<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K/A
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the Fiscal year ended June 30, 1996.
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. For the transition period from to .
Commission File Number 1-10441
SILICON GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2789662
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2011 North Shoreline Boulevard, Mountain View, California 94043-1389
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (415) 960-1980
----------------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED:
------------------- ---------------------
Common Stock, $0.001 par value New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes__ X__ No_____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant, based upon the closing sale price of the
Common Stock on September 3, 1996 on the New York Stock Exchange as reported
in The Wall Street Journal, was approximately $3,726 million. Shares of
voting stock held by each executive officer and director and by each person
who owns 5% or more of any class of registrant's voting stock have been
excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive
determination for other purposes.
AS OF SEPTEMBER 3, 1996, THE REGISTRANT HAD OUTSTANDING
73,158,255 SHARES OF COMMON STOCK.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by reference to this
Form 10-K Report: (1) Proxy Statement for registrant's Annual Meeting of
Stockholders to be held October 30, 1996 (Part III), and (2) registrant's
Annual Report to Stockholders for the fiscal year ended June 30, 1996 (Parts
II and IV).
<PAGE>
Part IV, Item 14(a)(3) is hereby amended to include the following exhibits:
EXHIBITS
--------
4.5 Indenture dated February 1, 1986 between Cray Research, Inc. and
Manufacturers Hanover Trust Company, as Trustee.
4.6 First Supplemental Indenture dated June 30, 1996 between the
Company, Cray Research, Inc., and Chemical Bank (formerly
Manufacturers Hanover Trust Company).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SILICON GRAPHICS, INC.
By: /S/ William M. Kelly
--------------------------------
William M. Kelly, Senior Vice President,
General Counsel and Secretary
Dated: December 6, 1996
<PAGE>
EXHIBIT 4.5
[EXECUTION COPY]
============================================================
CRAY RESEARCH, INC.
and
MANUFACTURERS HANOVER TRUST COMPANY
Trustee
-----------
INDENTURE
Dated as of February 1, 1986
-----------
6 1/8% Convertible Subordinated Debentures Due 2011
============================================================
<PAGE>
TIE-SHEET*
of provisions of Trust Indenture Act of 1939 with Indenture dated as of February
l, 1986 between Cray Research, Inc. and Manufacturers Hanover Trust Company,
Trustee:
Section of Act Section of Indenture
-------------- --------------------
310(a)(1) and (2). . . . . . . . . . . . . . . . . . . 8.09
310(a)(3) and (4). . . . . . . . . . . . . . . . . . . Not applicable
310(b) . . . . . . . . . . . . . . . . . . . . . . . . 8.08 and 8.10(b)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
311(a) and (b) . . . . . . . . . . . . . . . . . . . . 8.13
311(c) . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . 6.01 and 6.02(a)
312(b) and (c) . . . . . . . . . . . . . . . . . . . . 6.02(b) and (c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . 6.04(a)
313(b)(1). . . . . . . . . . . . . . . . . . . . . . . Not applicable
313(b)(2) . . . . . . . . . . . . . . . . . . . . . . 6.04(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . 6.04(c)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . 6.04(d)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . 6.03
314(b) . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(c)(1) and (2). . . . . . . . . . . . . . . . . . . 16.05
314(c)(3). . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(d) . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . 16.05
314(f) . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
315(a), (c) and (d). . . . . . . . . . . . . . . . . . 8.01
315(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.08
315(e) . . . . . . . . . . . . . . . . . . . . . . . . 7.09
316(a)(1). . . . . . . . . . . . . . . . . . . . . . . 7.01 and 7.07
316(a) last sentence . . . . . . . . . . . . . . . . . 9.04
316(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.04
317(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.02
317(b) . . . . . . . . . . . . . . . . . . . . . . . . 5.04(a)
318(a) . . . . . . . . . . . . . . . . . . . . . . . . 16.07
- ---------------------
*This tie-sheet is not part of the Indenture as executed.
<PAGE>
TABLE OF CONTENTS*
Page
----
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purpose of Indenture. . . . . . . . . . . . . . . . . . . . . . . . 1
Form of Face of Debenture . . . . . . . . . . . . . . . . . . . . . 1
Form of Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . 3
Form of Reverse of Debenture. . . . . . . . . . . . . . . . . . . . 3
Form of Conversion Notice . . . . . . . . . . . . . . . . . . . . . 8
Compliance with Legal Requirements. . . . . . . . . . . . . . . . . 10
ARTICLE ONE
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . 10
Board of Directors . . . . . . . . . . . . . . . . 10
Common Stock . . . . . . . . . . . . . . . . . . . 11
Company. . . . . . . . . . . . . . . . . . . . . . 11
Conversion Price . . . . . . . . . . . . . . . . . 11
Debenture or Debentures;
Outstanding . . . . . . . . . . . . . . . . . . 11
Debentureholder. . . . . . . . . . . . . . . . . . 12
Event of Default . . . . . . . . . . . . . . . . . 12
Indenture. . . . . . . . . . . . . . . . . . . . . 12
Officers' Certificate. . . . . . . . . . . . . . . 12
Opinion of Counsel . . . . . . . . . . . . . . . . 12
Person . . . . . . . . . . . . . . . . . . . . . . 13
Predecessor Debenture. . . . . . . . . . . . . . . 13
Principal Office of the Trustee. . . . . . . . . . 13
Responsible Officer. . . . . . . . . . . . . . . . 13
Senior Indebtedness. . . . . . . . . . . . . . . . 13
Trust Indenture Act of 1939. . . . . . . . . . . . 14
Trustee. . . . . . . . . . . . . . . . . . . . . . 14
- ---------------------------
*This table of contents shall not, for any purpose, be deemed to be a part of
the Indenture.
