the Company and its
Subsidiaries after giving effect to the merger or sale of such Guarantor, or
as otherwise set forth in the Indenture, its Guarantee of the Debentures will
be released.
The Debentures are subordinated to Senior Debt of the Company and
the Guarantor Senior Debt of the Guarantors on the terms and subject to the
conditions set forth in the Indenture. To the extent provided in the
Indenture, Senior Debt and Guarantor Senior Debt must be paid before the
Debentures may be paid (including payments in respect of the cash required to
be delivered upon conversion). Each holder by accepting a Debenture agrees
to the subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.
In case an Event of Default shall have occurred and be
continuing, the principal of and accrued Interest on all Debentures may be
declared to be by either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Debentures then outstanding, and upon said
declaration shall become, due and payable immediately, in the manner, with
the effect and subject to the conditions provided in the Indenture.
A-6
The Indenture contains provisions permitting the Company, the
Guarantors and the Trustee, with the consent of the holders of at least a
majority in aggregate principal amount of the Debentures at the time
outstanding, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Debentures, subject to the exceptions set forth in
Sections 11.01 and 11.02 of the Indenture. The holders of a majority in
aggregate principal amount of the Debentures at the time outstanding may on
behalf of the holders of all of the Debentures waive any past default or
Event of Default under the Indenture and its consequences, subject to the
exceptions set forth in Section 7.07 of the Indenture. Any such consent or
waiver by the holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Debenture and any Debentures which may be
issued in exchange or substitution hereof, irrespective of whether or not any
notation thereof is made upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligations of the
Company or the Guarantors, which are absolute and unconditional, to pay the
principal of and Interest on this Debenture at the place, at the respective
times, at the rate and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a
360-day year of twelve 30-day months.
The Debentures are issuable in fully registered form, without
interest coupons, in denominations of $1,000 principal amount and any
multiple of $1,000. At the office or agency of the Company maintained for
such purpose, and in the manner and subject to the limitations provided in
the Indenture, without payment of any service charge but with payment of a
sum sufficient to cover any tax, assessment or other governmental charge that
may be imposed in connection with any registration or exchange of Debentures,
Debentures may be exchanged for a like aggregate principal amount of
Debentures of any other authorized denominations.
At any time on or after June 1, 2010, the Debentures may be
redeemed at the option of the Company, in whole or in part, in cash upon
mailing a notice of such redemption not less than 30 days but not more than
60 days before the Redemption Date to the holders of Debentures at their last
registered addresses as set forth in the Debenture Register, all as provided
in the Indenture, at a Redemption Price equal to 100% of the principal amount
of Debentures being redeemed plus accrued and unpaid Interest to, but
excluding, the Redemption Date; provided that if the applicable Redemption
Date is after a Regular Record Date and on or prior to the corresponding
Interest Payment Date, the Interest payable on such Interest Payment Date
shall be paid on the Redemption Date to the holder of record on the
applicable Regular Record Date.
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The Debentures will not be redeemable at the option of the
Company before June 1, 2010, except that the Company may require holders to
dispose of Debentures or, if not so disposed, may redeem such holders'
Debentures in order to comply with applicable gaming laws as set forth in
Article IV of the Indenture.
The Company may not give notice of any redemption of the
Debentures if a default in the payment of Interest on the Debentures has
occurred and is continuing.
The Debentures are not subject to redemption through the
operation of any sinking fund.
If a Fundamental Change occurs at any time prior to maturity of
the Debentures, the holders will have the right to require the Company to
repurchase all or any portion of the Debentures on a Fundamental Change
Repurchase Date specified by the Company, which shall be no later than
35 days after notice thereof, at a Fundamental Change Repurchase Price equal
to 100% of the principal amount thereof, together with accrued Interest to
(but excluding) the Fundamental Change Repurchase Date; provided that if the
applicable Fundamental Change Repurchase Date is after a Regular Record Date
and on or prior to the corresponding Interest Payment Date, the Interest
payable on such Interest Payment Date shall be paid on such Interest Payment
Date to the holders of record of such Debentures on the Regular Record Date
instead of the holders surrendering such Debentures for repurchase on such
date. The Company shall mail to all holders of record of the Debentures a
notice of the occurrence of a Fundamental Change and of the repurchase right
arising as a result thereof on or before the 30th day after the occurrence of
such Fundamental Change. For a Debenture to be so repurchased at the option
of the holder, the Company must receive at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, the form entitled "Form of Fundamental Change Repurchase Election"
on the reverse of the Debenture duly completed at any time prior to the close
of business on the Business Day immediately preceding the Fundamental Change
Repurchase Date, and such Debenture, duly endorsed for transfer (or if such
Debenture is a Global Debenture, book-entry transfer of such Debenture), as
set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the holders
will have the right to require the Company to repurchase all or any portion
of the Debentures on June 1, 2010, December 1, 2014 and December 1, 2019 at a
Company Repurchase Price of 100% of the principal amount, plus any accrued
and unpaid Interest on such Debentures to, but excluding, the Company
Repurchase Date; provided that the Interest payable on the applicable Company
Repurchase Date shall be paid on such Interest Payment Date to the holders of
record of such Debentures on the Regular Record Date instead of the holders
surrendering such Debentures for repurchase on such date. To exercise such
right, a holder must deliver to the Company the form entitled "Form of
Company Repurchase Election" on the reverse of the Debenture duly completed
at any time from the opening of business on the date that is 22 Business Days
prior to such Company Repurchase Date until the close of business on the date
that is two Business Days prior to the Company Repurchase Date, and such
Debenture, duly endorsed for
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transfer (or if such Debenture is a Global Debenture, book-entry transfer of
such Debenture), as set forth in the Indenture.
