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Exhibit 4.3
ATARI CORPORATION
AND
SECURITY PACIFIC NATIONAL BANK
Trustee
INDENTURE
Dated as of
April 29, 1987
$75,000,000
5-1/4% Convertible Subordinated Debentures Due 2002
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10; 11.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 12.03
(c) 12.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 12.02
(d) 7.06
314(a) 4.02; 11.02
(b) N.A.
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) N.A.
(e) 12.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 11.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 12.01
N.A. means not applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
Page
ARTICLE 1 Definitions and Incorporation by Reference
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . 4
1.03 Incorporation by Reference of Trust Indenture Act . . . . . 4
1.04 Rules of Construction . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2 The Securities
SECTION 2.01 Form and Dating . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Execution and Authentication . . . . . . . . . . . . . . . 5
2.03 Registrar, Paying Agent and Conversion Agent . . . . . . . 6
2.04 Paying Agent to Hold Money in Trust . . . . . . . . . . . . 7
2.05 Securityholder Lists . . . . . . . . . . . . . . . . . . . 7
2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . 7
2.07 Replacement Securities . . . . . . . . . . . . . . . . . . 9
2.08 Outstanding Securities . . . . . . . . . . . . . . . . . . 10
2.09 Treasury Securities . . . . . . . . . . . . . . . . . . 10
2.10 Temporary Global Security; Exchange, Conversion or
Redemption of Temporary Global Security . . . . . 11
2.11 Cancelation . . . . . . . . . . . . . . . . . . . . . . . . 13
2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . 14
2.13 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3 Redemption
SECTION 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . . . 14
3.02 Selection of Securities to Be Redeemed . . . . . . . . . . 14
3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . 15
3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . 16
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Page
3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . 16
3.06 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . 16
ARTICLE 4 Covenants
SECTION 4.01 Payment of Securities . . . . . . . . . . . . . . . . . . . . 16
4.02 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.03 Certificate as to Default . . . . . . . . . . . . . . . . . . 17
ARTICLE 5 Successors
SECTION 5.01 When Corporation May Merge, etc. . . . . . . . . . . . . . . 17
ARTICLE 6 Defaults and Remedies
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . 18
6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 20
6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 21
6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . 21
6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . 21
6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . 21
6.07 Rights of Holders to Receive Payment . . . . . . . . . . . . 22
6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . 22
6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . 22
6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 7 Trustee
SECTION 7.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . 23
7.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . 24
7.03 Individual Rights of Trustee, etc. . . . . . . . . . . . . . . 25
7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . 25
7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . 25
7.06 Reports by Trustee to Holders . . . . . . . . . . . . . . . . 25
7.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . 26
7.08 Replacement of Trustee . . . . . . . . . . . . . . . . . . . 26
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Page
7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . 28
7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . 28
7.11 Preferential Collection of Claims Against Corporations . . . 28
ARTICLE 8 Repayment to Corporation
SECTION 8.01 Repayment to Corporation . . . . . . . . . . . . . . . . . . 28
ARTICLE 9 Amendments, Supplements and Waivers
SECTION 9.01 Without Consent of Holders . . . . . . . . . . . . . . . . . 28
9.02 With Consent of Holders . . . . . . . . . . . . . . . . . . . 29
9.03 Compliance with Trust Indenture Act . . . . . . . . . . . . . 30
9.04 Revocation and Effect of Consents . . . . . . . . . . . . . . 30
9.05 Notation on or Exchange of Securities . . . . . . . . . . . . 30
9.06 Trustee Protected . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 10 Conversion
SECTION 10.01 Conversion Privilege . . . . . . . . . . . . . . . . . . . . 30
10.02 Conversion Procedure . . . . . . . . . . . . . . . . . . . . 31
10.03 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . 32
10.04 Taxes on Conversion . . . . . . . . . . . . . . . . . . . . . 32
10.05 Corporation to Provide Stock . . . . . . . . . . . . . . . . 32
10.06 Adjustment for Change in Capital Stock . . . . . . . . . . . 33
10.07 Adjustment for Rights Issue . . . . . . . . . . . . . . . . . 33
10.08 Adjustment for Other Distributions . . . . . . . . . . . . . 34
10.09 Current Market Price . . . . . . . . . . . . . . . . . . . . 35
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Page
10.10 When Adjustment May Be Deferred . . . . . . . . . . . . . . . 35
10.11 When No Adjustment Required . . . . . . . . . . . . . . . . . 35
10.12 Notice of Adjustment . . . . . . . . . . . . . . . . . . . . 36
10.13 Voluntary Reduction . . . . . . . . . . . . . . . . . . . . . 36
10.14 Notice of Certain Transactions . . . . . . . . . . . . . . . 36
10.15 Reorganization of Corporation . . . . . . . . . . . . . . . . 37
10.16 Corporation Determination Final . . . . . . . . . . . . . . . 37
10.17 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 11 Subordination
SECTION 11.01 Agreement to Subordinate . . . . . . . . . . . . . . . . . . 38
11.02 Certain Definitions . . . . . . . . . . . . . . . . . . . . . 38
11.03 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . 39
11.04 Default on Senior Debt . . . . . . . . . . . . . . . . . . . 39
11.05 Acceleration of Securities . . . . . . . . . . . . . . . . . 40
11.06 When Distribution Must Be Paid Over . . . . . . . . . . . . . 40
11.07 Notice by Corporation . . . . . . . . . . . . . . . . . . . . 40
11.08 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.09 Relative Rights . . . . . . . . . . . . . . . . . . . . . . . 40
11.10 Subordination May Not Be Impaired by Corporation . . . . . . 41
11.11 Distribution or Notice to Representative . . . . . . . . . . 41
11.12 Rights of Trustee and Paying Agent . . . . . . . . . . . . . 41
ARTICLE 12 Miscellaneous
SECTION 12.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . 42
12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
12.03 Communications by Holders with Other Holders . . . . . . . . 43
12.04 Certificate and Opinion as to Conditions Precedent . . . . . 43
12.05 Statements Required in Certificate or Opinion . . . . . . . . 44
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Page
12.06 Rules by Trustee, Paying Agent, Registrar . . . . . . . . . . 44
12.07 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 44
12.08 No Recourse Against Others . . . . . . . . . . . . . . . . . 44
12.09 Duplicate Originals . . . . . . . . . . . . . . . . . . . . . 45
12.10 Variable Provisions . . . . . . . . . . . . . . . . . . . . . 45
12.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 46
Signatures
Exhibit A -- Form of Registered Security
Exhibit B -- Form of Bearer Security
Exhibit C -- Form of Coupon
Exhibit D -- Form of Global Debenture
Exhibit E -- Form of Certificate of Non-U.S. Ownership
Exhibit F -- Form of Investment Letter
Exhibit G -- Form of Certificate of U.S. Institutional
Investor
Exhibit H-1 -- Form of Clearance System Certificate
Exhibit H-2 -- Form of Clearance System Certificate
Exhibit H-3 -- Form of Clearance System Certificate
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INDENTURE dated as of April 29, 1987, between ATARI
CORPORATION, a Nevada corporation (the "Corporation"), and SECURITY PACIFIC
NATIONAL BANK, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Corporation's
5-1/4% Convertible Subordinated Debentures Due 2002 (the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Corporation.
"Agent" means any Registrar, Paying Agent, Conversion Agent
or co-registrar.
"Authorized Newspaper" means a newspaper of general
circulation in the place of publication, printed in the official language of
the country of publication and customarily published on each Business Day,
whether or not published on Legal Holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required by this
Indenture, they may be made (unless otherwise expressly provided) on the same
or different days of the week and in the same or different Authorized
Newspapers.
"Bearer Security" means any Security except a Registered
Security.
"Board of Directors" means the Board of Directors of the
Corporation or the Executive Committee of the Board.
"CEDEL" means Centrale de Livraisons de Valeurs Mobilieres,
S.A.
"Clearance Systems" means Euro-Clear and CEDEL.
"Common Depository" means Morgan Guaranty Trust Company of New
York, London Office, as common depositary for Euro-Clear and CEDEL.
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"Corporation" means the party named as such in this Indenture
until a successor replaces it and after that means the successor.
"Coupon" means a Coupon in the form of Exhibit C.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"definitive Securities" means Registered Securities in the
form of Exhibit A and Bearer Securities in the form of Exhibit B.
"Dollar", "dollar", or "$" means a dollar in the currency of
the United States as at the time shall be legal tender for the payment of
public and private debts.
"Euro-Clear" means the Euro-Clear System.
"Exchange Date" means the date which is the later of 90 days
after the distribution of the Securities has been completed, as determined by
PaineWebber International Capital Inc, and the effectiveness of registration of
the Debentures for resale under the United States Securities Act of 1933 (the
"Securities Act"); provided, however, that if the Company shall furnish the
Trustee with an Opinion of Counsel that registration of the Debentures for
resale under the Securities Act is not necessary for distribution of the
Securities to comply with the requirements of the Securities Act, the Exchange
Date shall be the later of the date 90 days after the distribution of the
Securities has been completed, as determined by PaineWebber International
Capital Inc., and the date of receipt of such Opinion of Counsel by the
Trustee.
"Global Security" means a temporary Global Security in bearer
form without interest coupons, portions of which may be converted, as provided
in Section 2.10, for Securities of such series in definitive form.
"Holder" or "Securityholder" means a person in whose name a
Registered Security is registered on the Registrar's books and the bearer of a
Bearer Security.
"Indenture" means this Indenture as amended from time to time.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the President, the
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Treasurer or a Vice President of the Corporation. See Sections 12.04 and
12.05.
"Opinion of Counsel" means a written opinion from legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Corporation or the Trustee. See Sections 12.04 and 12.05.
"principal" of a debt security means the principal of the
security plus the premium, if any, on the security.
"Registered Holder" means the person in whose name a Registered
Security is registered on the Registrar's books.
"Registered Security"' means any Security registered on the
Registrar's books as to the principal and interest, if any.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under
this Indenture, including both Bearer Securities and Registered Securities.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sec.
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such above until a successor
replaces it and after that means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"U.S. Institutional Investors" means certain United States
institutional investors to whom sales can be made exempt from the registration
requirements of the United States Securities Act of 1933.
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SECTION 1.02. Other Definitions.
Defined in
Term Section
"Bankruptcy Law" 6.01
"Common Stock" 10.01
"Conversion Agent" 2.03
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 12.07
"Officer" 12.10
"Paying Agent" 2.03
"Quoted Price" 12.10
"Registrar" 2.03
"Representative" 11.02
"Senior Debt" 11.02
"U.S. Government Obligations" 8.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Corporation.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings assigned to them.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires,
(1) a term has the meaning assigned to it,
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(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with generally
accepted accounting principles,
(3) "or" is not exclusive,
(4) words in the singular include the plural, and
in the plural include the singular, and
(5) provisions apply to successive events and
transactions.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. The Registered Securities will
be substantially in the form of Exhibit A and the Bearer Securities and the
coupons will be substantially in the form of Exhibit B and Exhibit C,
respectively, all of which are part of this Indenture. The Securities and the
coupons may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Registered Security will be dated the date of its
authentication. Each Bearer Security and the Global Security will be dated as
of the date of this Indenture.
SECTION 2.02. Execution and Authentication. An Officer will
sign the Securities and the coupons for the Corporation by manual or facsimile
signature. The Corporation's seal will be impressed, affixed, imprinted or
reproduced on the Securities and the coupons.
If an Officer whose signature is on a Security or a coupon no
longer holds that office at the time the Trustee authenticates the Security or
the coupon, the Security or the coupon will nevertheless be valid.
A Security will not be valid until authenticated by the manual
signature of the Trustee. The signature will be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee will authenticate Securities for original issue up
to the total principal amount of U.S. $75,000,000 on a written order of the
Corporation signed by two Officers. The total principal amount of Securities
outstanding at any time may not exceed that
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amount except as provided in Section 2.07 (Replacement Securities).
The Trustee may appoint an authenticating agent acceptable to
the Corporation to authenticate Securities. An authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
Agent. An authenticating agent has the same rights as an Agent to deal with
the Corporation or an Affiliate.
SECTION 2.03. Registrar, Paying Agent and Conversion Agent. The
Corporation shall maintain an office or agency where Registered Securities may
be presented for registration of transfer or for exchange ("Registrar" and
"Transfer Agent"), an office or agency where Securities and coupons may be
presented for payment ("Paying Agent") and an office where Securities may be
presented for conversion ("Conversion Agent"). The Registrar shall keep a
register of the Registered Securities and of their transfer and exchange. The
Corporation may appoint one or more co-registrars, one or more additional
paying agents and one or more additional conversion agents. The term "Paying
Agent" includes any additional paying agent, and the term "Conversion Agent"
includes any additional conversion agent. Initially, the Trustee with its
corporate trust office at 127 John Street, New York, New York 10038, will act
as Registrar and Transfer, Paying and Conversion Agent; Credit Suisse (France),
92, Avenue des Champs-Elysees, F-75008, Paris, France, and Credit Suisse
(Luxembourg) SA, 23, Avenue Monterey, B.P. 40, Luxembourg, Grand Duchy of
Luxembourg, will act as Transfer, Paying and Conversion Agents; Schweizerische
Kreditanstalt (Deutschland) AG, P.O. Box 100529, D-6000 Frankfurt a/M 1,
Federal Republic of Germany, and Credit Suisse, 24, Bishopsgate, London EC2N
4BQ, Great Britain, will act as Paying and Conversion Agents; and Credit
Suisse, P.O. Box 590, CH-8021, Zurich, Switzerland will act as Paying Agent.
The Corporation reserves the right to vary or terminate the appointment of the
Registrar or any Transfer, Paying or Conversion Agent, or to appoint additional
or other Registrars or Transfer, Paying or Conversion Agents, or to approve any
change in the office through which the Registrar or any such agent acts,
provided that there will at all times be a Transfer Agent or Registrar, and,
with respect to the Registered Securities, a Paying Agent and Conversion Agent
in New York, New York and, with respect to Bearer Securities and coupons, a
Paying Agent and Conversion Agent in a European city which, so long as the
Securities are listed on the Luxembourg Stock Exchange
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and so long as the Luxembourg Stock Exchange so requires, shall be Luxembourg.
If the Corporation fails to maintain a Registrar, Paying Agent or Conversion
Agent within the United States, the Trustee will act as such. Except as
otherwise provided in paragraph 2 of the Bearer Securities, Bearer Securities
may only be paid or converted at offices outside the United States.
SECTION 2.04. Paying Agent to Hold Money in Trust. The
Corporation will require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and the coupons and will
notify the Trustee of any default by the Corporation in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. If the Corporation acts as
Paying Agent, it will segregate and hold as a separate trust fund all money
held by it as Paying Agent. The Corporation at any time may require a Paying
Agent to pay all money held by it to the Trustee. On payment over to the
Trustee, the Paying Agent will have no further liability for the money.
SECTION 2.05. Securityholder Lists. The Trustee will preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Registered Securityholders. If the Trustee is
not the Registrar, the Corporation will furnish to the Trustee within two
business days after each record date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Registered Securityholders.
SECTION 2.06. Transfer and Exchange. Where Registered Securities
are presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Registered
Securities of other denominations, the Registrar will register the transfer or
make the exchange as requested if its requirements for such transactions are
met. To permit registrations of transfers and exchanges, the Trustee will
authenticate Registered Securities at the Registrar's request.