-i-
<PAGE>
Page
----
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF DEBENTURES
SECTION 2.01 Designation, Amount and Issue of
Debentures . . . . . . . . . . . . . . . . . . . . . 14
2.02 Form of Debentures. . . . . . . . . . . . . . . . . . . 15
2.03 Date and Denomination of Debentures . . . . . . . . . . 15
2.04 Execution of Debentures . . . . . . . . . . . . . . . . 17
2.05 Exchange and Registration of
Transfer of Debentures . . . . . . . . . . . . . . . 18
2.06 Mutilated, Destroyed, Lost or
Stolen Debentures. . . . . . . . . . . . . . . . . . 19
2.07 Temporary Debentures. . . . . . . . . . . . . . . . . . 20
2.08 Cancellation of Debentures Paid, etc. . . . . . . . . . 21
ARTICLE THREE
REDEMPTION OF DEBENTURES - SINKING FUND
SECTION 3.01 Redemption Prices - Voluntary and
for Sinking Fund . . . . . . . . . . . . . . . . . . 21
3.02 Notice of Redemption; Selection of
Debentures . . . . . . . . . . . . . . . . . . . . . 22
3.03 Payment of Debentures Called for
Redemption . . . . . . . . . . . . . . . . . . . . . 23
3.O4 Mandatory and Optional Sinking Fund . . . . . . . . . . 24
3.05 Conversion Arrangement on
Call for Redemption. . . . . . . . . . . . . . . . . 28
ARTICLE FOUR
SUBORDINATION OF DEBENTURES
SECTION 4.01 Agreement of Subordination. . . . . . . . . . . . . . . 29
4.02 Payments to Debentureholders. . . . . . . . . . . . . . 29
4.03 Subrogation of Debentures.. . . . . . . . . . . . . . . 31
4.04 Authorization by Debentureholders . . . . . . . . . . . 32
4.05 Notice to Trustee . . . . . . . . . . . . . . . . . . . 32
4.06 Trustee's Relation to Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . 34
4.07 No Impairment of Subordination. . . . . . . . . . . . . 34
-ii-
<PAGE>
Page
----
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01 Payment of Principal, Premium and
Interest . . . . . . . . . . . . . . . . . . . . . . 34
5.02 Offices for Notices and Payments,
etc. . . . . . . . . . . . . . . . . . . . . . . . . 35
5.03 Appointments to Fill Vacancies
in Trustee's Office. . . . . . . . . . . . . . . . . 35
5.04 Provision as to Paying Agent. . . . . . . . . . . . . . 35
ARTICLE SIX
DEBENTUREHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 6.01 Debentureholders' Lists . . . . . . . . . . . . . . . . 37
6.02 Preservation and Disclosure of Lists. . . . . . . . . . 37
6.03 Reports by the Company. . . . . . . . . . . . . . . . . 39
6.04 Reports by the Trustee. . . . . . . . . . . . . . . . . 39
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON THE EVENT OF DEFAULT
SECTION 7.01 Events of Default . . . . . . . . . . . . . . . . . . . 41
7.02 Payment of Debentures on Default;
Suit Therefor. . . . . . . . . . . . . . . . . . . . 43
7.03 Application of Monies Collected
by Trustee . . . . . . . . . . . . . . . . . . . . . 46
7.04 Proceedings by Debentureholder. . . . . . . . . . . . . 47
7.05 Proceedings by Trustee. . . . . . . . . . . . . . . . . 48
7.06 Remedies Cumulative and Continuing. . . . . . . . . . . 48
7.07 Direction of Proceedings and Waiver
of Defaults by Majority
Debentureholders . . . . . . . . . . . . . . . . . . 48
7.08 Notice of Defaults. . . . . . . . . . . . . . . . . . . 49
7.09 Undertaking to Pay Costs. . . . . . . . . . . . . . . . 50
ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01 Duties and Responsibilities of
Trustee. . . . . . . . . . . . . . . . . . . . . . . 50
8.02 Reliance on Documents, Opinions, etc. . . . . . . . . . 52
8.03 No Responsibility for Recitals, etc . . . . . . . . . . 53
-iii-
<PAGE>
Page
----
8.04 Trustee, Paying Agents, Conversion
Agents or Registrar May Own
Debentures . . . . . . . . . . . . . . . . . . . . . 53
8.05 Monies to be Held in Trust. . . . . . . . . . . . . . . 54
8.06 Compensation and Expenses of
Trustee. . . . . . . . . . . . . . . . . . . . . . . 54
8.07 Officers' Certificate as Evidence . . . . . . . . . . . 54
8.08 Conflicting Interest of Trustee.. . . . . . . . . . . . 55
8.09 Eligibility of Trustee. . . . . . . . . . . . . . . . . 61
8.10 Resignation or Removal of Trustee . . . . . . . . . . . 62
8.11 Acceptance by Successor Trustee . . . . . . . . . . . . 63
8.12 Succession by Merger, etc . . . . . . . . . . . . . . . 64
8.13 Limitation on Rights of Trustee as
a Creditor . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE NINE
CONCERNING THE DEBENTUREHOLDERS
SECTION 9.01 Action by Debentureholders. . . . . . . . . . . . . . . 70
9.02 Proof of Execution by
Debentureholders . . . . . . . . . . . . . . . . . . 70
9.03 Who Are Deemed Absolute Owners. . . . . . . . . . . . . 70
9.04 Company-Owned Debentures Disregarded. . . . . . . . . . 71
9.05 Revocation of Consents; Future
Holders Bound. . . . . . . . . . . . . . . . . . . . 71
ARTICLE TEN
DEBENTUREHOLDERS' MEETINGS
SECTION 10.01 Purposes of Meetings. . . . . . . . . . . . . . . . . . 72
10.02 Call of Meetings by Trustee . . . . . . . . . . . . . . 72
10.03 Call of Meetings by Company or
Debentureholders . . . . . . . . . . . . . . . . . . 73
10.04 Qualifications for Voting . . . . . . . . . . . . . . . 73
10.05 Regulations . . . . . . . . . . . . . . . . . . . . . . 73
10.06 Voting. . . . . . . . . . . . . . . . . . . . . . . . . 74
10.07 No Delay of Rights by Meeting . . . . . . . . . . . . . 75
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01 Supplemental Indentures without
Consent of Debentureholders. . . . . . . . . . . . . 75
11.02 Supplemental Indentures with Consent
of Debentureholders. . . . . . . . . . . . . . . . . 76
-iv-
<PAGE>
Page
----
11.03 Compliance with Trust Indenture Act;
Effect of Supplemental Indentures. . . . . . . . . . 77
11.04 Notation on Debentures. . . . . . . . . . . . . . . . . 78
11.05 Evidence of Compliance of Supple-
mental Indenture to be Furnished
Trustee. . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01 Company May Consolidate, etc., on
Certain Terms. . . . . . . . . . . . . . . . . . . . 78
12.02 Successor Corporation to be
Substituted. . . . . . . . . . . . . . . . . . . . . 79
12.03 Opinion of Counsel to be Given
Trustee. . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01 Discharge of Indenture. . . . . . . . . . . . . . . . . 80
13.02 Deposited Monies to be Held in Trust
by Trustee . . . . . . . . . . . . . . . . . . . . . 81
13.03 Paying Agent to Repay Monies Held . . . . . . . . . . . 81
13.04 Return of Unclaimed Monies. . . . . . . . . . . . . . . 81
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01 Indenture and Debentures Solely
Corporate Obligations. . . . . . . . . . . . . . . . 81
ARTICLE FIFTEEN
CONVERSION OF DEBENTURES
SECTION 15.01 Rights to Convert . . . . . . . . . . . . . . . . . . . 82
15.02 Exercise of Conversion Privilege;
Issuance of Common Stock on
Conversion; No Adjustment for
Interest or Dividends. . . . . . . . . . . . . . . . 82
15.03 Cash Payments in Lieu of Fractional
Shares . . . . . . . . . . . . . . . . . . . . . . . 84
-v-
<PAGE>
Page
----
15.04 Conversion Price. . . . . . . . . . . . . . . . . . . . 84
15.05 Adjustment of Conversion Price. . . . . . . . . . . . . 84
15.06 Effect of Reclassification, Consoli-
dation, Merger or Sale . . . . . . . . . . . . . . . 88
15.07 Taxes on Shares Issued. . . . . . . . . . . . . . . . . 89
15.08 Reservation of Shares; Shares to be
Fully Paid; Compliance with
Governmental Requirements; Listing
of Common Stock. . . . . . . . . . . . . . . . . . . 89
15.09 Responsibility of Trustee . . . . . . . . . . . . . . . 90
15.10 Notice to Holders Prior to Certain
Actions. . . . . . . . . . . . . . . . . . . . . . . 91
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 16.01 Provisions Binding on Company's
Successors . . . . . . . . . . . . . . . . . . . . . 92
16.02 Official Acts by Successor
Corporation. . . . . . . . . . . . . . . . . . . . . 92
16.03 Addresses for Notices, etc. . . . . . . . . . . . . . . 92
16.04 Governing Law . . . . . . . . . . . . . . . . . . . . . 92
16.05 Evidence of Compliance with
Conditions Precedent;
Certificates to Trustee. . . . . . . . . . . . . . . 92
16.06 Legal Holidays. . . . . . . . . . . . . . . . . . . . . 93
16.07 Trust Indenture Act to Control. . . . . . . . . . . . . 93
16.08 No Security Interest Created. . . . . . . . . . . . . . 93
16.09 Benefits of Indenture . . . . . . . . . . . . . . . . . 93
16.10 Table of Contents, Headings, etc. . . . . . . . . . . . 94
16.11 Execution in Counterparts . . . . . . . . . . . . . . . 94
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . 96
-vi-
<PAGE>
INDENTURE dated as of February 1, 1986 between CRAY RESEARCH, INC., a
Delaware corporation (hereinafter sometimes called the "Company"), and
MANUFACTURERS HANOVER TRUST COMPANY, a corporation organized and existing under
the laws of the State of New York (hereinafter sometimes called the "Trustee").