The Company Repurchase Price to be paid on any of June 1, 2010,
December 1, 2014 and December 1, 2019 and the Fundamental Change Repurchase
Price to be paid on any Fundamental Change Repurchase Date shall be paid in
cash, subject to the terms and conditions of the Indenture.
Holders have the right to withdraw any Repurchase Election by
delivering to the Paying Agent a written notice of withdrawal up to the close
of business on the Business Day immediately preceding the Repurchase Date,
all as provided in the Indenture.
If money sufficient to pay the Repurchase Price with respect to
all Debentures or portions thereof to be repurchased as of any Repurchase
Date is deposited with the Paying Agent, then on and after such Repurchase
Date (provided that payment therefrom is not prohibited by Article XVI or
XVIII of the Indenture), Interest will cease to accrue on such Debentures (or
portions thereof), and the holder thereof shall have no other rights as such
other than the right to receive the Repurchase Price upon surrender of such
Debenture.
Subject to the occurrence of certain events and in compliance
with the provisions of the Indenture, prior to the Stated Maturity of the
Debentures, the holder hereof has the right, at its option, to convert each
$1,000 principal amount of the Debentures into 34.3643 shares of the
Company's Common Stock (equivalent to a Conversion Price of approximately
$29.10 per share), as such shares shall be constituted at the date of
conversion, to be settled in cash or a combination of cash and shares of
Common Stock, as described in the Indenture, and subject to adjustment from
time to time as provided in the Indenture, upon surrender of this Debenture
(if certificated) with the form entitled "Form of Conversion Notice" on the
reverse hereof duly completed and manually signed, to the Company at the
office or agency of the Conversion Agent, together with any funds required
pursuant to the Indenture, and, unless the shares issuable on conversion are
to be issued in the same name as this Debenture, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company
duly executed by, the holder or by his duly authorized attorney. The Company
will notify the holder thereof of any event triggering the right to convert
the Debentures as specified above in accordance with the Indenture. In order
to exercise the conversion right with respect to any interest in a Global
Debenture, the holder must complete the appropriate instruction form pursuant
to the Depositary's book-entry conversion program, deliver by book-entry
delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required pursuant to the terms of the
Indenture. Upon conversion, the Company will deliver cash equal to the
lesser of the aggregate principal amount of Debentures being converted and
the Conversion Value, and shares of Common Stock in respect of the remainder,
if any, of the Conversion Value.
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If the Company (i) is a party to a consolidation, merger,
statutory share exchange or combination, (ii) reclassifies the Common Stock,
or (iii) sells or conveys its properties and assets substantially as an
entirety to any Person, the right to convert a Debenture into shares of
Common Stock may be changed into a right to convert it into the kind or
amount of cash, securities or other property receivable upon such event, in
each case in accordance with the Indenture.
In addition, following certain transactions described in the Indenture
(subject to the requirements of Section 15.01(d) of the Indenture) that occur
prior to June 1, 2010 that constitute certain types of Fundamental Changes, a
holder who elects to convert its Debentures in connection with such
transaction will be entitled to receive Additional Common Stock upon
conversion. In certain circumstances involving the acquisition of the Company
by a public acquirer, the Company may elect, in lieu of issuing Additional
Common Stock, to provide for the conversion of the Debentures into shares of
the public acquirer as set forth in Section 15.12 of the Indenture.
No adjustment in respect of Interest on any Debenture converted
or dividends on any shares issued upon conversion of such Debenture will be
made upon any conversion except as set forth in the next sentence. If this
Debenture (or portion hereof) is surrendered for conversion during the period
from the close of business on any Regular Record Date for the payment of
Interest to the opening of business on the immediately following Interest
Payment Date, this Debenture (or portion hereof being converted) must be
accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the Interest otherwise
payable on such Interest Payment Date on the principal amount being
converted; provided that no such payment shall be required (1) if the Company
has specified a Redemption Date that is after a Regular Record Date and on or
prior to the next Interest Payment Date, (2) if the Company has specified a
Fundamental Change Repurchase Date that is after a Regular Record Date and on
or prior to the next Interest Payment Date or (3) to the extent of any
overdue Interest, if any overdue Interest exists at the time of conversion
with respect to such Debenture.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture or Debentures for conversion.
A Debenture in respect of which a holder is exercising its right
to require repurchase upon a Fundamental Change or repurchase on a Repurchase
Date may be converted only if such holder withdraws its election to exercise
such right in accordance with the terms of the Indenture.