Subject to the provisions of this Section 2.06 and such
reasonable regulations as the Trustee, the Registrar
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and the Corporation may prescribe, a Bearer Security or Bearer Securities may,
at the option of the Holder, be exchanged at any time for a Registered Security
or Registered Securities. The Corporation initially appoints the Transfer
Agents (but not the Registrar), with their offices in Paris, France, and
Luxembourg, Grand Duchy of Luxembourg as its agents to effect such exchanges
and may appoint other Transfer Agents pursuant to Section 2.03. Any Bearer
Security surrendered for exchange shall be accompanied by all unmatured coupons
and all matured coupons in default and the Holder of the Registered Security or
Registered Securities issued in exchange for any Bearer Security will be
entitled to any such defaulted interest, provided that any Bearer Security so
surrendered between the close of business on a Record Date for any payment of
interest and the date on which such interest is to be paid need not have
attached the coupon with respect to which such interest payment is to be made.
If the Holder is unable to produce any such coupon, the surrender of any such
coupon or coupons may be waived by the Corporation and the Trustee, if there be
furnished to them, in the case of a matured coupon, a cash payment to the
Corporation equal to the amount of interest on presentation, and in the case of
an unmatured coupon, such security or indemnity as the Corporation and the
Trustee may require to save each of them and any agent of each of them and any
Paying Agent harmless. If thereafter, the Holder of such Security shall
surrender to any Paying Agent outside the United States any such missing
coupon, the amount of interest paid on the missing coupon shall be repaid to
the Holder.
The exchange of Bearer Securities for Registered Securities
shall be subject to the provisions of United States income tax laws and
regulations in effect at the time of such exchange, and the Registrar shall not
make such exchange if it has received written notice from the Corporation that
as a result of such exchange the Corporation would suffer adverse consequences
under United States tax laws or be required to pay any additional amounts with
respect to the Securities.
Registered Securities may not be exchanged for Bearer
Securities.
In the event of a redemption in part, the Company will not be
required (i) to register the transfer of or exchange Registered Securities or
to exchange Bearer Securities for Registered Securities for a period of 15 days
immediately preceding the date notice is given identifying
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the serial numbers of Securities called for such redemption; (ii) to register
the transfer of or exchange any Registered Security, or portion thereof, called
for redemption; or (iii) to exchange any Bearer Security called for redemption,
provided, however, that a Bearer Security called for redemption may be
exchanged for a Registered Security which is simultaneously surrendered to the
Registrar or Transfer Agent making such exchange with written instruction for
payment consistent with the provisions of Paragraph 2 of the Registered
Securities.
Subject to the foregoing, whenever one or more Bearer Securities
or Registered Securities shall be surrendered at the office of the Registrar or
Transfer Agent for exchange for one or more Registered Securities, together
with an executed instrument of assignment and transfer and a written request
for the exchange, the Trustee shall authenticate and deliver or cause to be
delivered a Registered Security or Registered Securities in a like aggregate
principal amount and in such authorized denomination or denominations as may be
requested, at such office of the Registrar or Transfer Agent or by mail (at the
request, risk and expense of the Holder) to the address reflected in the books
maintained by the Registrar for such purpose. No Bearer Security will be
mailed to an address located in the United States. The Corporation may charge
a reasonable fee for any registration of transfer or exchange but not for any
exchange pursuant to Section 2.10 (Temporary Global Security; Exchange,
Conversion or Redemption of Temporary Global Security), 3.06 (Securities
Redeemed in Part), 9.05 (Notation on or Exchange of Securities) or 10.02
(Conversion Procedure).
SECTION 2.07. Replacement Securities. If any Security is
mutilated, defaced, destroyed, lost or stolen, and in the absence of notice to
the Trustee that such Security has been acquired by a bona fide purchaser, the
Trustee, if the Trustee's requirements are met, is authorized to authenticate
and deliver a new Security of like principal amount with, in the case of a
Bearer Security, coupons corresponding to the coupons, if any, appertaining to
the mutilated, defaced, destroyed, lost or stolen Bearer Security. If a coupon
is mutilated, defaced, destroyed, lost or stolen, the Trustee is authorized to
authenticate and deliver a new Bearer Security in substitution for, and upon
surrender of, the Bearer Security with respect to which the coupons have become
so mutilated, defaced, destroyed, lost or stolen (with coupons corresponding to
the coupons on such Bearer Security including those which were mutilated,
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defaced, destroyed, lost or stolen). In each such case the applicant for a
substitute Security or coupon shall furnish such evidence of destruction, loss
or theft and such security and indemnity as the Corporation and the Trustee,
the Paying Agent, the Transfer Agent or the Registrar may require to save each
of them and any agent of each of them and any Paying Agent harmless, including,
if required by the Trustee or the Corporation, an indemnity bond sufficient in
the judgment of both to protect the Corporation, the Trustee, any Paying or
Transfer Agent or any authenticating agent from any loss that any of them may
suffer if a Security is replaced. Mutilated Securities and coupons must be
surrendered before new ones will be issued. In case any Security or any coupon
shall become mutilated, defaced, destroyed, lost or stolen, the Corporation may
pay or authorize payment of the same (in the case of a Bearer Security or
coupon, only outside the United States, except as otherwise provided in
paragraph 2 of the Bearer Securities) without issuing a substitute Security.
The Corporation may charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. The Securities
outstanding at any time are all Securities authenticated by the Trustee except
for those canceled by it, those delivered to it for cancelation and those
described in this Section as not outstanding.
If a Security is replaced pursuant to the foregoing Section, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01 (Payment of
Securities), they cease to be outstanding and interest on them ceases to
accrue.
A Security does not cease to be outstanding because the
Corporation or an Affiliate holds the Security.
SECTION 2.09. Treasury Securities. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or an Affiliate
shall be disregarded, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only
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Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. Temporary Global Security; Exchange, Conversion or
Redemption of Temporary Global Security. The Securities shall initially be
represented by the Global Security in substantially the form of Exhibit D,
without coupons, which the Trustee shall, upon written order of the
Corporation, authenticate and deposit with the Common Depositary outside the
United States for the respective accounts of Euro-Clear, and CEDEL for credit,
directly or through Euro-Clear or CEDEL, as the case may be, to the respective
accounts of the beneficial owners of the Securities.
Not before the Exchange Date, the Global Security shall be
surrendered outside the United States by the Common Depositary to the Trustee
and the Global Security shall become exchangeable outside the United States,
subject to the conditions below, by the beneficial owners of interests in the
Global Security for definitive Securities in substantially the form of Exhibits
A and B in an amount equal to the aggregate principal amount of the Global
Security. PaineWebber International Capital Inc. shall provide written notice
of such completion of distribution and effectiveness of registration to the
Trustee, with copies to the Corporation, the Paying Agent, the Registrar, the
Common Depositary and the Clearance Systems. On a date not later than three
business days prior to the Exchange Date, the Corporation shall deliver the
definitive Securities to the Trustee for issuance upon exchange of the Global
Security. The Global Security shall, however, be exchangeable for definitive
Securities, upon reasonable notice, as soon as practicable after the date of
issuance of the Securities, but only for Registered Securities for the account
of beneficial owners who are United States Institutional Investors. Such
exchange shall be made free of charge by the Corporation to the holders and
beneficial owners of the Securities, except that any person receiving
definitive Securities must bear the cost of insurance, postage, transportation
and the like in the event that such person does not receive such definitive
Securities at the office of one of the Clearance Systems or the Registrar.
A beneficial owner of Securities desiring to exchange its
beneficial interest in the Global Security for Bearer Securities shall instruct
one of the Clearance Systems to request such exchange on its behalf, but shall
be entitled to receive Bearer Securities only after it shall
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have delivered or caused to be delivered to such Clearance System a certificate
of non-U.S. ownership substantially in the form of Exhibit E. A beneficial
owner of Securities desiring to exchange its beneficial interest in the Global
Security for Registered Securities shall instruct one of the Clearance Systems
to request such exchange on its behalf, but shall be entitled to receive
Registered Securities only (i) if it shall have delivered or caused to be
delivered to one of the Clearance Systems a certificate of non-U.S. ownership
as described above or (ii) if such beneficial owner is a U.S. Institutional
Investor and shall have delivered to the Representative a letter (addressed to
PaineWebber International Capital Inc. and the Corporation) substantially in
the form of Exhibit F and there shall have been delivered to one of the
Clearance Systems a certificate stating that the beneficial owner is a U.S.
Institutional Investor substantially in the form of Exhibit G.
Three business days prior to the Exchange Date (or the exchange
of Securities by a U.S. Institutional Investor), the Corporation shall execute
and deliver to the Trustee definitive Securities for authentication and
delivery by it. If, however, Securities shall have been called for redemption
prior to the Exchange Date (or the exchange of Securities by a U.S.
Institutional Investor), then the Corporation shall not be required to deliver
definitive Securities representing the Securities so called for redemption. On
or after the Exchange Date (or the exchange of Securities by a U.S.
Institutional Investor), unless the Securities shall have been called for
redemption on or before such date, the Trustee shall, upon the request of a
Clearance System, acting on behalf of beneficial owners of such Securities,
authenticate and deliver to such Clearance System, for the accounts of such
beneficial owners, in exchange for the portion of the Global Security
beneficially owned by such owners, definitive Securities in an aggregate
principal amount equal to the aggregate principal amount of the Securities
beneficially owned by such owners. Delivery of the Bearer Securities shall be
made at the office of the Transfer Agent in London, Great Britain, and
Luxembourg, Grand Duchy of Luxembourg, and delivery of the Registered
Securities shall be made at the corporate trust office of the Registrar in New
York, New York. The Trustee shall so deliver the definitive Securities only if
such request is accompanied by the delivery by such Clearance System, acting on
behalf of such beneficial owners, to the Trustee and the Transfer Agents at
their offices in London, Great Britain, and Luxembourg, Grand Duchy of
Luxembourg, of a certificate, dated no earlier than the Exchange Date (or the
date of
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issuance of the Securities with respect to Registered Securities for the
account of U.S. Institutional Investors), substantially in the form of Exhibit
H-1 or H-2, a copy of which shall be delivered by the Transfer Agent to the
Corporation.
The delivery to the Transfer Agent by a Clearance System of any
certificate referred to above may be relied upon by the Corporation, the
Trustee and the Registrar as conclusive evidence that the corresponding
certificates of non-U.S. ownership or certificates of U.S. Institutional
Investors have been delivered to such Clearance System.
Upon any exchange of a part of the Global Security for
definitive Securities, the Global Security shall be endorsed by the Trustee to
reflect the reduction of its principal amount. Until exchanged in full for
definitive Securities, the Global Security shall in all respects be entitled to
the same benefits under this Indenture as authenticated and delivered
definitive Securities, provided that neither the holder nor the beneficial
owners of any part of the Global Security shall (i) be entitled to receive
payment of the principal or interest except in the case of a redemption prior
to the Exchange Date (or the exchange by a U.S. Institutional Investor) and
except that if any interest payment date occurs before the Exchange Date, the
interest payment due on such date may be made upon certification of non-U.S.
ownership substantially in the form of Exhibits E and H-3 (with appropriate
modification) with respect to the relevant Securities, or (ii) be entitled to
convert such interest in the Global Security into Common Stock, as defined in
Section 10.01, until such interest in the Global Security is exchanged for
definitive Securities.
SECTION 2.11. Cancelation. The Corporation at any time may
deliver Securities and coupons to the Trustee for cancelation. The Registrar
and Transfer, Paying and Conversion Agents will forward to the Trustee any
Securities and coupons surrendered to them for registration of transfer,
exchange or payment. The Trustee will cancel all Securities and coupons
surrendered for registration of transfer, exchange, payment, conversion or
cancelation and will dispose of canceled Securities and coupons as the
Corporation directs. The Corporation may not issue new Securities and coupons
to replace Securities and coupons it has paid or delivered to the Trustee for
cancelation or that any Securityholder has converted pursuant to this
Indenture.
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SECTION 2.12. Defaulted Interest. If the Corporation defaults
in a payment of interest on any Securities, it will pay the defaulted interest
in any lawful manner. It may pay the defaulted interest, plus any interest
payable on the defaulted interest, to the persons who are Registered
Securityholders on a subsequent special record date. The Corporation will fix
the special record date and payment date. At least 15 days before the special
record date, the Corporation will mail to Registered Securityholders a notice
that states the special record date, the payment date, and the amount of
defaulted interest to be paid.
SECTION 2.13. Title. Title to the temporary Global Security,
the Bearer Securities and the coupons will pass by delivery. The Corporation,
the Trustee, the Registrar, any transfer agent, any paying agent and any
conversion agent may treat the holder of any Bearer Security and the holder of
any coupon and the registered owner of any Registered Security as the absolute
owner thereof (whether or not such Security or coupon shall be overdue and
notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein) for the purpose of making
payment and for all other purposes.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Corporation wants to
redeem Securities pursuant to paragraph 5 (Optional Redemption) of the
Securities, it will notify the Trustee of the redemption date and the principal
amount of Securities to be redeemed.
The Corporation will give the notice provided for in this
Section at least 65 days before the redemption date.
SECTION 3.02. Selection of Securities to Be Redeemed. If less
than all the Securities are to be redeemed, the Trustee will select the
Securities to be redeemed pro rata or by lot. The Trustee will make the
selection from outstanding Securities not previously called for redemption.
The Trustee may select for redemption portions of the principal of Securities
that have a denomination larger than $5,000. Securities and portions of them
it selects will be in amounts of $5,000 or an integral multiple of $5,000.
Provisions of this Indenture that apply to Securities called
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for redemption also apply to portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption. In the case of a partial
redemption, notice will be given twice, the first such notice to be given not
more than 75 nor less than 60 days prior to the date fixed for redemption and
the second such notice to be given at least 30 days thereafter but not less
than 30 days prior to the date fixed for redemption. In the case of a full
redemption, notice shall be given at least 30, but not more than 60 days prior
to the date fixed for redemption.
The notice will identify the Securities to be redeemed and will state
(1) the redemption date,
(2) the redemption price,
(3) the conversion price,
(4) the name and address of the Paying Agent and the
Conversion Agent (which, in the case of Bearer Securities, shall
be outside the United States, except as provided in paragraph 2
of Bearer Securities),
(5) that payment for Bearer Securities will only be made
upon presentation and surrender of the Bearer Security, together
with any coupons appertaining thereto maturing subsequent to the
redemption date,
(6) that Securities called for redemption may be
converted at any time before the close of business on the
redemption date,
(7) that Holders who want to convert the Securities must
satisfy the requirements in paragraph 8 of the Securities,
(8) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price,
(9) that interest on Securities called for redemption
ceases to accrue on and after the redemption date, and
(10) if less than the full principal amount of Securities
outstanding is to be redeemed, the portion
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of Securities to be redeemed and the aggregate principal amount
of Securities to remain outstanding after the redemption and
such other information as may be required pursuant to paragraph
5 of the Securities.
At the Corporation's request, the Trustee will give the notice
of redemption in the Corporation's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is given in accordance with Section 12.02, Securities called for
redemption become due and payable on the redemption date and at the redemption
price stated in the notice.