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 6 1/8% Convertible Subordinated Debentures Due 2011
(hereinafter sometimes called the "Debentures"), in an aggregate principal
amount not to exceed $115,000,000 and, to provide the terms and conditions upon
which the Debentures are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures and a form of conversion notice are to be substantially in the
following forms, respectively:
[FORM OF FACE OF DEBENTURE]
No. $
CRAY RESEARCH, INC.
6 1/8% Convertible Subordinated Debenture Due 2011
CRAY RESEARCH, INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company"), for value
received, hereby promises to pay to ____________________, or registered assigns,
the principal sum of ________ Dollars on February 1, 2011 at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually on February 1 and August 1 of
each year, commencing August 1, 1986, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum specified in the title
of this Debenture, from the February 1 or the August 1, as the case may be, next
preceding the date of this Debenture to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Debenture, or unless
no inter-
<PAGE>
est has been paid or duly provided for on the Debentures, in which case from
February 20, 1986, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
January 15 or July 15, as the case may be, and before the following February
1 or August 1, this Debenture shall bear interest from such February 1 or
August 1; PROVIDED, HOWEVER, that if the Company shall default in the payment
of interest due on such February 1 or August 1, then this Debenture shall
bear interest from the next preceding February 1 or August 1 to which
interest has been paid or duly provided for or, if no interest has been paid
or duly provided for on the Debentures, from February 20, 1986. The interest
so payable on any February 1 or August 1 will be paid to the person in whose
name this Debenture (or one or more Predecessor Debentures) is registered at
the close of business on the record date, which shall be the January 15 or
July 15 (whether or not a business day) next preceding such February 1 or
August 1, provided that any such interest not punctually paid or duly
provided for shall be payable as provided in the Indenture. Interest may, at
the option of the Company, be paid by check mailed to the registered address
of such person.
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof, including, without limitation, provisions
subordinating the payment of principal of and premium, if any, and interest on
the Debentures to the prior payment in full of all Senior Indebtedness as
defined in the Indenture and provisions giving the holder of this Debenture the
right to convert this Debenture into Common Stock of the Company on the terms
and subject to the limitations referred to on the reverse hereof and as more
fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee under the Indenture.
-2-
<PAGE>
IN WITNESS WHEREOF, CRAY RESEARCH, INC. has caused this instrument to
be duly executed.
CRAY RESEARCH, INC.
Dated: By ___________________________
Chairman of the Board,
President and
Chief Executive Officer
Attest:
_______________________
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned
Indenture.
MANUFACTURERS HANOVER TRUST COMPANY
As Trustee
By ________________________________
Authorized Officer
(FORM OF REVERSE OF DEBENTURE]
CRAY RESEARCH, INC.
6 1/8% Convertible Subordinated Debenture Due 2011
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 6 1/8% Convertible Subordinated Debentures Due 2011
(herein called the "Debentures"), limited to the aggregate principal amount of
$115,000,000, all issued or to be issued under and pursuant to an Indenture
dated as of February 1, 1986 (herein called the "Indenture"), between the
Company and Manufacturers Hanover Trust Company (herein called the "Trustee"),
to which Indenture
-3-
<PAGE>
and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all Debentures may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the Debentures at the time outstanding, evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or modifying in any manner the rights of the
holders of the Debentures; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of any Debenture, or reduce the
rate or extend the time of payment of interest thereon, or reduce the principal
amount thereof or any premium thereon, or make the principal thereof or any
premium or interest thereon payable in any coin or currency other than that
hereinbefore provided, or impair or affect the rights of any Debentureholder to
institute suit for the payment or conversion thereof or impair the right to
convert the Debentures into Common Stock subject to the terms set forth in the
Indenture, including Section 15.06, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Debentures then outstanding. It is
also provided in the Indenture that, prior to any declaration accelerating the
maturity of the Debentures, the holders of a majority in aggregate principal
amount of the Debentures at the time outstanding may on behalf of the holders of
all of the Debentures waive any past default or Event of Default under the
Indenture and its consequences except a default in the payment of interest or
any premium on or the principal of any of the Debentures or a failure by the
Company to convert any Debentures into Common Stock of the Company. Any such
consent or waiver by the holder of this Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Debenture and any Debentures which may be
issued in exchange or substitution herefor, irrespective of whether or not any
-4-
<PAGE>
notation thereof is made upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company as defined in the Indenture, whether outstanding at the date of the
Indenture or thereafter incurred, and this Debenture is issued subject to the
provisions of the Indenture with respect to such subordination. Each holder of
this Debenture, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee his attorney in fact for such purpose.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Debenture at the place, at the respective times, at
the rate and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a year of
twelve 30-day months.
The Debentures are issuable in registered form without coupons in
denominations of $l,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, but without payment of any
service charge, Debentures may be exchanged for a like aggregate principal
amount of Debentures of other authorized denominations.
The Debentures may be redeemed at the option of the Company as a
whole, or from time to time in part, on any date prior to maturity, upon mailing
a notice of such redemption not less than thirty nor more than sixty days before
the date fixed for redemption to the holders of Debentures at their last
registered addresses, all as provided in the Indenture, at the following
optional redemption prices (expressed as percentages of the principal amount),
together in each case with accrued interest to the date fixed for redemption:
If redeemed during the twelve-month period beginning February 1:
-5-
<PAGE>
Year Percentage Year Percentage
- ---- ---------- ---- ----------
1986 106.1250% 1991 103.0625%
1987 105.5125 1992 102.4500
1988 104.9000 1993 101.8375
1989 104.2875 1994 101.2250
1990 103.6750 1995 100.6125
and 100% if redeemed on or after February 1, 1996; PROVIDED that if the date
fixed for redemption is a February 1 or August 1, then the interest payable on
such date shall be paid to the holder of record on the text preceding January 15
or July 15; and PROVIDED FURTHER, that no such redemption shall be effected
prior to February 1, 1988 unless the last reported sales prices (determined as
provided in the Indenture) of the Company's Common Stock, as defined in the
Indenture, equals or exceeds 150% of the then effective conversion price
(determined as provided in the Indenture) for at least twenty Trading Days, as
defined in the Indenture, within a period of thirty consecutive Trading Days
ending within five days of the date the notice of redemption is first mailed.
The Debentures are also subject to redemption in part, through the
operation of the sinking fund provided for in the Indenture, on February 1, 1997
and on each February 1 thereafter to and including February 1, 2010, on notice
as set forth above, at 100% of the principal amount thereof, together with
accrued interest to the date fixed for redemption.