The Company, the Guarantors, the Trustee, any Paying Agent, any
Conversion Agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or
not this Debenture shall be overdue and notwithstanding any notation of
ownership or other writing hereon made by
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anyone other than the Company or any Debenture Registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any Paying
Agent nor other Conversion Agent nor any Debenture Registrar shall be affected
by any notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or Interest on
this Debenture, or for any claim based hereon or otherwise in respect hereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company or the Guarantors in the Indenture or any supplemental indenture or
in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company, any Guarantor or of any successor Person, either directly or through
the Company or any successor Person, 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 acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
Terms used in this Debenture and defined in the Indenture are
used herein as therein defined.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this Debenture, shall be construed as though they were written out in
full according to applicable laws or regulations.
TEN COM - as tenants in common CUST - custodian
TEN ENT - as tenant by the entireties U/G/M/A - Uniform Gifts to Minors
Act
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above
list.
A-12
FORM OF
CONVERSION NOTICE
TO: SCIENTIFIC GAMES CORPORATION
WELLS FARGO BANK, NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby
irrevocably exercises the option to convert this Debenture, or the portion
thereof (which is $1,000 principal amount or a multiple thereof) below
designated, into cash or a combination of cash and shares of Common Stock of
Scientific Games Corporation, as the case may be, in accordance with the
terms of the Indenture referred to in this Debenture, and directs that the
funds in payment of the lesser of the principal amount of the Debentures
being converted and the Conversion Value, together with funds in lieu of
fractional shares, if any, any shares issuable and deliverable upon such
conversion and any Debentures representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. Capitalized terms used herein but
not defined shall have the meanings ascribed to such terms in the Indenture.
If funds, shares or any portion of this Debenture not converted are to be
issued in the name of a person other than the undersigned, the undersigned
will provide the appropriate information below and pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the
undersigned on account of Interest, if any, accompanies this Debenture.
Dated: ______________________
______________________________
______________________________
Signature(s)
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Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Debenture
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be determined
by the Debenture Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.
______________________________
Signature Guarantee
Fill in the registration of shares of Common Stock, if any, to be
issued, and Debentures, if any, to be delivered, other than to and in the
name of the registered holder:
______________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and Zip Code)
______________________________
Please print name and address
Principal amount to be converted
(if less than all):
$_____________________________
Social Security or Other Taxpayer
Identification Number:
______________________________
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FORM OF
FUNDAMENTAL CHANGE REPURCHASE ELECTION
TO: SCIENTIFIC GAMES CORPORATION
WELLS FARGO BANK, NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby
irrevocably acknowledges receipt of a notice from Scientific Games
Corporation (the "Company") as to the occurrence of a Fundamental Change with
respect to the Company and requests and instructs the Company to repurchase
the entire principal amount of this Debenture, or the portion thereof (which
is $1,000 principal amount or a multiple thereof) below designated, as of the
Fundamental Change Repurchase Date stated below in accordance with the terms
and conditions of this Debenture and the Indenture referred to in this
Debenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Fundamental
Change Repurchase Date stated below, to the registered holder hereof.
Capitalized terms used herein but not defined shall have the meanings
ascribed to such terms in the Indenture.
Dated: ______________________
______________________________
______________________________
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
Fundamental Change Repurchase Date:
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
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FORM OF
COMPANY REPURCHASE ELECTION
TO: SCIENTIFIC GAMES CORPORATION
WELLS FARGO BANK, NATIONAL ASSOCIATION
The undersigned registered owner of this Debenture hereby
irrevocably acknowledges receipt of a notice from Scientific Games
Corporation (the "Company") regarding the right of holders to elect to
require the Company to repurchase the Debentures and requests and instructs
the Company to repay the entire principal amount of this Debenture, or the
portion thereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture at
the price of 100% of such entire principal amount or portion thereof,
together with accrued Interest to, but excluding, the Company Repurchase
Date, to the registered holder hereof. Capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the Indenture. The
Debentures shall be repurchased by the Company as of the Company Repurchase
Date pursuant to the terms and conditions specified in the Indenture.
Dated: ______________________
______________________________
______________________________
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
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ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee)
the within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the undersigned
confirms that such Debenture is being transferred:
[ ] To Scientific Games Corporation or a subsidiary thereof; or
[ ] To a "qualified institutional buyer" in compliance with Rule 144A
under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and which
continues to be effective at the time of transfer;
and unless the Debenture has been transferred to Scientific Games Corporation
or a subsidiary thereof, the undersigned confirms that such Debenture is not
being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Debentures evidenced by this certificate in the name of
any person other than the registered holder thereof.
Dated: ______________________
______________________________
______________________________
Signature(s)
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Signature(s) must be guaranteed by an
"eligible guarantor institution" meeting
the requirements of the Debenture
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be determined
by the Debenture Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange
Act of 1934, as amended.
______________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Fundamental Change
Repurchase Election, the Company Repurchase Election or the Assignment must
correspond with the name as written upon the face of the Debenture in every
particular without alteration or enlargement or any change whatever.
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