SECTION 3.05. Deposit of Redemption Price. Before the
redemption date, the Corporation will deposit with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date. The Paying Agent will return to the
Corporation any money not required for that purpose because of conversion of
Securities.
SECTION 3.06. Securities Redeemed in Part. On surrender of a
Security that is redeemed in part, the Trustee will authenticate for the Holder
a new Security equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Corporation will pay
the principal of and interest on the Securities and the coupons on the dates
and in the manner provided in the Securities and the coupons. Principal and
interest will be considered paid on the date due if the Paying Agent holds on
that date money sufficient to pay all principal and interest then due.
The Corporation will pay interest on overdue principal at the
rate borne by the Securities, and it will pay interest on overdue installments
of interest and coupons at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. The Corporation will file with the
Trustee within 15 days after it files them
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with the SEC copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) that the Corporation is required to
file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. The Corporation also will comply with the other provisions of TIA
Sec. 314(a).
SECTION 4.03. Certificate as to Defaults. The Corporation will
deliver to the Trustee within 120 days after the end of each fiscal year of the
Corporation an officers' Certificate stating whether or not the signers know of
any Default that occurred during the fiscal year. If they do know of such a
default, the certificate will describe the Default and its status. The
certificate need not comply with Section 12.05. See Section 12.10.
ARTICLE 5
Successors
SECTION 5.01. When Corporation May Merge, etc. The Corporation
will not consolidate or merge into, or transfer or lease all or substantially
all of its assets to, any other entity unless
(1) the other entity assumes by supplemental
indenture all the obligations of the Corporation under the
Securities, the coupons and this Indenture, except that it
need not assume the obligations of the Corporation as to
conversion of Securities if pursuant to Section 10.15
(Reorganization of Corporation) the Corporation or another
person enters into a supplemental indenture obligating it to
deliver securities, cash or other assets on conversion of
Securities,
(2) immediately after the transaction no Default
exists, and
(3) the Corporation delivers to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger or transfer or lease and such
supplemental indenture comply with this Indenture.
(4) immediately after such consolidation, merger,
transfer or lease, the Securities will not be subject to
United States Federal estate tax as a result thereof
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if held by a person who at the time of death is not a citizen
or resident of the United States of America unless the
successor Corporation shall have agreed, by supplemental
agreement, to indemnify the persons liable therefor for the
amount of United States Federal estate tax attributable to and
payable in respect of any Securities includable in the gross
estate of the person who at the time of death is not a citizen
or resident of the United States of America. The amount of
any such estate tax attributable to any Securities for
purposes of this paragraph (4) shall be calculated in
accordance with the provisions of the Internal Revenue Code of
1986 and any successor thereto.
The surviving, transferee or lessee entity will be the
successor Corporation, and the obligations of the predecessor Corporation in
the case of a transfer or lease will be terminated.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if
(1) the Corporation defaults in the payment of
interest on any Security when the interest becomes due and
payable and the default continues for 30 days,
(2) the Corporation defaults in the payment of
the principal of any Security when the principal becomes due
and payable at maturity, upon redemption or otherwise,
(3) the Corporation fails to comply with any of
its other agreements in the Securities or this Indenture and
the Default continues for the period and after the notice
specified below in this Section,
(4) the Corporation pursuant to or within the
meaning of any Bankruptcy Law,
(A) commences a voluntary case,
(B) consents to the entry of an order
for relief against it in an involuntary case,
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(C) consents to the appointment of a
Custodian of it or for any substantial part of its
property, or
(D) makes a general assignment for the
benefit of its creditors or
(5) a court of competent jurisdiction enters
an order or decree under any Bankruptcy Law that
(A) is for relief against the
Corporation in an involuntary case,
(B) appoints a Custodian of the
Corporation or for any substantial part of its
property or
(C) orders the winding up or liquidation
of the Corporation,
and the order or decree remains unstayed and in effect for 60
days, or
(6) an event of default as defined in any
mortgage, indenture or instrument, under which there may be
issued, or by which there may be secured or evidenced, any
indebtedness for borrowed money of the Corporation or any
subsidiary (other than non-recourse indebtedness), whether
such indebtedness now exists or shall be created after the
date of this Indenture, shall happen and shall result in such
indebtedness in excess of an aggregate of $5,000,000 becoming
or being declared due and payable prior to the date on which
it would otherwise become due and payable, and within 30 days
after there has been given, by registered or certified mail to
the Corporation by the Trustee or to the Corporation and the
Trustee by the Holders of at least 25% in principal amount of
the then outstanding Securities, a written notice specifying
such event of default and requiring the Corporation to cause
such acceleration to be rescinded or annulled, such
acceleration shall not have been rescinded or annulled; if,
however, such event of default and such acceleration under
such mortgage, indenture or instrument shall be remedied or
cured whether by payment or otherwise by the Corporation, or
waived by the holders of such indebtedness, prior to
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acceleration of the maturity of the Securities, then the Event
of Default under this Indenture by reason of such acceleration
shall be deemed likewise to have been remedied, cured or
waived without further action upon the part of either the
Trustee or any of the Holders of the Securities; the Trustee
shall not be charged with knowledge of any such event of
default unless either (i) the Trustee shall have actual
knowledge of such default or (ii) written notice of such event
of default shall have been given to the Trustee by the
Corporation, by the holder or an agent of the holder of any
such indebtedness, by the Trustee then acting under any
indenture or other instrument under which such default shall
have occurred, or by the Holders of not less than 25% in
aggregate principal amount of outstanding Securities.
The term "Bankruptcy Law" means Title 11, United States Code
or any similar Federal or State law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Corporation of the default and the Corporation does not
cure the default within 60 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default."
SECTION 6.02. Acceleration. If an Event of Default occurs and
is continuing, the Trustee by notice to the Corporation or the Holders of at
least 25% in principal amount of the Securities by notice to the Corporation
and the Trustee may declare the principal of and accrued interest on all the
Securities to be due and payable. Upon a declaration the principal and
interest will be due and payable immediately. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may rescind an
acceleration and its consequences if all existing
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Events of Default have been cured or waived (except nonpayment of principal or
interest that has become due solely because of the acceleration) and if the
rescission would not conflict with any judgment or decree.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing on an Event of Default will not impair
the right or remedy or constitute a waiver of or acquiescence in the Event of
Default. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except a default in the payment
of the principal or interest on any Securities or a Default under Article 10.
SECTION 6.05. Control by Majority. The Holders of a majority
in principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability.
SECTION 6.06. Limitation on Suits. A Securityholder may
pursue a remedy with respect to this Indenture or the Securities only if
(1) the Holder gives to the Trustee notice of
a continuing Event of Default,
(2) the Holders of at least 25% in principal
amount of the Securities make a request to the Trustee to
pursue the remedy,
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(3) such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense,
(4) the Trustee does not comply with the
request within 60 days after receipt of the request and the
offer of indemnity and
(5) no direction inconsistent with such
written request has been given to the Trustee during such
60-day period by the Holders of a majority in principal amount
of the outstanding Securities.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over the
other Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of principal of and interest on the Security
and the coupons on or after the respective due dates expressed in the Security
and the coupons, or to bring suit for the enforcement of any such payment on or
after such respective dates, will not be impaired or affected without the
consent of the Holder.
Notwithstanding any other provision of this Indenture, the
right of any holder of a Security to bring suit for the enforcement of the
right to convert the Security will not be impaired or affected without the
consent of the Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(l) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Corporation for the whole amount of principal and interest
remaining unpaid.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Corporation, its creditors
or its property.
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SECTION 6.10. Priorities. If the Trustee collects any money
pursuant to this Article, it will pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07
(Compensation and Indemnity).
Second: to holders of Senior Debt to the extent required by
Article 11.
Third: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on such Securities for
principal and interest, respectively.
Fourth: to the Corporation.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 (Rights
of Holders to Receive Payment) or a suit by Holders of more than 10% in
principal amount of the Securities.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee will exercise its 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.
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(b) Except during the continuance of an Event of
Default,
(1) the Trustee need perform only those duties that
are specifically set forth in this Indenture and no others,
and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, on certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture.
However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from
liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(1) this paragraph does not limit the effect of
paragraph (b) of this Section,
(2) the Trustee will not be liable for any error
of judgment made in good faith by a Trust Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts, and
(3) the Trustee will not be liable with respect
to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.05 (Control by Majority).
(d) Every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b)
and (c) of this Section.
(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest
on any money received by it except as the Trustee may
agree with the Corporation. Money held in trust by the
Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
any document reasonably believed by it
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to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee
will not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or opinion.
(c) The Trustee may act through non-employee agents and
will not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee will not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or
within its rights or powers.
SECTION 7.03. Individual Rights of Trustee, etc. The Trustee
in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Corporation or an Affiliate with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10
(Eligibility; Disqualification) and 7.11 (Preferential Collection of Claims
Against Corporations).
SECTION 7.04. Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it will not be accountable for the Corporation's use of the
proceeds from the Securities, and it will not be responsible for any statement
in the Securities other than its certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee will give
Securityholders notice in accordance with Section 12.02 of the Default within
90 days after it occurs. Except in the case of a Default in payment on any
Security, the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of such Securityholders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days
after the reporting date stated in Section 12.10, the Trustee will give to each
Securityholder in accordance with Section 12.02 a brief report dated as of
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such reporting date that complies with TIA Sec. 313(a). The Trustee also will
comply with TIA Sec. 313(b)(2).
A copy of each report at the time of its mailing to Registered
Securityholders will be filed with the SEC and each stock exchange on which the
Securities are listed. The Corporation will notify the Trustee when the
Securities are listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity. The Corporation
will pay to the Trustee from time to time reasonable fees for its services.
The Corporation will reimburse the Trustee on request for all reasonable
out-of-pocket expenses incurred by it. Such expenses will include the
reasonable fees and expenses of the Trustee's agents and counsel.
The Corporation will indemnify the Trustee against any loss or
liability incurred by it in connection with the administration of this
Indenture and its duties under it. The Trustee will notify the Corporation
promptly of any claim for which it may seek indemnity. The Corporation will
defend the claim and the Trustee will cooperate in the defense. The Trustee
may have separate counsel and the Corporation will pay the reasonable fees and
expenses of such counsel. The Corporation need not pay for any settlement made
without its consent. The Corporation need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the Corporation's payment obligations in this
Section, the Trustee will have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of and interest on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(4) or (5) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. A resignation or
removal of the Trustee and appointment of a successor Trustee will become
effective only on the successor Trustee's acceptance of appointment as provided
in this Section.
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The Trustee may resign by so notifying the Corporation. The
Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the removed Trustee and the Corporation. The
Corporation may remove the Trustee if
(1) the Trustee fails to comply with Section 7.10
(Eligibility; Disqualification),
(2) the Trustee is adjudged a bankrupt or an insolvent,
(3) a receiver or other public officer takes charge of
the Trustee or its property or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of trustee for any reason, the Corporation shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the
Corporation.
A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Corporation. Immediately after
that, the retiring Trustee will transfer all property held by it as Trustee,
the resignation or removal of the retiring Trustee will then become effective,
and the successor Trustee will have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee will give notice of its
succession to the Holders of the Securities in accordance with the provisions
of Section 12.02.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Corporation or the Holders of at least 10% in principal amount of the
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 (Eligibility,
Disqualification), any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
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SECTION 7.09. Successor Trustee by Merger, etc. If the
Trustee consolidates with, merges or converts into or transfers all or
substantially all its corporate trust assets to another corporation, the
successor corporation without any further act will be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification. This Indenture
will always have a Trustee that satisfies the requirements of TIA Section
310(a)(1). Such Trustee must have a combined capital and surplus of at least
$25,000,000 as set forth in its most recent published annual report of
condition. Such Trustee will comply with TIA Section 310(b), including the
optional provision permitted by the second sentence of TIA Section 310(b)(9).
SECTION 7.11. Preferential Collection of Claims Against
Corporations. The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed is subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
Repayment to Corporation
SECTION 8.01. Repayment to Corporation. The Trustee and the
Paying Agent will promptly pay or deliver to the Corporation on request any
excess money or securities held by them at any time. The Trustee and the
Paying Agent will pay to the Corporation on request any money held by them for
the payment of principal or interest that remains unclaimed for two years.
Securityholders entitled to the money must look to the Corporation for payment
as general creditors unless an applicable abandoned property law designates
another person.
ARTICLE 9
Amendments, Supplements and Waivers
SECTION 9.01. Without Consent of Holders. The Corporation and
the Trustee may amend this Indenture or the Securities without the consent of
any Securityholder
(1) to cure any ambiguity, defect or inconsistency,
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(2) to comply with Section 5.01 (When Corporation may
merge, etc.),
(3) to provide for uncertificated Registered Securities
in addition to or in place of certificated
Registered Securities, or
(4) to make any change that does not adversely affect the
rights of any Securityholder.
SECTION 9.02. With Consent of Holders. The Corporation and
the Trustee may amend this Indenture or the Securities or coupons with the
written consent of the Holders of at least 66-2/3% in principal amount of the
Securities. However, without the consent of each Securityholder affected, an
amendment under this Section may not
(1) reduce the amount of Securities whose Holders must
consent to an amendment,
(2) reduce the rate of or change the time for payment of
interest on any Registered Security or coupon,
(3) reduce the principal of or extend the fixed maturity
of any Security,
(4) make any Security or interest payable in money other
than that stated in the Security or coupon,
(5) make any change that adversely affects the right to
convert any Security,
(6) make any change in Section 6.04 (Waiver of Past
Defaults), 6.07 (Rights of Holders to Receive
Payment) or this sentence,
(7) make any change in Article 11 that adversely affects
the rights of any Securityholders,
(8) make any change to the right of the Securityholder to
receive additional amounts as provided in paragraph 7
of the Securities (except as otherwise permitted in
this Indenture or the Securities), or
(9) modify the obligation of the Corporation to maintain
offices or agencies in New York, New York and in
a city outside of the United States.
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An amendment under this Section may not make any change that
adversely affects the rights under Article 11 of any holder of an issue of
Senior Debt unless the holders of the issue pursuant to its terms consent to
the change.
After an amendment under this Section becomes effective, the
Company will publish in an Authorized Newspaper and mail to Registered
Securityholders a notice briefly describing the amendment.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities will be set forth in a
supplemental indenture that complies with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an
amendment or waiver becomes effective, a consent to it by a Holder of a
Security is a continuing consent by the Holder and every subsequent Holder of
that Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of the Security if the Trustee receives
the notice of revocation before the date the amendment or waiver becomes
effective. An amendment or waiver becomes effective in accordance with its
terms and thereafter binds every Securityholder.
SECTION 9.05. Notation on or Exchange of Securities. The
Trustee may place an appropriate notation about an amendment or waiver on any
Security thereafter authenticated. The Corporation in exchange for all
Securities may issue and the Trustee will authenticate new Securities that
reflect the amendment or waiver.
SECTION 9.06. Trustee Protected. The Trustee need not sign
any supplemental indenture that adversely affects its rights.
ARTICLE 10
Conversion
SECTION 10.01. Conversion Privilege. A Holder of a Security
may convert it into Common Stock at any time during the period stated in
paragraph 8 of the Securities. The number of shares issuable upon conversion
of a Security
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is determined as follows: Divide the principal amount to be converted by the
conversion price in effect on the conversion date. Round the result to the
nearest 1/100th of a share.