Subject to the provisions of the Indenture, the holder hereof has the
right, at his option, at any time prior to the close of business on February 1,
2011, or, as to all or any portion hereof called for redemption, the date fixed
for redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal which
is $1,000 or an integral multiple thereof, into that number of fully paid and
nonassessable shares of the Company's Common Stock, as said shares shall be
constituted at the date of conversion, obtained by dividing the principal amount
of this Debenture or portion thereof to be converted by the conversion price of
$84.00 or such conversion price as adjusted from time to time as provided in the
Indenture, upon surrender of this Debenture, together with a conversion notice
as provided in the Indenture, to the Company at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, and, unless the shares issuable on conversion are to be issued in the same
name as this Debenture, duly endorsed by, or accompanied by instruments of
transfer in form satisfactory to the Company duly
-6-
<PAGE>
executed by, the holder or by his duly authorized attorney. No adjustments in
respect of interest or dividends will be made upon any conversion; PROVIDED,
HOWEVER, that if this Debenture shall be surrendered for conversion during the
period from the close of business on any record date for the payment of interest
to the opening of business on the following interest payment date, this
Debenture (unless it or the portion being converted shall have been called for
redemption on a date in such period) must be accompanied by an amount, in New
York Clearing House funds or other funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted. No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of any
Debenture or Debentures for conversion.
Any Debentures called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed for redemption,
may be deemed to be purchased from the holder of such Debentures at an amount
not less than the applicable redemption price, together with accrued interest to
the date fixed for redemption, by one or more investment bankers or other
purchasers who may agree with the Company to purchase such Debentures from the
holders thereof and convert them into Common Stock of the Company and to make
payment for such Debentures as aforesaid to the Trustee in trust for such
holders.
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company in the Borough of Manhattan, The City of New
York, a new Debenture or Debentures of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange herefor,
subject to the limitations provided in the Indenture, without charge except for
any tax or other governmental charge imposed in connection therewith.
The Company, the Trustee, any paying agent, any conversion agent and
any Debenture registrar may deem and treat the registered holder hereof as the
absolute owner of this Debenture (whether or not this Debenture shall be overdue
and notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Company or any Debenture registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
paying agent nor any other conversion agent nor any Debenture registrar shall be
affected by any notice to the contrary. All
-7-
<PAGE>
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable an this Debenture.
No recourse for the payment of the principal of or any premium or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule
of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Cray Research, Inc.
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Cray Research, Inc. in accordance with the terms of the Indenture
referred to in this Debenture, and directs that the shares issuable and
deliverable upon the conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto. Any amount required to be paid by the
undersigned on account of interest accompanies this Debenture.
-8-
<PAGE>
Dated: _______________________________
_______________________________
Signature(s)
Fill in for registration of
shares if to be delivered
other than to and in the
name of the registered holder:
______________________________
(Name)
______________________________
(Street Address)
______________________________
(City, State and zip code)
Please print name and address
Principal amount to be converted
(if less than all):
$ ____ ,000
_________________________________
Social Security or Other
Taxpayer Identification Number
-9-
<PAGE>
AND WHEREAS, all acts and things necessary to make the Debentures,
when executed by the Company and authenticated and delivered by the Trustee, as
in this Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute these presents a valid agreement according to its
terms, have been done and performed, and the execution of this Indenture and the
issue hereunder of the Debentures have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Debentures
by the holders thereof and of the sum of one dollar duly paid to it by the
Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective holders from time to time of the
Debentures (except as otherwise provided below), as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture which are defined in the Trust Indenture Act
of 1939 or which are by reference therein defined in the Securities Act of 1933
(except as herein otherwise expressly provided or unless the context otherwise
requires) shall have the meanings assigned to such terms in said Trust Indenture
Act and in said Securities Act as in force at the date of the execution of this
Indenture. The words "HEREIN", "HEREOF" and "HEREUNDER" and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision. The terms defined in this Article include the
plural as well as the singular.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board
of Directors of the Company or the Executive Committee of such Board.
-10-
<PAGE>
COMMON STOCK: The term "Common Stock" shall mean any stock of any
class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. Subject to the provisions of Section 15.06, however, shares
issuable on conversion of Debentures shall include only shares of the class
designated as Common Stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; PROVIDED that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
COMPANY: The term "Company" shall mean Cray Research, Inc., a Delaware
corporation, and subject to the provisions of Article Twelve, shall include its
successors and assigns.
CONVERSION PRICE: The term "conversion price" shall have the meaning
specified in Section 15.04.
DEBENTURE OR DEBENTURES; OUTSTANDING: The terms "Debenture" or
"Debentures" shall mean any Debenture or Debentures, as the case may be,
authenticated and delivered under this Indenture.
The term "outstanding" (except as otherwise provided in Section 8.08),
when used with reference to Debentures, shall, subject to the provisions of
Section 9.04, mean, as of any particular time, all Debentures authenticated and
delivered by the Trustee under this Indenture, except
(a) Debentures theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Debentures, or portions thereof, for the payment or redemption of
which monies in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company
shall act as
-11-
<PAGE>
its own paying agent), PROVIDED that if such Debentures are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been
given as in Article Three provided, or provision satisfactory to the
Trustee shall have been made for giving such notice;
(c) Debentures in lieu of or in substitution for which other
Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.06 unless proof satisfactory to the Trustee is presented
that any such Debentures are held by bona fide holders in due course; and
(d) Debentures converted into Common Stock pursuant to Article
Fifteen hereof and Debentures not deemed outstanding pursuant to Section
3.02.
DEBENTUREHOLDER: The terms "Debentureholder" or "holder of
Debentures", or other similar terms, shall mean any person in whose name at the
time a particular Debenture is registered on the books of the Company kept for
that purpose in accordance with the terms hereof.
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.01, continued for the period of time, if any, and after
the giving of the notice, if any, therein designated.
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended, or supplemented as herein provided, as so
amended or supplemented.
OFFICERS' CERTIFICATE: The term "Officers' Certificate", when used
with respect to the Company, shall mean a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Executive Officer or any Vice
President and by the Treasurer of the Company. Each such certificate shall
include the statements provided for in Section 16.05 if and to the extent
required by the provisions of such Section.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company, which counsel shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in Section 16.05 if and to the
extent required by the provisions of such Section.
-12-
<PAGE>
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, an organization, an individual, a government or a political
subdivision thereof or a governmental agency.
PREDECESSOR DEBENTURE: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.06 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
PRINCIPAL OFFICE OF THE TRUSTEE: The term "principal office of the
Trustee", or other similar term, shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office is, at the date as of which this Indenture is dated,
located at 600 Fifth Avenue, New York, New York 10020.