The initial conversion price is stated in paragraph 8 of the
Securities. The conversion price is subject to adjustment.
A Holder may convert a portion of a Registered Security if the
portion is U.S. $5000 or a whole multiple of U.S. $5000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of it.
"Common Stock" means Common Stock of the Corporation as it
exists on the date of this Indenture as originally signed.
SECTION 10.02. Conversion Procedure. To convert a Security a
Holder must satisfy the requirements in paragraph 8 of the Securities. The
date on which the Holder satisfies all those requirements is the conversion
date. As soon as practical, the Corporation will deliver through the
Conversion Agent a certificate for the number of full shares of Common Stock
issuable upon the conversion and a check for any fractional share. The person
in whose name the certificate is registered will be treated as a stockholder of
record on and after the conversion date.
Registered Securities surrendered for conversion during any
period from the close of business on any Record Date (as stated on the face of
the Securities) next preceding any interest payment date to the opening of
business on such interest payment date (except Registered Securities or
portions thereof called for redemption on a redemption date within such period)
must be accompanied by payment in clearing house funds or other funds
acceptable to the Corporation of an amount equal to the interest payable on
such interest payment date on the principal amount of Securities then being
converted which the registered holder is to receive. Bearer Securities
surrendered for conversion must have all unmatured coupons appurtenant thereto.
Except where Securities surrendered for conversion must be accompanied by
payment as described above, no interest on converted Securities will be payable
by the Corporation on any interest payment date subsequent to the date of
conversion. No other payment or adjustment will be made for accrued interest
on a converted Security.
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If a Holder converts more than one Security at the same time,
the number of full shares issuable upon the conversion will be based on the
total principal amount of the Securities converted.
On surrender of a Security that is converted in part, the
Trustee will authenticate for the Holder a new Security equal in principal
amount to the unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a
Legal Holiday in a place where a Conversion Agent is located, the Security may
be surrendered to that Conversion Agent on the next succeeding day that is not
a Legal Holiday.
SECTION 10.03. Fractional Shares. The Corporation will not
issue a fractional share of Common Stock on conversion of a Security. Instead
the Corporation will deliver its check for the current market value of the
fractional share. The current market value of a fraction of a share is
determined as follows: Multiply the current market price of a full share by the
fraction. Round the result to the nearest cent.
The current market price of a share of Common Stock is the
Quoted Price of the Common Stock on the last trading day before the conversion
date. In the absence of such a quotation, the Company will determine the
current market price on the basis of such quotations as it considers
appropriate.
SECTION 10.04. Taxes on Conversion. If a Holder of a Security
converts it, the Corporation shall pay any documentary, stamp or similar issue
or transfer tax due on the issue of shares of Common Stock on the conversion.
However, the Holder shall pay any such tax which is due because the shares are
issued in a name other than the Holder's name.
SECTION 10.05. Corporation to Provide Stock. The Corporation
will reserve out of its authorized but unissued Common Stock or its Common
Stock held in treasury enough shares of Common Stock to permit the conversion
of the Securities.
All shares of Common Stock which may be issued on conversion
of the Securities will be fully paid and non-assessable.
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The Corporation will endeavor to comply with all securities
laws regulating the offer and delivery of shares of Common Stock on conversion
of Securities and will endeavor to list such shares on each national securities
exchange on which the Common Stock is listed.
SECTION 10.06. Adjustment for Change in Capital Stock. If the
Corporation
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock,
(2) subdivides its outstanding shares of Common Stock
into a greater number of shares,
(3) combines its outstanding shares of Common Stock into
a smaller number of shares,
(4) makes a distribution on its Common Stock in shares of
its capital stock other than Common Stock or
(5) issues by reclassification of its Common Stock any
shares of its capital stock,
then the conversion privilege and the conversion price in effect immediately
before such action will be adjusted so that the Holder of a Security thereafter
converted may receive the number of shares of capital stock of the Corporation
which the holder would have owned immediately following such action if the
holder had converted the Security immediately before such action.
The adjustment will become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security on conversion of
it may receive shares of two or more classes of capital stock of the
Corporation, the Corporation will determine the allocation of the adjusted
conversion price between the classes of capital stock. After such allocation,
the conversion privilege and the conversion price of each class of capital
stock will thereafter be subject to adjustment on terms comparable to those
applicable to Common Stock in this Article.
SECTION 10.07. Adjustment for Rights Issue. If the
Corporation distributes any rights or warrants to all
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holders of its Common Stock entitling them for a period expiring within 60 days
after the record date mentioned below to purchase shares of Common Stock at a
price per share less than the current market price per share on that record
date, the conversion price shall be adjusted in accordance with the following
formula:
N x P
C' = C x 0 + M
0 + N
where
C' = the adjusted conversion price.
C = the current conversion price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the
record date.
The adjustment will become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights or warrants.
SECTION 10.08. Adjustment for Other Distributions. If the
Corporation distributes to all holders of its Common Stock any of its assets or
debt securities or any rights or warrants to purchase securities of the
Corporation, the conversion price will be adjusted in accordance with the
formula:
M - F
C' = C X M
where
C' = the adjusted conversion price.
C = the current conversion price.
M = the current market price per share of Common Stock
on the record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share
of Common Stock. The Corporation will determine the
fair market value.
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The adjustment will become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.
This Section does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Corporation. Also, this Section does not apply to rights or
warrants referred to in the foregoing Section.
SECTION 10.09. Current Market Price. In the foregoing two
Sections the current market price per share of Common Stock on any date is the
average of the Quoted Prices of the Common Stock for 30 consecutive trading
days commencing 45 trading days before the date in question. In the absence of
one or more such quotations, the Corporation will determine the current market
price on the basis of such quotations as it considers appropriate.
SECTION 10.10. When Adjustment May Be Deferred. No adjustment
in the conversion price need be made unless the adjustment would require an
increase or decrease of at least 1% in the conversion price. Any adjustments
that are not made will be carried forward and taken into account in any
subsequent adjustment.
All calculations under this Article will be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.
SECTION 10.11. When No Adjustment Required. No adjustment
need be made for a transaction referred to in Section 10.06, 10.07 or 10.08 if
Securityholders are to participate in the transaction on a basis and with
notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Corporation plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
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SECTION 10.12. Notice of Adjustment. Whenever the conversion
price is adjusted, the Corporation will promptly provide to Securityholders a
notice of the adjustment in the manner provided for in Section 12.02. The
Corporation will file with the Trustee a certificate from the Corporation's
independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate will be conclusive
evidence that the adjustment is correct.
SECTION 10.13. Voluntary Reduction. The Corporation from time
to time may reduce the conversion price by any amount for any period of time if
the period is at least 20 days and if the reduction is irrevocable during the
period.
Whenever the conversion price is reduced, the Corporation will
give Securityholders, the Trustee and Conversion Agents a notice of the
reduction, in accordance with the provisions of Section 12.02. The Corporation
will mail the notice at least 15 days before the date the reduced conversion
price takes effect. The notice will state the reduced conversion price and the
period it will be in effect.
A reduction of the conversion price does not change or adjust
the conversion price otherwise in effect for purposes of Sections 10.06 through
10.08.
SECTION 10.14. Notice of Certain Transactions. If
(1) the Corporation takes any action that would require an
adjustment in the conversion price pursuant to Section 10.06, 10.07 or
10.08 and if the Corporation does not let Securityholders participate
pursuant to Section 10.11,
(2) the Corporation takes any action that would require a
supplemental indenture pursuant to Section 10.15 or
(3) there is a liquidation or dissolution of the
Corporation,
the Corporation shall give Securityholders, the Trustee and Conversion Agents a
notice stating the proposed record date for a dividend or distribution or the
proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or
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dissolution. The Corporation shall give the notice in accordance with the
provisions of Section 12.02 at least 15 days before such date. Failure to give
the notice or any defect in it shall not affect the validity of the transaction.
SECTION 10.15. Reorganization of Corporation. If the
Corporation is a party to a transaction subject to Section 5.01 or a merger
which reclassifies or changes its outstanding Common Stock, the person obligated
to deliver securities, cash or other assets on conversion of Securities will
enter into a supplemental indenture. If the issuer of securities deliverable on
conversion of Securities is an affiliate of the surviving, transferee or lessee
corporation, that issuer will join in the supplemental indenture.
The supplemental indenture will provide that the Holder of a
Security may convert it into the kind and amount of securities, cash or other
assets which the Holder would have owned immediately after the consolidation,
merger, transfer or lease if the Holder had converted the Security immediately
before the effective date of the transaction if the Holder failed to exercise
such Holder's right of election, if any, as to the kind or amount of securities,
cash or other property receivable on such transaction or, if such kind or amount
is not the same for each share of non-electing Common Stock, the kind and amount
receivable per share by a plurality of the non-electing shares. The supplemental
indenture will provide for adjustments which will be as nearly equivalent as may
be practical to the adjustments provided for in this Article. The successor
Corporation will mail to Securityholders a notice briefly describing the
supplemental indenture.
If this Section applies, Section 10.06 does not apply.
SECTION 10.16. Corporation Determination Final. Any
determination that the Corporation or the Board of Directors must make pursuant
to Section 10.03, 10.06, 10.08, 10.09 or 10.11 is conclusive.
SECTION 10.17. Trustee's Disclaimer. The Trustee has no duty
to determine when an adjustment under this Article should be made, how it should
be made or what it should be. The Trustee has no duty to determine whether any
provisions of a supplemental indenture under Section 10.15 are correct. The
Trustee makes no representation as to the validity or value of any securities or
assets issued on conver-
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sion of Securities. The Trustee will not be responsible for the Corporation's
failure to comply with this Article. Each Conversion Agent other than the
Corporation will have the same protection under this Section as the Trustee.
ARTICLE 11
Subordination
SECTION 11.01. Agreement to Subordinate. The Corporation
agrees, and each Securityholder by accepting a Security or a beneficial interest
in Security agrees, that the indebtedness evidenced by the Securities is
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Debt, and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 11.02. Certain Definitions.
"Representative" means the indenture trustee or other trustee,
agent or representative for an issue of Senior Debt.
"Senior Debt" (a) the principal of, premium, if any, and
accrued and unpaid interest on (1) indebtedness of the Corporation for money
borrowed, whether outstanding on the date of this Indenture or created, incurred
or assumed after that date, (2) guaranties by the Corporation of indebtedness
for money borrowed by any other person, whether outstanding on the date of this
Indenture or created, incurred or assumed after that date, (3) indebtedness
evidenced by notes, debentures, bonds or other instruments of indebtedness for
the payment of which the Corporation is responsible or liable, by guaranty, or
otherwise, whether outstanding on the date of this Indenture or created,
incurred, or assumed after that date, and (4) obligations of the Corporation
under any agreement to lease, or lease of any real or personal property, whether
outstanding on the date of this Indenture or created, incurred or assumed after
that date, (b) any other indebtedness, liability or obligation, contingent or
otherwise, of the Corporation and any guaranty, endorsement or other contingent
obligation in respect thereof, whether outstanding on the date of the Indenture
or created, incurred or assumed after that date, and (c) modifications,
renewals, extensions and refundings of any such indebtedness, liabilities or
obligations, unless, in the instrument creating or evidencing the same or
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pursuant to which the same is outstanding, it is provided that such
indebtedness, liabilities or obligations, or such modification, renewal,
extension or refunding, or the obligations of the Corporation pursuant to such
guaranty, are not superior in right of payment to the Debentures. Senior Debt
will not include any obligation of the Corporation to any other corporation a
majority of the outstanding voting stock of which is owned by the Corporation.
Senior Debt may be further defined in Section 12.10.
A distribution may consist of cash, securities or other
property.
SECTION 11.03. Liquidation; Dissolution; Bankruptcy. On any
distribution to creditors of the Corporation in a liquidation or dissolution of
the Corporation or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Corporation or its property,
(1) holders of Senior Debt will be entitled to receive
payment in full in cash of the principal of and interest (including
interest accruing after the commencement of any such proceeding) to
the date of payment on the Senior Debt before Securityholders will be
entitled to receive any payment of principal of or interest on
Securities, and
(2) until the Senior Debt is paid in full in cash, any
distribution to which Securityholders would be entitled but for this
Article will be made to holders of Senior Debt as their interests may
appear, except that Securityholders may receive securities that are
subordinated to Senior Debt to at least the same extent as the
Securities.
SECTION 11.04. Default on Senior Debt. The Corporation may
not pay principal of or interest on the Securities and coupons and may not
acquire any Securities for cash or property other than capital stock of the
Corporation if
(1) a default on Senior Debt occurs, and
(2) the default is the subject of judicial proceedings or
the Corporation receives a notice of the default from a person who may
give it pursuant to Section 11.12.
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The Corporation may resume payments on the Securities and may
acquire them when
(a) the default is cured or waived or
(b) 120 days pass after the notice is given if the default
is not the subject of judicial proceedings,
if this Article otherwise permits the payment or acquisition at that time.
SECTION 11.05. Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Corporation will
promptly notify holders of Senior Debt of the acceleration. The Corporation
may pay the Securities when 120 days pass after the acceleration occurs if this
Article permits the payment at that time.
SECTION 11.06. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article should not
have been made to them, the Securityholders who receive the distribution will
hold it in trust for holders of Senior Debt and pay it over to them as their
interests may appear.
SECTION 11.07. Notice by Corporation. The Corporation will
promptly notify the Trustee and the Paying Agent of any facts known to the
Corporation that would cause a payment of principal of or interest on the
Securities to violate this Article.
SECTION 11.08. Subrogation. After all Senior Debt is paid in
full and until the Securities are paid in full, Securityholders will be
subrogated to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Securityholders have been applied to the payment of Senior Debt. A
distribution made under this Article to holders of Senior Debt which otherwise
would have been made to Securityholders is not, as between the Corporation and
Securityholders, a payment by the Corporation on Senior Debt.
SECTION 11.09. Relative Rights. This Article defines the
relative rights of Securityholders and holders of Senior Debt. Nothing in this
Indenture will
(1) impair, as between the Corporation and
Securityholders, the obligation of the Corporation, which
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is absolute and unconditional, to pay principal of and interest on the
Securities and coupons in accordance with their terms,
(2) affect the relative rights of Securityholders and
creditors of the Corporation other than holders of Senior Debt or
(3) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default, subject to the
rights of holders of Senior Debt to receive distributions otherwise
payable to Securityholders.
If the Corporation fails because of this Article to pay
principal of or interest on a Security on the due date, the failure is still a
Default.
SECTION 11.10. Subordination May Not Be Impaired by
Corporation. No right of any holder of Senior Debt to enforce the
subordination of the indebtedness evidenced by the Securities will be impaired
by any act or failure to act by the Corporation or by its failure to comply
with this Indenture.
SECTION 11.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Debt, the distribution may be made and the notice given to their
Representative.
SECTION 11.12. Rights of Trustee and Paying Agent. The
Trustee or Paying Agent may continue to make payments on the Securities until
it receives notice of facts that would cause a payment of principal of or
interest on the Securities to violate this Article. Only the Corporation, a
Representative or a holder of an issue of Senior Debt that has no
Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
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ARTICLE 12
Miscellaneous
SECTION 12.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision that is
required to be included in this Indenture by the TIA, the required provision
will control.