RESPONSIBLE OFFICER: The term "Responsible Officer", when used with
respect to the Trustee, shall mean any officer in the corporate trust division
of the Trustee, or any officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the particular
subject.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" shall mean the
principal of, premium, if any, interest on, and any other payment due pursuant
to any of the following, whether outstanding at the date hereof or hereafter
incurred or created:
(a) all indebtedness of the Company for money borrowed (including any
indebtedness secured by a mortgage or other lien which is (i) given to
secure all or part of the purchase price of property subject thereto,
whether given to the vendor of such property or to another or (ii) existing
on property at the time of acquisition thereof);
(b) all indebtedness of the Company evidenced by notes, debentures,
bonds or other securities sold by the Company for money;
-13-
<PAGE>
(c) all lease obligations of the Company which are capitalized on the
books of the Company in accordance with generally accepted accounting
principles;
(d) all indebtedness of others of the kinds described in either of
the preceding clauses (a) or (b) and all lease obligations of others of the
kind described in the preceding clause (c) assumed by or guaranteed in any
manner by the Company or in effect guaranteed by the Company through an
agreement to purchase, contingent or otherwise; and
(e) all renewals, extensions or refundings of indebtedness of the
kinds described in any of the preceding clauses (a), (b) and (d) and all
renewals or extensions of lease obligations of the kinds described in
either of the preceding clauses (c) and (d);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is subordinate to any other indebtedness
of the Company or that such indebtedness, lease, renewal, extension or refunding
is not superior in right of payment to the Debentures.
TRUST INDENTURE ACT OF 1939: The term "Trust Indenture Act of 1939"
shall mean the Trust Indenture Act of 1939 as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.03 and 15.06.
TRUSTEE: The term "Trustee" shall mean Manufacturers Hanover Trust
Company and, subject to the provisions of Article Eight hereof, shall also
include its successors and assigns as Trustee hereunder.
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
SECTION 2.01. DESIGNATION, AMOUNT AND ISSUE OF DEBENTURES. The
Debentures shall be designated as "6 1/8% Convertible Subordinated Debentures
Due 2011". Debentures not to exceed the aggregate principal amount of
$115,000,000 upon
-14-
<PAGE>
the execution of this Indenture, or from time to time thereafter, may be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Debentures to or upon the
written order of the Company, signed by its Chairman or its President or any
Vice President and by its Treasurer or Assistant Treasurer or its Secretary or
any Assistant Secretary, without any further action by the Company hereunder.
SECTION 2.02. FORM OF DEBENTURES. The Debentures and the Trustee's
certificate of authentication to be borne by the Debentures shall be
substantially in the form as in this Indenture above recited. Any of the
Debentures may have imprinted thereon such legends or endorsements as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Debentures may be listed, or to conform to usage.
SECTION 2.03. DATE AND DENOMINATION OF DEBENTURES. The Debentures
shall be issuable in registered form without coupons in denominations of $1,000
and any integral multiple of $1,000. Every Debenture shall be dated the date of
its authentication and, except as provided in this Section, shall bear interest,
payable semiannually on February 1 and August 1 of each year, commencing August
1, 1986, from the February 1 or August 1, as the case may be, next preceding the
date of such Debenture to which interest has been paid or duly provided for,
unless the date of such Debenture is the date to which interest has been paid or
duly provided for, in which case from the date of such Debenture, or unless no
interest has been paid or duly provided for on the Debentures, in which case
from February 20, 1986 until payment of the principal sum has been made or duly
provided for. Notwithstanding the foregoing, when there is no existing default
in the payment of interest on the Debentures, all Debentures authenticated by
the Trustee after the close of business on the record date (as hereinafter
defined) for any interest payment date and prior to such interest payment date
shall be dated the date of authentication but shall bear interest from such
interest payment date; PROVIDED, HOWEVER, that if and to the extent that the
Company shall default in interest due on such interest payment date then any
such Debenture shall bear interest from the February 1 or August 1, as the case
may be, next preceding the date of such Debenture to which interest has been
paid or duly provided for, unless no interest has been
-15-
<PAGE>
paid or duly provided for on the Debentures, in which case from February 20,
1986.
The person in whose name any Debenture (or its Predecessor Debenture)
is registered at the close of business on any record date with respect to any
interest payment date shall be entitled to receive the interest payable on such
interest payment date (subject to the provisions of Article Three in the case of
any Debenture or Debentures, or portion thereof, called for redemption on a date
subsequent to the record date and prior to such interest payment date)
notwithstanding the cancellation of such Debenture upon any conversion, transfer
or exchange subsequent to the record date and prior to such interest payment
date. Interest may, at the option of the Company, be paid by check mailed to
the address of such person on the registry kept for such purposes. The term
"record date" with respect to any interest payment date shall mean the January
15 or July 15 preceding said February 1 or August 1.
Interest on the Debentures shall be computed on the basis of a year of
twelve 30-day months.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any said February 1 or August 1 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Debentureholder
on the relevant record date by virtue of his having been such Debentureholder;
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
-16-
<PAGE>
Defaulted Interest as in this clause provided. Thereupon the Trustee shall
fix a special record date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid to each Debentureholder at his address as it
appears in the Debenture register, not less than 10 days prior to such
special record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered at
the close of business on such special record date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
SECTION 2.04. EXECUTION OF DEBENTURES. The Debentures shall be signed
in the name and on behalf of the Company by the facsimile signature of its
Chairman of the Board of Directors, its President, its Chief Executive Officer
or any of its Vice Presidents and attested by the facsimile signature of its
Secretary or any of its Assistant Secretaries (which may be printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise). Only such Debentures
as shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, manually executed by the Trustee, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate by the Trustee upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
-17-
<PAGE>
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company; and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
SECTION 2.05. EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES.
Debentures may be exchanged for a like aggregate principal amount of Debentures
of other authorized denominations. Debentures to be exchanged shall be
surrendered at any office or agency to be maintained by the Company pursuant to
Section 5.02 and the Company shall execute and register and the Trustee shall
authenticate and deliver in exchange therefor the Debenture or Debentures which
the Debentureholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding.
The Company shall cause to be kept at each such office or agency
maintained by the Company pursuant to Section 5.02, a register in which, subject
to such reasonable regulations as it may prescribe, Debentures shall be
registered and the transfer of Debentures shall be registered as in this Article
Two provided. Such register shall be in written form or in any other form
capable of being converted into written form within a reasonable time. At all
reasonable times such register shall be open for inspection by the Trustee.
Upon due presentment for registration of transfer of any Debenture at any such
office or agency maintained by the Company, the Company shall execute and
register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Debenture or Debentures for an equal aggregate
principal amount.
All Debentures presented for registration of transfer or for
exchange, redemption, conversion or payment shall (if so required by the
Company or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company
and the Trustee duly
-18-
<PAGE>
executed by, the holder or his attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.
The Company shall not be required to exchange or register a transfer
of (a) any Debentures for a period of 15 days next preceding any selection of
Debentures to be redeemed, (b) any Debentures or portions thereof selected or
called for redemption or (c) any Debentures or portion thereof surrendered for
conversion.
All Debentures issued upon any transfer or exchange of Debentures
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture as the Debentures surrendered
upon such exchange or transfer.
SECTION 2.06. MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES. In case
any temporary or definitive Debenture shall become mutilated or be destroyed,
lost or stolen, the Company in its discretion may execute, and upon its request
the Trustee shall authenticate and deliver, a new Debenture, bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case the applicant for a substituted
Debenture shall furnish to the Company and to the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and to the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
The Trustee may authenticate any such substituted Debenture and
deliver the same upon the receipt of such security or indemnity as the Trustee
may require. Upon the issuance of any substituted Debenture, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debenture which has matured or is about to mature or has
been called for redemption or is about to be converted into Common Stock shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debenture, pay
-19-
<PAGE>
or authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment or conversion shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless and, in case of destruction, loss or theft, evidence satisfactory
to the Company and the Trustee of the destruction, loss or theft of such
Debenture and of the ownership thereof.
Every substituted Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion of negotiable instruments or other securities without their
surrender.
SECTION 2.07. TEMPORARY DEBENTURES. Pending the preparation of
definitive Debentures, the Company may execute and the Trustee shall
authenticate and deliver temporary Debentures (printed or lithographed).
Temporary Debentures shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debentures but with such omissions,
insertions and variations as may be appropriate for temporary Debentures, all as
may be determined by the Company. Every such temporary Debenture shall be
executed by the Company and authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Debentures. Without unreasonable delay the Company will execute
and deliver to the Trustee definitive Debentures and thereupon any or all
temporary Debentures may be surrendered in exchange therefor, at each office or
agency maintained by the Company pursuant to Section 5.02, and the Trustee shall
authenticate and deliver in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures. Such exchange shall be
made by the Company at its own expense and without any charge therefor. Until so
-20-
<PAGE>
exchanged, the temporary Debentures shall in all respects be entitled to the
same benefits under this Indenture as definitive Debentures authenticated and
delivered hereunder.
SECTION 2.08. CANCELLATION OF DEBENTURES PAID, ETC. All Debentures
surrendered for the purpose of payment, redemption, conversion, exchange or
registration of transfer, or in discharge or for credit against any sinking fund
payment pursuant to Section 3.04, shall, if surrendered to the Company or any
paying agent or any Debenture registrar or any conversion agent, be surrendered
to the Trustee and promptly cancelled by it, or, if surrendered to the Trustee,
shall be promptly cancelled by it, and no Debentures shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy cancelled Debentures unless the Company
directs it to do otherwise and provide the Company with a certificate to such
effect. If the Company shall acquire any of the Debentures, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation.
ARTICLE THREE
REDEMPTION OF DEBENTURES - SINKING FUND
SECTION 3.01. REDEMPTION PRICES - VOLUNTARY AND FOR SINKING FUND. (a)
The Company may, at its option, redeem all or from time to time any part of the
Debentures on any date prior to maturity, upon notice as set forth in Section
3.02, and at the optional redemption prices set forth in the form of Debenture
hereinabove recited, together with accrued interest to the date fixed for
redemption, PROVIDED, HOWEVER, that no such redemption shall be effected before
February 1, 1988, unless the last reported sales prices (determined as provided
in Section 15.05(d)) of the Company's Common Stock equals or exceeds 150% of the
then effective conversion price for at least twenty Trading Days (as defined in
Section 15.05(d)) within a period of thirty consecutive Trading Days ending
within five days of the date the notice of redemption is first mailed pursuant
to Section 3.02. In the case of any redemption pursuant to this Section 3.01
prior to February 1, 1988, the Company will deliver to the Trustee at least 45
days before the date fixed for redemption an Officer's Certificate stating that
such redemption will comply with the provisions contained in the foregoing
sentence.
- 21 -
<PAGE>
(b) The Debentures shall also be redeemed in part on February 1, 1997
and on each February 1 thereafter to and including February 1, 2010, through the
operation of the sinking fund as set forth in Section 3.04, at the sinking fund
redemption price set forth in the form of Debenture hereinabove recited,
together with accrued interest to the date fixed for redemption.
SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBENTURES. In case
the Company shall desire to exercise the right to redeem all or, as the case may
be, any part of the Debentures pursuant to Section 3.01(a), it shall fix a date
for redemption and, in the case of any redemption pursuant to Section 3.01(a) or
(b), it or, at its request, the Trustee in the name of and at the expense of
the Company, shall mail or cause to be mailed a notice of such redemption at
least 30 and not more than 60 days prior to the date fixed for redemption to the
holders of Debentures so to be redeemed as a whole or in part at their last
addresses as the same appear on the registry books of the Company. Such mailing
shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Debenture designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the principal amount of
each Debenture to be redeemed, the date fixed for redemption, the redemption
price at which Debentures are to be redeemed, the place or places of payment,
that payment will be made upon presentation and surrender of such Debentures,
that such redemption is pursuant to the mandatory or optional sinking fund, or
both, if such be the case, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue. Such notice shall also state the current conversion price and the date
on which the right to convert such Debentures or portions thereof into Common
Stock will expire. If fewer than all the Debentures are to be redeemed, the
notice of redemption shall identify the Debentures to be redeemed. In case any
Debenture is to be redeemed in part only, the notice of redemption shall state
the portion of the principal amount thereof to be redeemed and shall state that
on and after the date fixed for redemption, upon surrender of such Debenture, a
new Debenture or Debentures in principal amount equal to the unredeemed portion
thereof will be issued.
-22-
<PAGE>
Prior to the redemption date specified in the notice of redemption
given as provided in this Section, the Company will deposit with the Trustee or
with one or more paying agents (or, if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 5.04) an
amount of money sufficient to redeem on the redemption date all the Debentures
so called for redemption (other than those theretofore surrendered for
conversion into Common Stock) at the appropriate redemption price, together with
accrued interest to the date fixed for redemption. If any Debenture called for
redemption is converted pursuant hereto, any money deposited with the Trustee or
any paying agent or so segregated and held in trust for the redemption of such
Debenture shall be paid to the Company upon its request, or, if then held by the
Company shall be discharged from such trust. If fewer than all the Debentures
are to be redeemed, the Company will give the Trustee written notice not fewer
than 60 days prior to the redemption date as to the aggregate principal amount
of Debentures to be redeemed.
If fewer than all the Debentures are to be redeemed, the Trustee shall
select, on a pro rata basis or by lot, the Debentures or portions thereof (in
integral multiples of $1,000) to be redeemed. If any Debenture selected for
partial redemption is converted in part after such selection, the converted
portion of such Debenture shall be deemed (so far as may be) to be the portion
to be selected for redemption. The Debentures (or portions thereof) so selected
shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Debenture is converted as a whole or in part
before the mailing of the notice of redemption.
Upon any redemption of less than all Debentures, the Company and the
Trustee may treat as outstanding any Debentures surrendered for conversion
during the period of 15 days next preceding the mailing of a notice of
redemption and need not treat as outstanding any Debenture authenticated and
delivered during such period in exchange for the unconverted portion of any
Debenture converted in part during such period.
SECTION 3.03. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION. If notice
of redemption has been given as above provided, the Debentures or portions of
Debentures with respect to which such notice has been given shall, unless
theretofore converted into Common Stock pursuant to the terms hereof, become due
and payable on the date and at the place or places stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for
-23-
<PAGE>
redemption, and on and after said date (unless the Company shall default in the
payment of such Debentures at the redemption price, together with interest
accrued to said date) interest on the Debentures or portions of Debentures so
called for redemption shall cease to accrue and, except as provided in Sections
8.05 and 13.04, such Debentures shall cease from and after the date fixed for
redemption to be convertible into Common Stock and to be entitled to any benefit
or security under this Indenture, and the holders thereof shall have no right in
respect of such Debentures except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Debentures at a place of payment in said notice specified,
the said Debentures or the specified portions thereof shall be paid and redeemed
by the Company at the applicable redemption price, together with interest
accrued thereon to the date fixed for redemption; PROVIDED that any semi-annual
payment of interest becoming due on the date fixed for redemption shall be
payable to the holders of such Debentures registered as such on the relevant
record date subject to the terms and provisions of Section 2.03 hereof.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of optional redemption during the continuance of a
default in payment of interest or premium on the Debentures or of any Event of
Default. If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Debenture and such Debenture shall remain
convertible into Common Stock until the principal and premium, if any, shall
have been paid or duly provided for.