SECTION 12.02. Notices. Any notice or communication by the
Corporation or the Trustee to the other is duly given if in writing and
delivered in person or mailed by first-class mail to the other's address in
Section 12.10. The Corporation or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Where this Indenture provides for notice to Holders of
Securities of any event,
(1) such notice shall be sufficiently given to Holders of
Bearer Securities if published in an Authorized Newspaper in London,
England, and, so long as the Securities are listed on the Luxembourg
Stock Exchange and such stock exchange shall so require, in
Luxembourg, or, if publication in either London or Luxembourg is not
practicable, in Europe on a business day at least twice, each such
publication to be not earlier than the earliest date, and not later
than the latest date, prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at the address of such Holder as it appears on the registration
books of the Registrar, not earlier than the earliest date, and not
later than the latest date, prescribed for the giving of such notice.
Failure to give notice by publication to Holders of Bearer
Securities or any defect in any notice so published shall not affect the
sufficiency of any notice mailed to Holders of Registered Securities. In case
by reason of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice to Holders of
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Bearer Securities as provided above, then notification to Holders of Bearer
Securities as given with the approval of the Trustee shall constitute
sufficient notice to such Holders for every purpose under this Indenture and
under the Securities.
Failure to mail a notice or communication to a Registered
Securityholder or any defect in it will not affect its sufficiency with respect
to other Registered Securityholders or Bearer Securityholders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
If the Corporation mails a notice or communication to
Registered Securityholders, it will mail a copy to the Trustee and each Agent
at the same time.
All other notices or communications will be in writing.
For purposes of this Section, the term "Holders of Bearer
Securities" includes account holders with CEDEL or Euro-Clear who are
beneficial owners of Securities.
The Corporation will also comply with TIA Sec. 313(c)(2) and
(3).
SECTION 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Corporation, the Trustee, the Registrar and anyone else will
have the protection of TIA Sec. 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent. On any request or application by the Corporation to the Trustee to
take any action under this Indenture, the Corporation shall furnish to the
Trustee
(1) an Officers' Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, and
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
51
44
SECTION 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include
(1) a statement that the person making such certificate
or opinion has read such covenant or condition,
(2) a brief statement as to the nature and scope of the
examination or investigation on which the statements or opinions
contained in such certificate or opinion are based,
(3) a statement that, in the opinion of such person, the
person has made such examination or investigation as is necessary to
enable the person to express an informed opinion as to whether such
covenant or condition has been complied with and
(4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders
and for the proving of holdings by Holders of Bearer Securities. The Paying
Agent, Conversion Agent, Transfer Agent or Registrar may make reasonable rules
and set reasonable requirements for its functions.
SECTION 12.07. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday, a legal holiday or a day on which banking institutions in
any city in which a Paying Agent is located are not required to be open. If a
payment date is a Legal Holiday at a place of payment, payment shall be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest will accrue for the intervening period.
SECTION 12.08. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Corporation will not have any
liability for any obligation of the Corporation under the Securities or Coupons
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. All liability described in the Securities of
any director, officer,
52
45
employee or stockholder, as such, of the Corporation is waived and released.
SECTION 12.09. Duplicate Originals. The parties may sign any
number of copies of this Indenture. One signed copy is enough to prove this
Indenture.
SECTION 12.10. Variable Provisions.
"Officer" means the Chairman, President, any Vice-President,
the Treasurer, the Secretary, any Assistant Treasurer or any Assistant
Secretary of the Corporation.
"Quoted Price" of the Common Stock means the last reported
sales price of the Common Stock on the American Stock Exchange.
The first certificate pursuant to Section 4.03 will be for the
fiscal year ending on December 31, 1987.
The reporting date for Section 7.06 is May 15 of each year.
The first reporting date is May 15, 1988.
The Company's address is:
1196 Borregas Avenue
Sunnyvale, California 94088-3427
The Trustee's address is:
127 John Street
New York, New York 10038
53
46
SECTION 12.11. Governing Law. The laws of the State of New
York shall govern this Indenture and the Securities.
SIGNATURES
ATARI CORPORATION
By [SIG]
------------------------------
SECURITY PACIFIC NATIONAL BANK
By [SIG]
------------------------------
54
EXHIBIT A
(Face of Registered Security)
No. R- U.S. $
ATARI CORPORATION
promises to pay to , or registered assigns, the
principal sum of United States Dollars on
April 29, 2002.
5-1/4% Convertible Subordinated Debenture Due 2002
Interest Payment Dates: April 29
Record Dates: April 14
Dated:
Authenticated:
SECURITY PACIFIC NATIONAL BANK
as Trustee
By By
Authorized Officer
OR By
, as Authenticating
Agent
By
Authorized Officer
(SEAL)
(Back of Registered Security)
5-1/4% Convertible Subordinated Debenture Due 2002
1. Interest. Atari Corporation ("Corporation"), a Nevada
corporation, promises to pay interest on the principal amount of this Security
at the rate per annum
55
A-2
shown above. The Corporation will pay interest annually on April 29 of each
year, commencing April 29, 1988. Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from April 29, 1987. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Corporation will pay interest
on the Registered Securities (except defaulted interest) to the persons who are
registered holders of Registered Securities at the close of business on the
record date for the next interest payment date even though Registered
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Registered Securities to a Paying Agent
which is also a Transfer Agent to collect principal payments. The Corporation
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However,
the Corporation may pay principal and interest by check payable in such money
drawn on a bank in New York or for payment of principal, and interest upon
application by a Holder with principal amount of $100,000 or more of Registered
Securities to the Register not later than the record date in which payment is
to be received, by transfer to a dollar account located in New York, New York.
It may mail an interest check to a holder's registered address.
3. Paying Agent, Registrar, Conversion Agent. Initially,
Security Pacific National Bank (the "Trustee"), New York, New York, will act as
Paying Agent, Registrar and Conversion Agent; Credit Suisse (France), Paris,
France, Credit Suisse (Luxembourg) SA, Luxembourg, Grand Duchy of Luxembourg;
Schweizerische Kreditanstalt (Deutschland) AG, Frankfurt, Germany, and Credit
Suisse, London, Great Britain, will serve as Paying and Conversion Agents and
Credit Suisse, Zurich, Switzerland, will serve as Paying Agent. The Corporation
may change any Paying Agent, Registrar, Conversion Agent or co-registrar
without notice. The Corporation may act in any such capacity.
4. Indenture. The Corporation issued the Securities
under an Indenture dated as of April 29, 1987 ("Indenture"), between the
Corporation and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-7bbbb) as in effect on the
date of the Indenture. The Securities are subject to all such terms, and
Securityholders are referred
56
A-3
to the Indenture and the Act for a statement of such terms. The Securities are
unsecured general obligations of the Corporation limited to U.S. $75,000,000 in
total principal amount.
5. Optional Redemption. The Corporation may redeem all
the Securities at any time or some of them from time to time after the
expiration of 30 days from the Exchange Date at the following redemption prices
(expressed in percentages of principal amount), plus accrued interest to the
redemption date.
If redeemed during the 12-month period beginning April 29,
Year Percentage Year Percentage
------ ------------ ------ ----------
1987 106% 1990 103%
1988 105% 1991 102%
1989 104% 1992 101%
and thereafter of a redemption price equal to 100% of the principal amount plus
accrued interest to the date of redemption.
The Securities may not, however, be redeemed before April
29, 1990, unless the closing price of the Common Stock for any 20 trading days
during a period of 30 consecutive trading days ending within 10 days before the
date notice of redemption is given equals or exceeds 130% of the conversion
price then in effect or unless the Securities may be redeemed at 100% of their
principal amount in the circumstances described below.
The Securities may also be redeemed in whole, but not in part,
at 100% of their principal amount, together with interest accrued to the date
fixed for redemption, at the option of the Corporation if, at any time, the
Corporation determines, based on an opinion of independent legal counsel of
recognized standing, that as a result of any change in or amendment to the laws
(or any regulations or rulings promulgated thereunder) of the United States or
any political subdivision or taxing authority thereof or therein affecting
taxation, or any change in the application or official interpretation of such
laws, regulations or rulings, which change or amendment becomes effective on or
after April 6, 1987, there is a substantial probability that the Corporation
has or will become obligated to pay additional amounts in respect of the
Securities as described under Section 7 below. The Corporation may exercise
this
57
A-4
redemption option at any time so long as the conditions specified in this
Section 5 continue to exist at the time the notice of redemption is made.
If the Corporation shall determine (the "Determination"), based
upon an opinion of independent legal counsel of recognized standing, that any
payment made outside the United States by the Corporation or any of its paying
agents of the full amount of the next scheduled payment of principal, premium,
if any, or interest due in respect of any Bearer Security or coupon
appertaining thereto would, under any current or future laws or regulations of
the United States affecting taxation or otherwise, be subject to any
certification, information, documentation or other reporting requirement of any
kind, the effect of which requirement is the disclosure to the Corporation, a
paying agent or any United States government authority of the nationality,
residence or identity of a beneficial owner of such Bearer Security or coupon
who is a United States Alien (other than such a requirement that (i) would not
be applicable to a payment made to a custodian, nominee or other agent of the
beneficial owner or which can be satisfied by such a custodian, nominee or
other agent certifying to the effect that such beneficial owner is a United
States Alien, provided, however, in each case, that payment by such custodian,
nominee or agent to such beneficial owner is not otherwise subject to any
requirement referred to in this sentence, (ii) is applicable only to a payment
by a custodian, nominee or other agent of the beneficial owner to such
beneficial owner or (iii) would not be applicable to a payment made by any
other paying agent of the Corporation), the Corporation shall either (x) redeem
the Securities, as a whole, but not in part, at a price equal to 100% of the
principal amount thereof, together with accrued interest to the date fixed for
redemption, on such date, not later than one year after the publication of
notice of the Determination, as the Corporation shall elect by at least 60 days
prior notice to the Trustee, unless shorter notice is acceptable to the
Trustee, or (y) if the conditions of the next succeeding paragraph are
satisfied, pay the additional amounts specified in such paragraph. The
Corporation shall make the Determination as soon as practicable and shall give
prompt notice thereof to the Trustee, stating in the notice the effective date
of such certification, information, documentation or other reporting
requirement and the date by which the redemption shall take place. Upon
receipt of such notice from the Corporation, the Trustee shall cause notice
thereof to be duly given as provided in Section 6 below. Notwithstanding the
foregoing, the Corporation shall not so
58
A-5
redeem the Securities if the Corporation shall subsequently determine, not less
than 30 days prior to the date fixed for redemption, that subsequent payments
would not be subject to any such requirement, in which case the Corporation
shall give prompt notice of such determination to the Trustee, and the Trustee
shall give notice in accordance with Section 6 and any earlier redemption
notice shall be revoked and of no further effect.
Notwithstanding the foregoing, if and so long as the
certification, information, documentation or other reporting requirement
referred to in the preceding paragraph would be fully satisfied by payment of a
backup withholding tax or similar charge, the Corporation may elect, prior to
publication of the notice of the Determination, to have the provisions of this
paragraph apply in lieu of the provisions of the preceding paragraph. In such
event, the Corporation will pay as additional amounts such amounts as may be
necessary so that every net payment made following the effective date of such
requirement outside the United States by the Corporation or any of its paying
agents of principal, premium, if any, or interest due in respect of any Bearer
Security or any coupon appertaining thereto of which the beneficial owner is a
United States Alien (but without any requirement that the nationality,
residence or identity of the beneficial owner of such Security or coupon be
disclosed to the Corporation, any paying agent or any governmental authority)
after deduction or withholding for or on account of such backup withholding tax
or similar charge (other than a backup withholding tax or similar charge that
(i) would not be applicable in the circumstances referred to in the second
parenthetical of the first sentence of the preceding paragraph or (ii) is
imposed as a result of presentation of such Bearer Security or coupon for
payment more than 15 days after the date on which such payment became due and
payable or on which payment thereof is duly provided for, whichever occurs
later), will not be less than the amount provided for in such Bearer Security
or such coupon to be then due and payable. If the Corporation elects to pay
such additional amounts and as long as it is obligated to pay such additional
amounts, the Corporation may subsequently redeem the Securities, in whole but
not in part, subject to the last sentence of the preceding paragraph, at any
time, at 100% of their principal amount, plus accrued interest and additional.
amounts to the date fixed for redemption.
Notice of intention to redeem Securities will be given in
accordance with Section 6 below. In the case of a partial redemption, notice
will be given twice, the first
59
A-6
such notice to be given not more than 75 nor less than 60 days prior to the
date fixed for redemption and the second such notice to be given at least 30
days thereafter but not less than 30 days prior to the date fixed for
redemption. In the case of a full redemption, notice shall be given at least
30, but not more than 60 days prior to the date fixed for redemption.
Notices of redemption will specify the date fixed for
redemption, the applicable redemption price and, in the case of a partial
redemption, the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of the Securities which will be outstanding after
such partial redemption. In addition, in the case of a partial redemption, the
first notice will specify the last date on which exchanges or transfers of
Securities may be made pursuant to the provisions of Section 10 below and the
second notice will specify the serial numbers of the Bearer Securities called
for redemption or, in the case of Registered Securities, the serial numbers and
the portions thereof called for redemption, which shall have been selected for
redemption pro rata or by lot.
Any Registered Security that is to be redeemed only in part
shall be surrendered at the principal corporate trust office of the Trustee in
New York, New York, or, subject to applicable laws and regulations, any paying
agent which is also a transfer agent (with, if the Corporation, the Trustee or
such paying agent so requires with respect to a Registered Security, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Corporation and the Registrar or such paying agent duly executed by, the Holder
thereof or his attorney duly authorized in writing), and, subject to the
restrictions contained herein, the Corporation shall execute, and the Trustee
shall authenticate and deliver to the Securityholder without service charge, a
new Security or Securities, of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
6. Notice of Redemption. Notice of redemption will be
mailed to each holder of Registered Securities to be redeemed at his registered
address. Registered Securities in denominations larger than U.S. $5,000 may be
redeemed in, part but only in whole multiples of U.S. $5,000. On and after the
redemption date interest ceases to accrue on Securities or portions of them
called for redemption.
60
A-7
7. Payment of Additional Amounts. The Corporation,
subject to the limitations and exceptions set forth below, will pay to the
holder of any Security or coupon who is a United States Alien such amounts as
may be necessary in order that every net payment of principal of or premium, if
any, or interest on such Security or coupon, after deduction or withholding for
or on account of any present or future tax, assessment or other governmental
charge imposed upon or as a result of such payment by the United States or any
political subdivision or taxing authority thereof or therein, will not be less
than the amount provided for in such Security or coupon to be then due and
payable; provided, however that the foregoing obligation to pay additional
amounts shall not apply to:
(a) any tax, assessment or other governmental charge
which would not have been so imposed but for (i) the existence
of any present or former connection between such holder (or
between a fiduciary, settlor, beneficiary, member or shareholder
of, or possessor of a power over, such holder, if such holder is
an estate, trust, partnership or corporation) and the United
States, including without limitation, such holder (or such
fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen or resident thereof or
being or having been engaged in a trade or business therein or
being or having been present therein or having or having had a
permanent establishment therein, (ii) the failure of such holder
or the beneficial owner of such Security or coupon to comply
with any requirements under United States income tax laws and
regulations, without regard to any tax treaty, to establish
entitlement to exemption from deduction or withholding as a
United States Alien, or (iii) such holder's present or former
status as a personal holding company or a foreign personal
holding company with respect to the United States, as a
controlled foreign corporation with respect to the United
States, as a private foundation or other tax-exempt
organization, or as a corporation which accumulates earnings to
avoid United States federal income tax;
(b) any tax, assessment or other governmental charge
which would not have been so imposed but for the presentation
by the holder of such Security or coupon for payment on a date
more than 15 days after the date on which such payment became
due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
61
A-8
(c) any estate, inheritance, gift, sales, transfer,
capital, personal property or any similar tax, assessment or
governmental charge;
(d) any tax, assessment or other governmental charge
which is payable otherwise than by deduction and withholding
from payments of principal of, premium, if any, or interest on
such Security or coupon;
(e) any tax, assessment or other governmental charge
imposed by reason of the holder's present or former status as
the actual or constructive owner of 10% or more of the total
combined voting power of all classes of stock of the Corporation
entitled to vote;
(f) any tax, assessment or other governmental charge
required to be withheld by any paying agent from any payment of
principal of, premium, if any, or interest on such Security or
coupon, if such payment could be paid without withholding by any
other paying agent;
(g) any combination of items (a), (b), (c), (d), (e)
and (f);
nor shall additional amounts be paid with respect to any payment of principal,
premium, if any, or interest to any United States Alien who is a fiduciary or
partnership or other than the sole beneficial owner of a Security or coupon to
the extent a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner of the Security or coupon would not
have been entitled to payment of the additional amounts had such beneficiary,
settlor, member or beneficial owner been the holder of the Security or coupon.
"United States Alien", as used in this Security, means any
corporation, partnership, individual or fiduciary that, is for United States
federal income tax purposes (i) a foreign corporation, (ii) a foreign
partnership one or more of the members of which is for United States federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust, (iii) a nonresident
alien individual or (iv) a nonresident alien fiduciary of a foreign estate or
trust.
8. Conversion. A holder of a Security may convert it
into Common Stock of the Corporation at any time.
62
A-9
on or after the date on which definitive Securities are issued in exchange for
the Global Security and before the close of business on April 29, 2002. If the
Security is called for redemption, the holder may convert it at any time before
the close of business on the redemption date. The initial conversion price is
U.S. $32-5/8 per share, subject to adjustment in certain events. To determine
the number of shares issuable upon conversion of a Security, divide the
principal amount to be converted by the conversion price in effect on the
conversion date. Registered Securities surrendered for conversion during any
period from the close of business on any record date (as stated above) next
preceding any interest payment date to the opening of business on such interest
payment date (except Registered Securities or portions thereof called for
redemption on a redemption date within such period) must be accompanied by
payment in clearing house funds or other funds acceptable to the Corporation of
an amount equal to the interest payable on such interest payment date on the
principal amount of Securities then being converted which the registered holder
is to receive. Except where Securities surrendered for conversion must be
accompanied by payment as described above, no interest on converted Securities
will be payable by the Corporation on any interest payment date subsequent to
the date of conversion. On conversion no payment or adjustment for interest
will be made. The Corporation will deliver a check for any fractional share.
To convert a Security a holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to a
Conversion Agent, (3) furnish appropriate endorsements and transfer documents if
required by the Registrar or Conversion Agent, and (4) pay any transfer or
similar tax if required. A holder may convert a portion of a Security if the
portion is U.S. $5000 or a whole multiple of U.S. $5000.
The conversion price will be adjusted for dividends or
distributions on Common Stock payable in Company stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock at less than
the current market price at the time; distributions to such holders of assets or
debt securities of the Company or certain rights to purchase securities of the
Company (excluding cash dividends or distributions from current or retained
earnings). However, no adjustment need be made if Securityholders may
participate in the transaction or in certain other cases. The Company from
time to
63
A-10
time may voluntarily reduce the conversion price for a period of time.
If the Company is a party to a consolidation or merger or a transfer
or lease of all or substantially all of its assets, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another.
9. Subordination. The Securities are subordinated to
all existing and future Senior Debt of the Corporation. To the extent provided
in the Indenture, Senior Debt must be paid before the Securities may be paid.
There are no restrictions in the Indenture on the amount of Senior Debt the
Corporation may have outstanding. The Corporation agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
10. Denominations, Transfer, Exchange. The Registered
Securities are in registered form without coupons in denominations of U.S.
$5,000 and whole multiples of U.S. $5,000. The transfer of Registered
Securities may be registered and Registered Securities may be exchanged as
provided in the Indenture. The Registrar may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Security or portion
of a Security selected for redemption. Also, it need not exchange or register
the transfer of any Securities for a period of 15 days before a selection of
Securities to be redeemed.
Registered Securities may not be exchanged for Bearer Securities.
11. Persons Deemed Owners. The registered holder of a
Registered Security may be treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended with the consent of
the holders of at least 66-2/3% in principal amount of the Securities, and any
existing default may be waived with the consent of the holders of a majority in
principal amount of the Securities. Without the consent of any Securityholder,
the Indenture or the Securities may be amended to cure any ambiguity, defect or
inconsistency,
64
A-11
to provide for assumption of Corporation obligations to Securityholders or to
make any change that does not adversely affect the rights of any
Securityholder.
13. Defaults and Remedies. An Event of Default is
default for 30 days in payment of interest on the Securities, default in
payment of principal on them, acceleration of any indebtedness for borrowed
money of the Corporation exceeding U.S. $5,000,000 in the aggregate if such
acceleration is not cured or waived within 30 days after notice to the
Corporation from the Trustee or the holders of 25% in principal amount of the
Securities, failure by the Corporation for 60 days after notice to it to comply
with any of its other agreements in the Indenture or the Securities, and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the holders of at least 25% in principal amount
of the Securities may declare all the Securities to be due and payable
immediately.
14. Trustee Dealings with Corporation. Security Pacific
National Bank, the Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Corporation or its Affiliates, and may otherwise deal with the Corporation or
its Affiliates, as if it were not Trustee.
15. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Corporation will not have any
liability for any obligations of the Corporation under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
16. Authentication. This Security will not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used
in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
right of survivorship and not as tenants in common), CUST (=Custodian), and
UGMA (=Uniform Gifts to Minors Act).
65
A-12
CONVERSION NOTICE
The undersigned holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is U.S.
$5,000 or an integral multiple thereof) below designated, into Common Stock in
accordance with the terms of the Indenture referred to in this Security,
delivers herewith the amount of interest payable on the next interest payment
date if this conversion is made between the record date for such interest
payment date and such interest payment date, and directs that such shares,
together with a check in payment for any fractional share and any Securities
representing any unconverted principal amount hereof, be delivered to and be
registered in the name of the undersigned unless a different name has been
indicated below. If the Common Stock is to be registered in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto.
Dated:
If Common Stock or Securities are to be registered in the name of a Person
other than the Securityholder, please print such Person's name and address, and
taxpayer identification number, if applicable:
- ------------------------------------
- ------------------------------------
- ------------------------------------
/s/
- ------------------------------------
(Signature must be guaranteed by a bank or stockbroker who is a member of a
national stock exchange)
If only a portion of the Securities is to be converted, please indicate:
1. Principal Amount to be converted: U.S.$
2. Amount and denomination of Registered Securities representing
unconverted principal amount to be issued:
Amount: U.S.$
Denominations: U.S.$
(U.S. $5,000 or an integral multiple thereof)
66
EXHIBIT B
(Face Of Bearer Security)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
No. BV U.S.$
ATARI CORPORATION
promises to pay to bearer upon presentation and surrender of this Security the
principal sum of Five Thousand United States Dollars on April 29, 2002.
5 1/4% Convertible Subordinated Debenture Due 2002 Interest Payment Dates:
April 29
Dated:
Authenticated:
SECURITY PACIFIC NATIONAL BANK
as Trustee
By By
Authorized Officer
OR By
, as Authenticating
Agent
By
Authorized Officer
(SEAL)
(Back of Bearer Security)
5 1/4% Convertible Subordinated Debenture Due 2002
1. Interest. Atari Corporation ("Corporation"), a Nevada
corporation, promises to pay interest oh the principal amount of this Security
at the rate per annum
67
B-2
shown above. The Corporation will pay interest annually on April 29 of each
year, commencing April 29, 1988. Interest on the Securities will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from April 29, 1987. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. Bearer holders must surrender
Bearer Securities or the attached coupons as they mature to a Paying Agent to
collect principal and interest payments. The Corporation will pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Corporation may
pay principal and interest by check payable in such money.
Payments of principal, premium, if any, and interest shall be
made at offices of the Paying Agents, as stated in Section 3 or as the
Corporation may otherwise designate, located outside the United States, subject
to the laws and regulations applicable to such Paying Agents. Payments may be
made, at the option of the Holder, by transfer of a United States dollar check
drawn on a bank in New York, New York, or by transfer of United States dollars
to a dollar account maintained by the payee with a bank in a European city. If
such payment at the offices of the Paying Agents outside the United States,
become illegal or effectively precluded because of the imposition of exchange
controls or similar restrictions on the full payment or receipt of such amounts
in dollars, the Corporation may instruct such payments to be made at an office
or agency within the United States.
3. Paying and Conversion Agents. Initially, Security
Pacific National Bank (the "Trustee"), New York, New York, will act as Paying
Agent, Registrar and Conversion Agent; Credit Suisse (France), Paris, France,
Credit Suisse (Luxembourg) SA, Luxembourg, Grand Duchy of Luxembourg;
Schweizerische Kreditanstalt (Deutschland) AG, Frankfurt, Germany, and Credit
Suisse, London, Great Britain, will serve as Paying and Conversion Agents and
Credit Suisse, Zurich, Switzerland, will serve as Paying Agent. The
Corporation may change any Paying or Conversion Agent without notice. The
Corporation may act in any such capacity. Except as provided in Paragraph 2,
Bearer Securities may only be paid or converted at offices outside the United
States.
68
B-3
4. Indenture. The Corporation issued the Securities
under an Indenture dated as of April 29, 1987 ("Indenture"), between the
Corporation and the Trustee. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-7bbbb) as in effect on the
date of the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
such terms. The Securities are unsecured general obligations of the Corporation
limited to U.S. $75,000,000 in total principal amount.
5. Optional Redemption. The Corporation may redeem all
the Securities at any time or some of them from time to time after the
expiration of 30 days from the Exchange Date at the following redemption prices
(expressed in percentages of principal amount), plus accrued interest to the
redemption date.
If redeemed during the 12-month period beginning April 29,
Year Percentage Year Percentage
---- ---------- ---- ----------
1987 106% 1990 103%
1988 105% 1991 102%
1989 104% 1992 101%
and thereafter at a redemption price equal to 100% of the principal amount plus
accrued interest at the date of redemption.
The Securities may not, however, be redeemed before April 29,
1990, unless the closing price of the Common Stock for any 20 trading days
during a period of 30 consecutive trading days ending within 10 days before the
date notice of redemption is given equals or exceeds 130% of the conversion
price then in effect or unless the Securities may be redeemed at 100% of their
principal amount in the circumstances described below.
The Securities may also be redeemed in whole, but not in part,
at 100% of their principal amount, together with interest accrued to the date
fixed for redemption, at the option of the Corporation if, at any time, the
Corporation determines, based on an opinion of independent legal counsel of
recognized standing, that as a result of any change in or amendment to the laws
(or any regulations or rulings promulgated thereunder) of the United States or
any
69
B-4
political subdivision or taxing authority thereof or therein affecting
taxation, or any change in the application or official interpretation of such
laws, regulations or rulings, which change or amendment becomes effective on or
after April 6, 1987, there is a substantial probability that the Corporation
has or will become obligated to pay additional amounts in respect of the
Securities as described under Section 7 below. The Corporation may exercise
this redemption option at any time so long as the conditions specified in this
Section 5 continue to exist at the time the notice of redemption is made.
If the Corporation shall determine (the "Determination"), based
upon an opinion of independent legal counsel of recognized standing, that any
payment made outside the United States by the Corporation or any of its paying
agents of the full amount of the next scheduled payment of principal, premium,
if any, or interest due in respect of any Bearer Security or coupon
appertaining thereto would, under any current or future laws or regulations of
the United States affecting taxation or otherwise, be subject to any
certification, information, documentation or other reporting requirement of any
kind, the effect of which requirement is the disclosure to the Corporation, a
paying agent or any United States government authority of the nationality,
residence or identity of a beneficial owner of such Bearer Security or coupon
who is a United States Alien (other than such a requirement that (i) would not
be applicable to a payment made to a custodian, nominee or other agent of the
beneficial owner or which can be satisfied by such a custodian, nominee or
other agent certifying to the effect that such beneficial owner is a United
States Alien, provided, however, in each case, that payment by such custodian,
nominee or agent to such beneficial owner is not otherwise subject to any
requirement referred to in this sentence, (ii) is applicable only to a payment
by a custodian, nominee or other agent of the beneficial owner to such
beneficial owner or (iii) would not be applicable to a payment made by any
other paying agent of the Corporation), the Corporation shall either (x) redeem
the Security, as a whole, but not in part, at a price equal to 100% of the
principal amount thereof, together with accrued interest to the date fixed for
redemption, on such date, not later than one year after the publication of
notice of the Determination, as the Corporation shall elect by at least 60 days
prior notice to the Trustee, unless shorter notice is acceptable to the
Trustee, or (y) if the conditions of the next succeeding paragraph are
satisfied, pay the additional amounts specified in such paragraph. The
Corporation shall make the
70
B-5
Determination as soon as practicable and shall give prompt notice thereof to
the Trustee, stating in the notice the effective date of such certification,
information, documentation or other reporting requirement and the date by which
the redemption shall take place. Upon receipt of such notice from the
Corporation, the Trustee shall cause notice thereof to be duly published as
provided in Section 6 below. Notwithstanding the foregoing, the Corporation
shall not so redeem the Securities if the Corporation shall subsequently
determine, not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such requirement, in which case
the Corporation shall give prompt notice of such determination to the Trustee,
and the Trustee shall publish notice in accordance with Section 6 and any
earlier redemption notice shall be revoked and of no further effect.
Notwithstanding the foregoing, if and so long as the
certification, information, documentation or other reporting requirement
referred to in the preceding paragraph would be fully satisfied by payment of a
backup withholding tax or similar charge, the Corporation may elect, prior to
publication of the notice of the Determination, to have the provisions of this
paragraph apply in lieu of the provisions of the preceding paragraph. In such
event, the Corporation will pay as additional amounts such amounts as may be
necessary so that every net payment made following the effective date of such
requirement outside the United States by the Corporation or any of its paying
agents of principal, premium, if any, or interest due in respect of any Bearer
Security or any coupon appertaining thereto of which the beneficial owner is a
United States Alien (but without any requirement that the nationality,
residence or identity of the beneficial owner of such Security or coupon be
disclosed to the Corporation, any paying agent or any governmental authority)
after deduction or withholding for or on account of such backup withholding tax
or similar charge (other than a backup withholding tax or similar charge that
(i) would not be applicable in the circumstances referred to in the second
parenthetical of the first sentence of the preceding paragraph or (ii) is
imposed as a result of presentation of such Bearer Security or coupon for
payment more than 15 days after the date on which such payment became due and
payable or on which payment thereof is duly provided for, whichever occurs
later), will not be less than the amount provided for in such Bearer Security
or such coupon to be then due and payable. If the Corporation elects to pay
such additional amounts and as long as it is obligated to pay such additional
amounts, the Corporation may subsequently redeem the
71
B-6
Securities, in whole but not in part, subject to the last sentence of the
preceding paragraph, at any time, at 100% of their principal amount, plus
accrued interest and additional amounts to the date fixed for redemption.