SECTION 3.04. MANDATORY AND OPTIONAL SINKING FUND. As and for a
mandatory sinking fund (the "sinking fund") for the retirement of Debentures and
so long as any of the Debentures remain outstanding and unpaid, the Company
will, except as hereinafter provided, pay to the Trustee in cash not less than
one business day before February 1, 1997 and before February 1 in each year
thereafter to and including February 1, 2010, an amount sufficient to redeem on
such February 1 an
-24-
<PAGE>
aggregate principal amount of Debentures equal to five percent (5%) of the
aggregate principal amount of Debentures issued as provided in Section 2.01, at
the sinking fund redemption price, together with accrued interest to the date
fixed for redemption (the "sinking fund payment"). The last date on which such
payment may be made in each year is herein referred to as the "sinking fund
payment date".
The Company may in any year, beginning with the year 1997, on or
before the sinking fund payment date, in addition to the mandatory sinking fund
payment, make an optional sinking fund payment to the Trustee in an amount which
does not exceed the amount of the mandatory sinking fund payment, together with
accrued interest on the Debentures to be redeemed through the application of
such optional sinking fund payment to the date fixed for redemption. The option
to make any such optional sinking fund payment shall be noncumulative so that
the failure to exercise such right in any year, in whole or in part, shall not
increase the maximum optional sinking fund payment which may be made to the
Trustee in any subsequent year. The Company will furnish to the Trustee an
Officers' Certificate at least 60 days prior to the sinking fund payment date
indicating its intention to make any such optional sinking fund payment, which
Officers' Certificate shall specify the principal amount of Debentures to be
retired by such payment and shall state that such notice is irrevocable. The
Company agrees that after the giving of such Officers' Certificate it will pay
to the Trustee on or before the sinking fund payment date the sum so specified,
together with accrued interest on the Debentures to be redeemed through the
application of such optional sinking fund payment to the date fixed for
redemption.
At its option the Company may reduce or satisfy its obligation to make
any mandatory sinking fund payment by an amount not exceeding the sum of the
following:
(i) the principal amount of Debentures theretofore issued and
acquired by the Company and delivered to the Trustee for cancellation and
not theretofore made the basis for the reduction of a mandatory sinking
fund payment; and
(ii) the principal amount of Debentures redeemed and paid pursuant to
the provisions of this Article Three otherwise than through the operation
of the mandatory sinking fund, or which shall have been duly called for
redemption otherwise than through the operation of the mandatory sinking
fund and the redemption price of which shall have been deposited
-25-
<PAGE>
in trust for that purpose, and which have not theretofore been made the
basis for the reduction of a mandatory sinking fund payment; and
(iii) the principal amount of Debentures surrendered for conversion
pursuant to Article Fifteen (other than the principal amount of any such
Debentures so surrendered which had been called for redemption by
application of a mandatory sinking fund payment) and which have not
theretofore been made the basis for the reduction of a mandatory sinking
fund payment.
On or before December 1, in each year, beginning December 1, 1996, the Company
shall deliver to the Trustee an Officers' Certificate stating whether it elects
to reduce the amount to be paid to the Trustee in cash before the following
February 1, and if it elects to make such a reduction, setting forth the amount
of the reduction and the basis or bases provided above for such reduction,
together with any Debentures which are to be made the basis of such reduction
and which have not already been delivered to the Trustee and stating that none
of the Debentures so made the basis of such reduction have theretofore been
made the basis of any credit against any mandatory sinking fund payment.
The amount of any sinking fund payment payable to the Trustee on or
before any sinking fund redemption date shall automatically be reduced by the
sinking fund redemption price of all Debentures or portions thereof which shall
have been called for redemption on such sinking fund redemption date through the
sinking fund and shall have been surrendered on or before such date for
conversion pursuant to Article Fifteen.
If the sinking fund payment or payments made in cash plus any unused
balance of any preceding sinking fund payments made in cash shall exceed
$100,000 (or a lesser sum if the Company shall so request), it shall be applied
by the Trustee on the February 1 following the date of such payment to the
redemption of Debentures at the principal amount thereof with accrued interest
to the date fixed for redemption. The Trustee shall select, in the manner
provided in Section 3.02, for redemption on such February 1, a sufficient
principal amount of Debentures to absorb said cash, as nearly as may be, and
shall, at the expense and in the name of the Company, thereupon cause notice of
redemption of the Debentures to be given in substantially the manner provided in
Section 3.02 (and with the effect provided in Section 3.03) for the redemption
of Debentures in part at the option of the Company, except that the notice of
-26-
<PAGE>
redemption shall also state that the Debentures are being redeemed for the
sinking fund. Any sinking fund monies not so applied or allocated by the Trustee
to the redemption of Debentures shall be added to the next cash sinking fund
payment received by the Trustee and, together with such payment, shall be
applied in accordance with the provisions of this Section 3.04. Any and all
sinking fund monies held by the Trustee on February 1, 2011 (or earlier, if the
maturity is accelerated) and not held for the payment or redemption of
particular Debentures shall be applied by the Trustee, together with other
monies, if necessary, to be deposited sufficient for the purpose, to the payment
of the principal of, and interest on, the Debentures at maturity.
On or before each sinking fund payment date, the Company shall pay to
the Trustee in cash an amount equal to all interest accrued to the date fixed
for redemption of Debentures to be redeemed on the following February 1 pursuant
to this Section.
The Trustee shall not redeem or cause to be redeemed any Debentures
with sinking fund monies or mail any notice of redemption of Debentures by
operation of the sinking fund during the continuance of a default in payment of
interest or premium on the Debentures or of any Event of Default (other than an
Event of Default occurring as a consequence of this paragraph), except that if
the notice of redemption of any Debentures shall theretofore have been mailed in
accordance with the provisions hereof, the Trustee shall redeem or cause to be
redeemed such Debentures if cash sufficient for that purpose shall be deposited
with the Trustee for that purpose in accordance with the terms of this Article
Three. Except as aforesaid, any monies in the sinking fund at the time when any
such default or Event of Default shall occur and any monies thereafter paid into
the sinking fund shall, during the continuance of such default or Event of
Default, be held as security for the payment of all the Debentures; PROVIDED,
HOWEVER, that in case such Event of Default or default shall have been cured or
waived as provided herein, such monies shall thereafter be applied on the next
February 1 on which such monies may be applied pursuant to the provisions of
this Section 3.04. Furthermore, in the event and during the continuation of any
default in the payment of principal, premium, interest or any other payment due
on any Senior Indebtedness continuing beyond the period of grace, if any,
specified in the instrument or lease evidencing such Senior Indebtedness, then,
unless and until such default shall have been cured or waived or shall have
ceased to exist, the Trustee, upon receipt of the notice provided for in Section
4.05, shall not make any pay-
-27-
<PAGE>
ments on behalf of the Company on account of the sinking fund for the Debentures
except as provided in Section 4.02.