Notice of intention to redeem Securities will be given in
accordance with Section 6 below. In the case of a partial redemption, notice
will be given twice, the first such notice to be given not more than 75 nor
less than 60 days prior to the date fixed for redemption and the second such
notice to be given at least 30 days thereafter but not less than 30 days prior
to the date fixed for redemption. In the case of a full redemption, notice
shall be given at least 30, but not more than 60 days prior to the date fixed
for redemption.
Notices of redemption will specify the date fixed for
redemption, the applicable redemption price and, in the case of a partial
redemption, the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of the Securities which will be outstanding after
such partial redemption. In addition, in the case of a partial redemption, the
first notice will specify the last date on which exchanges or transfers of
Securities may be made pursuant to the provisions of Section 10 below and the
second notice will specify the serial numbers of the Bearer Securities called
for redemption or, in the case of Registered Securities, the serial numbers and
the portions thereof called for redemption, which shall have been selected for
redemption pro rata or by lot.
Any Bearer Security that is redeemed must be presented for
payment together with all unmatured coupons failing which the amount of any
missing unmatured coupons will be deducted from the sum due for payment. Each
amount so deducted will be paid against surrender of the relevant missing
coupon.
6. Notice of Redemption. Notice of redemption as
required by Section 5 above will be published in an Authorized Newspaper, in
London, England, and, so long as the Securities are listed on the Luxembourg
Stock Exchange and such stock exchange shall so require, in Luxembourg, or, if
publication in either London or Luxembourg is not practicable, in Europe on a
business day at least twice, the first such publication to be not earlier than
the earliest date, and not later than the latest date, prescribed for the
giving of such notice. On and after the redemption date
72
B-7
interest ceases to accrue on Securities called for redemption.
7. Payment of Additional Amounts. The Corporation,
subject to the limitations and exceptions set forth below, will pay to the
holder of any Security or coupon who is a United States Alien such amounts as
may be necessary in order that every net payment of principal of or premium, if
any, or interest on such Security or coupon, after deduction or withholding for
or on account of any present or future tax, assessment or other governmental
charge imposed upon or as a result of such payment by the United States or any
political subdivision or taxing authority thereof or therein, will not be less
than the amount provided for in such Security or coupon to be then due and
payable; provided, however, that the foregoing obligation to pay additional
amounts shall not apply to:
(a) any tax, assessment or other governmental charge
which would not have been so imposed but for (i) the existence of any
present or former connection between such holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or
possessor of a power over, such holder, if such holder is an estate,
trust, partnership or corporation) and the United States, including
without limitation, such holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a
citizen or resident thereof or being or having been engaged in a trade
or business therein or being or having been present therein or having
or having had a permanent establishment therein, (ii) the failure of
such holder or the beneficial owner of such Security or coupon to
comply with any requirements under United States income tax laws and
regulations, without regard to any tax treaty, to establish
entitlement to exemption from deduction or withholding as a United
States Alien, or (iii) such holder's present or former status as a
personal holding company or a foreign personal holding company with
respect to the United States, as a controlled foreign corporation with
respect to the United States, as a private foundation or other
tax-exempt organization, or as a corporation which accumulates
earnings to avoid United States federal income tax;
(b) any tax, assessment or other governmental charge
which would not have been so imposed but for the presentation by the
holder of such Security or coupon for payment on a date more than 15
days after the date
73
B-8
on which such payment became due and payable or the date on which
payment thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer,
capital, personal property or any similar tax, assessment or
governmental charge;
(d) any tax, assessment or other governmental charge
which is payable otherwise than by deduction and withholding from
payments of principal of, premium, if any, or interest on such
Security or coupon;
(e) any tax, assessment or other governmental charge
imposed by reason of the holder's present or former status as the
actual or constructive owner of 10% or more of the total combined
voting power of all classes of stock of the Corporation entitled to
vote;
(f) any tax, assessment or other governmental charge
required to be withheld by any paying agent from any payment of
principal of, premium, if any, or interest on such Security or coupon,
if such payment could be paid without withholding by any other paying
agent;
(g) any combination of items (a), (b), (c), (d), (e)
and (f);
nor shall additional amounts be paid with respect to any payment of principal,
premium, if any, or interest to any United States Alien who is a fiduciary or
partnership or other than the sole beneficial owner of a Security or coupon to
the extent a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner of the Security or coupon would not
have been entitled to payment of the additional amounts had such beneficiary,
settlor, member or beneficial owner been the holder of the Security or coupon.
"United States Alien", as used in this Security, means any
corporation, partnership, individual or fiduciary that, is for United States
federal income tax purposes (i) a foreign corporation, (ii) a foreign
partnership one or more of the members of which is for United States federal
income tax purposes, a foreign corporation, a non-resident alien individual or
a non-resident alien fiduciary of a foreign estate or trust, (iii) a
non-resident alien
74
B-9
individual or (iv) a non-resident alien fiduciary of a foreign estate or trust.
8. Conversion. A holder of a Security may convert it
into Common Stock of the Corporation at any time on or after the date on which
definitive Securities are issued in exchange for the Global Security and before
the close of business on April 29, 2002. If the Security is called for
redemption, the holder may convert it at any time before the close of business
on the redemption date. The initial conversion price is U.S. $32-5/8 per
share, subject to adjustment in certain events. To determine the number of
shares issuable upon conversion of a Security, divide the principal amount to
be converted by the conversion price in effect on the conversion date. No
interest on converted Bearer Securities will be payable by the Corporation on
any interest payment date subsequent to the date of conversion. On conversion
no payment or adjustment for interest will be made. The Corporation will
deliver a check for any fractional share.
Surrender of Bearer Securities must occur in the offices of
the Conversion Agents in Section 3 above which are located outside the United
States. Each Bearer Security must be delivered with all unmatured coupons
appurtenant thereto.
To convert a Security a holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to a
Conversion Agent, (3) furnish appropriate endorsements and transfer documents
if required by the Registrar or Conversion Agent, and (4) pay any transfer or
similar tax if required.
The conversion price will be adjusted for dividends or
distributions on Common Stock payable in Company stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock at less than
the current market price at the time; distributions to such holders of assets
or debt securities of the Company or certain rights to purchase securities of
the Company (excluding cash dividends or distributions from current or retained
earnings). However, no adjustment need be made if Securityholders may
participate in the transaction or in certain other cases. The Company from
time to time may voluntarily reduce the conversion price for a period of time.
75
B-10
If the Company is a party to a consolidation or merger or a transfer
or lease of all or substantially all of its assets, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another.
9. Subordination. The Securities are subordinated to all
existing and future Senior Debt of the Corporation. To the extent provided in
the Indenture, Senior Debt must be paid before the Securities may be paid.
There are no restrictions in the Indenture on the amount of Senior Debt the
Corporation may have outstanding. The Corporation agrees, and each
Securityholder by accepting a Security agrees, to the subordination and
authorizes the Trustee to give it effect.
10. Denominations, Transfer, Exchange. The Bearer
Securities are in bearer form with coupons in denominations of U.S. $5,000.
The transfer of Securities may be by delivery and Securities may be exchanged
for Registered Securities as provided in the Indenture.
11. Persons Deemed Owners. The holder of a Bearer
Security may be treated as its owner for all purposes.
12. Amendments and Waivers. Subject to certain
exceptions, the Indenture or the Securities may be amended with the consent of
the holders of at least 66-2/3% in principal amount of the Securities, and any
existing default may be waived with the consent of the holders of a majority in
principal amount of the Securities. Without the consent of any Securityholder,
the Indenture or the Securities may be amended to cure any ambiguity, defect or
inconsistency, to provide for assumption of Corporation obligations to
Securityholders or to make any change that does not adversely affect the rights
of any Securityholder.
13. Defaults and Remedies. An Event of Default is
default for 30 days in payment of interest on the Securities, default in
payment of principal on them, acceleration of any indebtedness for borrowed
money of the Corporation exceeding U.S. $5,000,000 in the aggregate if such
acceleration is not cured or waived within 30 days after notice to the
Corporation from the Trustee or the holders of 25% in principal amount of the
Securities, failure by the Corporation for 60 days after notice to it to comply
with any of its other agreements in the Indenture or the Securities, and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the holders
76
B-11
of at least 25% in principal amount of the Securities may declare all the
Securities to be due and payable immediately. Securityholders may not enforce
the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their interests. The
Corporation must furnish an annual compliance certificate to the Trustee.
14. Trustee Dealings with Corporation. Security Pacific
National Bank, the Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Corporation or its Affiliates, and may otherwise deal with the Corporation or
its Affiliates, as if it were not Trustee.
15. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Corporation will not have any
liability for any obligations of the Corporation under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
16. Authentication. This Security will not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used
in the name of a Securityholder or an assignee, such as: TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
right of survivorship and not as tenants in common), CUST (=Custodian), and
UGMA (=Uniform Gifts to Minors Act).
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably
exercises the option to convert this Security
77
B-12
into Common Stock in accordance with the terms of the Indenture referred to in
this Security and directs that such shares be registered in the name of and
delivered, together with a check in payment for any fractional share, to the
undersigned unless a different name has been indicated below. If shares are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Pursuant
to the provisions of the Indenture and Security, the undersigned surrenders all
outstanding coupons appertaining to this Security.
Dated:
If shares are to be registered in the name of and delivered to a Person other
than the Holder, please print such Person's name and address, and taxpayer
identification number, if applicable:
----------------------------
----------------------------
----------------------------
- --------------------------
HOLDER
Please print name and address, and taxpayer identification number, if
applicable, of Holder:
----------------------------
----------------------------
----------------------------
78
EXHIBIT C
[FORM OF FACE OF COUPON)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTION 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
ATARI CORPORATION
No.
U.S. $
Due
5-1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2002
Unless the Debenture to which this coupon appertains shall have been
called for previous redemption with payment duly provided for or converted, on
the date set forth above, Atari Corporation (the "Company") will pay to bearer,
upon presentation and surrender of this coupon, the amount shown above
(together with any additional amounts which the Company may be required to pay
according to the terms of the Debenture and the Indenture for the Debenture) at
the Paying Agents set out on the reverse hereof or at such other places (which,
except as otherwise provided in the Debenture to which this coupon appertains,
shall be located outside the United States of America (including the States and
the District of Columbia), its territories, its possessions or other areas
subject to its jurisdictions (the "United States")) as the Company may
determine from time to time, by United States dollar check drawn on a bank in
New York, New York, or by transfer of United States dollars to a dollar account
maintained by the payee with a bank in a European city, being one year's
interest then payable on the Debenture.
ATARI CORPORATION,
By
Chief Financial Officer
79
2
[Reverse of Coupon]
CREDIT SUISSE (FRANCE) CREDIT SUISSE (LUXEMBOURG) SA
92, Avenue des Champs-Elysees 23, Avenue Monterey, B.P. 40
F-75008 Paris Luxembourg
France Grand Duchy of Luxembourg
SCHWEIZERISCHE KREDITANSTALT CREDIT SUISSE
(Deutschland) AG 24, Bishopsgate
P. 0. Box 100529 London EC2N 4BQ
D-6000 Frankfurt a/M 1 Great Britain
Federal Republic of Germany
CREDIT SUISSE
P. 0. Box 590
CH-8021 Zurich
Switzerland
80
EXHIBIT D
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (the "SECURITIES ACT"). NEITHER THIS SECURITY NOR ANY
INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED DIRECTLY OR INDIRECTLY IN THE
UNITED STATES OF AMERICA (INCLUDING THE STATES AND THE DISTRICT OF COLUMBIA),
ITS TERRITORIES, ITS POSSESSIONS OR OTHER AREAS SUBJECT TO ITS JURISDICTION
(THE "UNITED STATES"), OR TO ANY CITIZEN OR RESIDENT THEREOF OR TO ANY
CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE
LAWS OF THE UNITED STATES OR TO ANY ESTATE OR TRUST THE INCOME OF WHICH IS
SUBJECT TO UNITED STATES FEDERAL INCOME TAXATION REGARDLESS OF ITS SOURCE
("U.S. PERSON") EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
U.S. $75,000,000
ATARI CORPORATION
5-1/4% Convertible Subordinated Debentures Due 2002
TEMPORARY GLOBAL DEBENTURE
ATARI CORPORATION (the "Corporation") promises to pay to
bearer upon presentation and surrender of this Global Debenture the principal
sum of Seventy Five Million United States Dollars on April 29, 2002, and to pay
interest from April 29, 1987, annually in arrears on April 29 in each year,
commencing April 29, 1988, at the rate of 5-1/4% per annum, until the principal
of this Global Debenture is paid or made available for payment. Interest,
however, on this Global Debenture shall be payable only after the issuance of
the definitive Debentures for which this Global Debenture is exchangeable
(except that if any interest payment date occurs before the Exchange Date, the
interest payment due on such date may be made upon certification that the
beneficial owners of the relevant Debentures are not U.S. Persons or persons
who have purchased for resale to U.S. Persons) and, in the case of definitive
Debentures in bearer form, only
81
D-2
upon presentation and surrender (at an office or agency outside the United
States, except as otherwise provided in the Indenture referred to below) of the
interest coupons attached as they mature.
This Global Debenture is one of a duly authorized issue of
Debentures of the Corporation designated as specified in the above title,
issued and to be issued under the Indenture dated as of April 29, 1987 (the
"Indenture"), between the Corporation and the Security Pacific National Bank,
as trustee (the "Trustee"). It is a temporary debenture and is exchangeable in
whole or from time to time in part without charge upon request to the holder of
this Global Debenture for definitive Debentures in bearer form, with interest
coupons attached, or in registered form, without coupons, of authorized
denominations, (a) not before the later of 90 days after the date on which the
distribution of the Debentures has been completed, as PaineWebber International
Capital Inc. shall have advised the Trustee in writing, and the effectiveness
of the registration of the Debentures for resale under the Securities Act, and
(b) as promptly as practicable following presentation of certification, in the
form set forth in the Indenture for this purpose, that the beneficial owner or
owners of this Global Debenture (or, if such exchange is only for a part of
this Global Debenture, of such part) are not U.S. Persons or persons who have
purchased for resale to any U.S. Person. If, however, a beneficial owner of
any Debenture is a sophisticated United States institutional investor (a "U.S.
Institutional Investor"), the Trustee will exchange the portion of the
temporary Global Debenture owned by such U.S. Institutional Investor for
definitive Registered Debentures as soon as practicable after issuance of the
Debentures, upon certification that such Debentures have been sold to such U.S.
Institutional Investor in a private sale of Registered Debentures only to
certain U.S. Institutional Investors to whom the sale of the Registered
Debentures would be exempt from the registration requirements of the Securities
Act. Such Registered Debentures, if and when sold, will be sold subject to
such restrictions as to preclude a distribution prior to the effectiveness of
registration of the Debentures for resale under the Securities Act. Such
Registered Debentures will be issued in registered form only and will not be
exchangeable at any time for Bearer Debentures. Definitive Debentures in
bearer form to be delivered in exchange for any part of this Global Debenture
shall be delivered only outside the United States. Upon any exchange of a part
of this Global Debenture for definitive Debentures, the portion of the
principal amount
82
D-3
of this Global Debenture so exchanged shall be endorsed by the Trustee on the
schedule attached to this Global Debenture, and the principal amount of this
Global Debenture shall be reduced for all purposes by the amount so exchanged.
Until exchanged in full for definitive Debentures, this Global
Debenture shall in all respects be entitled to the same benefits under, and
subject to the same terms and conditions of, the Indenture as authenticated and
delivered definitive Debentures, except that neither the Holder of nor the
beneficial owners of this Global Debenture shall be entitled to receive payment
of interest (except as provided above) or to convert this Global Debenture into
Common Shares of the Company or any other security, cash or other property.
This Global Debenture shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Global Debenture which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication has been executed by
the Trustee by the manual signature of one of its authorized officers, this
Global Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
83
D-4
IN WITNESS WHEREOF, the Company has caused this Global Debenture
to be duly executed.
Dated: April 29, 1987
ATARI CORPORATION
By
Title:
Authenticated:
SECURITY PACIFIC NATIONAL BANK,
as Trustee
By
Authorized Officer
84
D-5
SCHEDULE OF EXCHANGES
Principal Remaining
amount principal
exchanged for amount
definitive Debentures following
or converted into such exchange Notation made by or
Date Common Shares or conversion on behalf of the
made or redeemed or redemption Trustee
- -------- ----------------------- ------------- -------------------
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
........ ....................... ............ .................
85
EXHIBIT E
[Form of Certificate of Non-U.S. Ownership]
CERTIFICATE OF NON-U.S. OWNERSHIP
ATARI CORPORATION
5-1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
(the "Securities")
CEDEL S.A.
67 Boulevard Grande-Duchesse Charlotte
Luxembourg-Ville
Luxemboug l/
Morgan Guaranty Trust Company of
New York, Brussels Office
Operator of the Euro-clear System
Euro-clear Operations Centre
Rue de la Regence, 4
B-1000 Brussels, Belgium l/
This is to certify that, except as provided in the second
paragraph, none of the principal amount of the Securities
credited to you for our account is beneficially owned by U.S. persons or
persons who have purchased the Securities for resale to U.S. persons. We
undertake to advise you by telex if the above statement as to beneficial
ownership is not correct on any interest payment date occurring prior to the
Exchange Date (as defined in the Indenture dated as of April 29, 1987 between
Atari Corporation and Security Pacific National Bank, as Trustee) and also
immediately prior to the Exchange Date with respect to such of said Securities
as then appear in your books as being held for our account. We understand that
this certificate is required in connection with United States securities and
tax laws. We irrevocably authorize you to produce this certificate or a copy
hereof to any interest party in any administrative or legal proceedings with
respect to the matters covered by this certificate. "U.S. person", in this
Certificate, shall mean a citizen or resident of the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction (the "United States"),
a corporation, partnership or other entity
l/ Delete inappropriate reference.
86
2
created or organized in or under the laws of the United States, or an estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source.
This certificate excepts and does not relate to $ principal amount
of Securities credited to you for our account as to which we are not now able to
make the certification set forth above. We understand that definitive
certificates cannot be delivered and interest cannot be paid until we are able
to so certify, or to deliver Certificates of U.S. Institutional Investors, with
respect to such principal amount of Securities.
[We hereby request that the Trustee deliver Registered Securities in
the following denominations and registered in the following name(s) at the
corporate trust office of the Registrar in New York City.
Denominations:
----------------------------------------
Name of Registered Owner:
-----------------------------
Registered Owner's Address:
---------------------------
]2/
----------------------------------------------------
[Name]
Dated: 3/
By:
----------------------------------
Signature
as, or as agent for, the beneficial
owner(s) of the Security or Securities
to which this certificate relates.
- ------------------------
2/ To be inserted only if Registered Securities are requested.
3/ Not prior to 15 days before the earlier of the Exchange Date or the first
interest payment date occurring prior to the Exchange Date.
87
EXHIBIT F
[Date)
PaineWebber International Capital Inc.
1 Finsbury Avenue
London EC2M 2PA
England
Atari Corporation
1196 Borregas Avenue
Sunnyvale, California 94088-3427
Re: $75,000,000 principal amount 5-1/4% Convertible Subordinated
Debentures Due 2002 (the "Securities") of Atari Corporation
(the "Issuer")
Dear Sirs:
In connection with our purchase of $ principal amount of
the Securities, we confirm that:
(1) We have received (a) the Offering Circular dated
April 7, 1987, relating to the Securities and (b) such other information as we
deem necessary in order to make our investment decision.
(2) We acknowledge that the distribution of the
Securities has not been registered under the Securities Act of 1933. As a
purchaser of the Securities in a private placement not registered under the
Securities Act of 1933, we represent that we are (a) a sophisticated
institutional investor and (b) an "accredited investor" within the meaning of
Regulation D under the Securities Act of 1933, and are purchasing such
Securities for our own account for investment and (subject, to the extent
necessary, to the disposition of our property being at all times within our
control) not with a view to any distribution or other disposition thereof, and
we are proceeding on the assumption that we must bear the economic risk of the
investment for an indefinite period since the Securities may not be sold except
as provided below.
(3) We agree that, if in the future we should decide to
dispose of any of the Securities (which we do not presently contemplate), we
will not offer, sell or deliver any such Securities, directly or indirectly,
unless:
(a) (i) the sale is of at least $50,000 principal
amount of Securities to an Eligible Purchaser (as
88
2
defined below), (ii) a letter to substantially the same effect as
paragraphs (1)(b), (2), (3), (4), (5) and (7) of this letter is
executed prior to such sale by such Eligible Purchaser and (iii) all
offers or solicitations in connection with such sale, whether directly
or through any agent acting on our behalf, are limited only to
Eligible Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever; or
(b) the Securities are sold pursuant to Rule 144 under
the Securities Act of 1933 by us after we have held them for not less
than three years, provided that we are not an "affiliate" of the
Issuer (as defined by such Rule 144) at the time of such sale and have
not been such an affiliate during the preceding three months; or
(c) the Securities are sold pursuant to a registration
statement in effect under the Securities Act of 1933, it being
understood that the Issuer shall have no obligation to us to effect
any such registration; or
(d) the Securities are sold in any other transaction that
is made in compliance with the Securities Act of 1933 and we
heretofore have furnished to the Issuer a satisfactory opinion to such
effect.
(4) The Securities that we have purchased, when issued in
definitive form, shall be issued in Registered form, as will any Securities
issued in exchange or substitution for or on registration of transfer of such
Securities. Such Securities (and, unless the Issuer shall otherwise agree on
the basis of an opinion of the nature set forth in paragraph (5) below, any
Securities so issued) shall bear the following legend:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 AND ACCORDINGLY MAY NOT BE OFFERED, SOLD OR
DELIVERED UNLESS SUCH OFFER, SALE OR DELIVERY IS EITHER REGISTERED
PURSUANT TO OR IS EXEMPT FROM REGISTRATION UNDER SAID ACT. THE
TRANSFER OR EXCHANGE OF THIS SECURITY IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN AN INVESTMENT LETTER FROM THE HOLDER TO THE
ISSUER INCLUDING THE RIGHT OF THE ISSUER TO REQUIRE AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER PRIOR TO ANY TRANSFER OR EXCHANGE
OF THIS SECURITY."
89
3
(5) In addition to the requirements of paragraph (3)(d)
above, we understand that, in connection with any proposed transfer of
Securities or exchange of Securities for Securities of other authorized
denominations, an opinion of counsel experienced in giving opinions with
respect to questions relating to the securities laws of the United States may
be required to the effect that such transfer or exchange will be in compliance
with the Securities Act of 1933.
(6) We request that the definitive Securities we have
purchased be registered [in our name] [in the name of , our nominee,]
*/ and that such Securities be delivered to [insert address] by registered mail,
which delivery shall be for our sole risk and expense.
(7) As used in this letter, the term "United States"
means the United States of America (including the States and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction, and "Eligible Purchaser" means a corporation, partnership or
other entity which we have reasonable grounds to believe and do believe can
make representations with respect to itself to the effect set forth in
paragraphs (1)(b) and (2) of this letter.
Very truly yours,
[Name of U.S. Institutional
Investor]
By:
------------------------------
Authorized Signature
- --------------------
*/ Delete inappropriate reference.
90
EXHIBIT G
[Form of Certificate of U.S. Institutional Investor]
CERTIFICATE OF U.S. INSTITUTION INVESTOR
ATARI CORPORATION
5-1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
(the "Securities")
CEDEL S.A.
67 Boulevard Grande-Duchesse Charlotte
Luxembourg-Ville
Luxembourg 1/
Morgan Guaranty Trust Company of
New York, Brussels Office
Operator of the Euro-clear System
Euro-clear Operations Centre
Rue de le Regence, 4
B-1000 Brussels, Belgium l/
This certificate is delivered in connection with the Securities
credited to you for our account. This is to certify that (i) we have received
from (name of U.S. Institutional Investor] a letter in the form required by the
Indenture under which the Securities are issued, to the effect that it is
purchasing for its own account for investment and without a view to any
distribution or other disposition, $ principal amount of the Securities
credited to you for our account and agreeing to certain restrictions on any
disposition of such Securities, (ii) one of our registered broker-dealer
affiliates offered Securities for sale to such investor and (iii) we and our
affiliate believe that such investor has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investment and we and our affiliate believes that such investor
(and any account or accounts as to which such investor exercises investment
discretion and for which such investor may be purchasing Securities) is able to
bear the economic risk of investment in the Securities.
We understand that this certificate is required in connection
with United States law. We irrevocably authorize
- --------------------
1/ Delete inappropriate reference.
91
2
you to produce this certificate or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered by this certificate.
The definitive Securities to be issued in respect of this
certificate are to be issued in registered form and shall bear the following
legend:
"A REGISTRATION STATEMENT FOR THIS SECURITY HAS NOT YET BEEN
DECLARED EFFECTIVE UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND
ACCORDINGLY THIS SECURITY MAY NOT BE OFFERED, SOLD OR DELIVERED UNLESS SUCH
OFFER, SALE OR DELIVERY IS EITHER REGISTERED PURSUANT TO OR IS EXEMPT FROM
REGISTRATION UNDER SAID ACT. THE TRANSFER OR EXCHANGE OF THIS SECURITY IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN AN INVESTMENT LETTER FROM THE
HOLDER TO ATARI CORPORATION INCLUDING THE RIGHT OF ATARI CORPORATION TO REQUIRE
AN OPINION OF COUNSEL SATISFACTORY TO ATARI CORPORATION PRIOR TO ANY TRANSFER
OR EXCHANGE OF THIS SECURITY BEFORE THE EFFECTIVENESS OF REGISTRATION OF THE
SECURITIES ACT OF 1933."
We request that the Trustee deliver Registered Securities in the
following denominations and registered in the following names to the
undersigned at the corporate trust office of the Registrar in New York, New
York:
Registered
Registered Owner's
Registered Registered Owner's Taxpayer
Denomination Owner Address I.D. Number
- ------------ ---------- ---------- -----------
PaineWebber International Capital Inc.
Dated: 2/
By
----------------------------------
Signature
- --------------------
2/ Not prior to the date established for exchange of the Global
Security for Registered Securities for the account of U.S. Institutional
Investors.
92
EXHIBIT H-1
[Form of Clearance System Certificate For Exchange for
Bearer Security]
CLEARANCE SYSTEM CERTIFICATE
ATARI CORPORATION
5-1/4% Convertible Subordinated Debentures Due 2002
We refer to that portion, U.S. $ principal
amount, of the Global Security representing the above issue that is submitted
to be exchanged for Bearer Securities (the "Submitted Portion"). This is to
certify (i) that we have received from each of the persons appearing in our
records as being entitled to a beneficial interest in the Submitted Portion a
certificate of non-U.S. ownership with respect to such person's beneficial
interest in the form attached to this Certificate and (ii) that the Submitted
Portion includes no part of the Global Security which was excepted in such a
certificate of non-U.S. ownership.
We further notify that as of the date hereof we have not
received any notification from any of the persons giving such certificates to
the effect that the statements made by them with respect to any part of the
Submitted Portion are no longer true and cannot be relied on.
Dated: 1/
[CEDEL S.A.] [Morgan Guaranty Trust
Company of New York, Brussels Office, as
Operator of the Euro-clear System] 2/
By
-------------------------------
- --------------------
1/ Not prior to the Exchange Date.
2/ Delete inappropriate reference.
93
EXHIBIT H-2
[Form of Clearance System Certificate For Exchange
for Registered Security]
CLEARANCE SYSTEM CERTIFICATE
ATARI CORPORATION
5-1/4% Convertible Subordinated Debentures Due 2002
We refer to that portion, U.S. $ principal amount,
of the Global Security representing the above issue which is submitted to be
exchanged for Registered Securities (the "Submitted Portion"). This is to
certify that we have received from each of the persons appearing in our records
as being entitled to a beneficial interest in the Submitted Portion either (a)
a certificate of U.S. Institutional Investor with respect to such person's
beneficial interest in the form attached to this Certificate or (b) a
certificate of non-U.S. ownership with respect to such person's beneficial
interest in the form attached to this Certificate.
We hereby request that you deliver to the corporate trust
office of the Registrar in New York City Registered Securities in the
denominations and registered in the names appearing on the attached
certificates of U.S. Institutional Investor and certificates of non-U.S.
ownership.
We further certify that as of the date hereof we have not
received any notification from any of the persons giving such certificates to
the effect that the statements made by them with respect to any part of the
Submitted Portion are no longer true and cannot be relied on.
Dated: 1/
[CEDEL S.A.] [Morgan Guaranty Trust
Company of New York, Brussels Office, as
Operator of the Euro-clear System] 2/
By
-------------------------------------
- --------------------
1/ Not prior to the Exchange Date.
2/ Delete inappropriate reference.
94
EXHIBIT H-3
[Form of Clearance System Certificate
For Payment of Interest Prior to Exchange Date]
CLEARANCE SYSTEM CERTIFICATE
ATARI CORPORATION
5-1/4% Convertible Subordinated Debentures Due 2002
We refer to that portion, U.S. $ principal amount,
of the Global Security representing the above issue, the beneficial owners of
which have requested payment of the interest payment due on (the
"Submitted Portion"). This is to certify that we have received from each of the
persons appearing in our records as being entitled to a beneficial interest in
the Submitted Portion a certificate of non-U.S. ownership with respect to such
person's beneficial interest in the form attached to this Certificate.
We further certify that as of the date hereof we have not
received any notification from any of the persons giving such certificates to
the effect that the statements made by them with respect to any part of the
Submitted Portion are no longer true and cannot be relied on.
Dated: 1/
[CEDEL S.A.] [Morgan Guaranty Trust
Company of New York, Brussels Office, as
Operator of the Euro-clear System] 2/
By
-------------------------------------
- --------------------
1/ Not prior to the the relevant interest payment date.
2/ Delete inappropriate reference.