SECTION 3.05. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment bankers or other purchasers to purchase such Debentures by paying
to the Trustee in trust for the Debentureholders, on or before the opening of
business on the date fixed for redemption, an amount not less than the
applicable redemption price, together with interest accrued to the date fixed
for redemption, of such Debentures. Notwithstanding anything to the contrary
contained in this Article Three, the obligation of the Company to pay the
redemption price of such Debentures, together with interest accrued to the
date fixed for redemption, shall be deemed to be satisfied and discharged to
the extent such amount is so paid by such purchasers. If such an agreement
is entered into, a copy of which will be filed with the Trustee, any
Debentures not duly surrendered for conversion by the holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article Fifteen) surrendered by such purchasers
for conversion, all as of immediately prior to the close of business on the
date fixed for redemption, subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Debentures. Without
the Trustee's prior written consent, no arrangement between the Company and
such purchasers for the purchase and conversion of any Debentures shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such
arrangement for the purchase and conversion of any Debentures between the
Company and such purchasers to which the Trustee has not consented in
writing, including the costs and expenses incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
-28-
<PAGE>
ARTICLE FOUR
SUBORDINATION OF DEBENTURES
SECTION 4.01. AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Debentures issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article Four; and each Person holding any Debenture,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full of all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article Four shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 4.02. PAYMENTS TO DEBENTUREHOLDERS. In the event and during
the continuation of any default in the payment of principal, premium, interest
or any other payment due on any Senior Indebtedness continuing beyond the period
of grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by the Company
with respect to the principal of, or premium, if any, or interest on the
Debentures, except sinking payments made by the acquisition of Debentures under
Section 3.04 prior to the happening of such default and payments made pursuant
to Article Thirteen hereof from monies deposited with the Trustee pursuant
thereto prior to the happening of such default.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full, or payment thereof provided for
in money in accordance with its terms, before any payment is made on account of
the principal (and premium, if any) or interest on the Debentures (except
payments made pursuant to Article Thirteen hereof from monies
-29-
<PAGE>
deposited with the Trustee pursuant thereto prior to the happening of such
dissolution, winding-up, liquidation or reorganization); and upon any such
dissolution or winding-up or liquidation or reorganization any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Debentures
or the Trustee would be entitled, except for the provisions of this Article
Four, shall (except as aforesaid) be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the holders of the Debentures or by the Trustee
under this Indenture if received by them or it, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness, before any payment or distribution
is made to the holders of the Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee or the holders of the Debentures before all Senior
Indebtedness is paid in full, or provision is made for such payment in money
in accordance with its terms, such payment or distribution shall be held in
trust for the benefit of and shall be paid over or delivered to the holders
of Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness.
For purposes of this Article Four, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of
-30-
<PAGE>
which is subordinated at least to the extent provided in this Article Four with
respect to the Debentures to the payment of all Senior Indebtedness which may at
the time be outstanding; PROVIDED that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness
(other than leases) and of leases which are assumed are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Article Twelve hereof shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 4.02 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Twelve hereof. Nothing
in this Section 4.02 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 8.06.
SECTION 4.03. SUBROGATION OF DEBENTURES. Subject to the payment in
full of all Senior Indebtedness, the rights of the holders of the Debentures
shall be subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of (and premium, if
any) and interest on the Debentures shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article Four, and no payment over pursuant to the provisions of this Article
Four, to or for the benefit of the holders of Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article Four are and
are intended solely for the purpose of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Nothing contained in this Article Four or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Deben-
-31-
<PAGE>
tures, the obligation of the Company, which is absolute and unconditional, to
pay to the holders of the Debentures the principal of (and premium, if any) and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article Four of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Four, the Trustee, subject to the provisions of Section 8.01,
and the holders of the Debentures shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Four.
SECTION 4.04. AUTHORIZATION BY DEBENTUREHOLDERS. Each holder of a
Debenture by his acceptance thereof authorizes and directs the Trustee in his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Four and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 4.05. NOTICE TO TRUSTEE. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
which would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article Four. The
Trustee, subject to the provisions of Section 8.01, shall be entitled to assume
that no such fact exists unless the Company or any holder of Senior Indebtedness
or any trustee therefor has given such notice to a Responsible Officer of the
Trustee at the Principal Office of the Trustee. Notwithstanding the provisions
of this Article Four or any other
-32-
<PAGE>
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article Four, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Principal Office of
the Trustee from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 8.01, shall be entitled in all
respects to assume that no such facts exist; PROVIDED that if on a date not
fewer than three business days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debenture) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 4.05, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.
Notwithstanding anything to the contrary hereinbefore set forth,
nothing shall prevent any payment by the Company or the Trustee to the
Debentureholders of monies in connection with a redemption of Debentures if (i)
notice of such redemption has been given pursuant to Article Three or Section
13.01 hereof prior to the receipt by the Trustee of written notice as aforesaid,
and (ii) such notice of redemption is given not earlier than 60 days before the
redemption date.
The Trustee, subject to the provisions of Section 8.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article Four, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article Four, and if such
-33-
<PAGE>
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 4.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee
in its individual capacity shall be entitled to all the rights set forth in this
Article Four in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 8.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Four, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.01, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Debentures,
the Company or any other Person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Four or otherwise.
SECTION 4.07. NO IMPAIRMENT OF SUBORDINATION. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Debentures at
the places, at the respective times and in the manner provided herein and in the
Debentures. Each instalment of interest on the Debentures may be paid by
mailing checks for the interest payable to or upon the written order of the
holders of Deben-
-34-
<PAGE>
tures entitled thereto as they shall appear on the registry books of the
Company.
SECTION 5.02. OFFICES FOR NOTICES AND PAYMENTS, ETC. So long as any of
the Debentures remain outstanding, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Debentures may be
presented for payment, and an office or agency where the Debentures may be
presented for registration of transfer and for exchange and conversion as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Debentures or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
each such office or agency and of any change of location thereof. If the
Company shall fail to maintain any such office or agency or shall fail to give
such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Principal
Office of the Trustee and the Company hereby appoints the Trustee at the
Principal Office of the Trustee as its agent to receive all such presentations,
demands and notices.
SECTION 5.03. APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.04. PROVISION AS TO PAYING AGENT. (a) If the Company shall
appoint a paying agent other than the Trustee, it will cause such paying agent
to execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Debentures (whether such sums have been paid to it by the Company or by any
other obligor on the Debentures) in trust for the benefit of the holders of
the Debentures;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Debentures) to make any payment of
the principal of and premium, if any, or interest on the
-35-
<PAGE>
Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all sums
so held in trust.
The Company shall, before each due date of the principal of, premium,
if any, or interest on the Debentures, deposit with the paying agent a sum
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on the
Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will notify the Trustee of any failure to
take such action and of any failure by the Company (or by any other obligor
under the Debentures) to make any payment of the principal of, premium, if any,
or interest on the Debentures when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such money.
(d) Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.03 and 13.04.
-36-
<PAGE>
ARTICLE SIX
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 6.01. DEBENTUREHOLDERS' LISTS. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee,
semiannually, not more than 15 days after each January 15 and July 15 in each
year beginning with July 15, 1986, and at such other times as the Trustee may
request in writing, within thirty days after receipt by the Company of any such
request, a list in such form as the Trustee may reasonably require of the names
and addresses of the holders of Debentures as of a date not more than fifteen
days prior to the time such information is furnished, except that no such list
need be furnished so long as the Trustee is acting as Debenture registrar.
SECTION 6.02. PRESERVATION AND DISCLOSURE OF LISTS. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 6.01 or
maintained by the Trustee in its capacity as Debenture registrar, if so acting.
The Trustee may destroy any list furnished to it as provided in Section 6.01
upon receipt of a new list so furnished.
(b) In case three or more holders of Debentures (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other holders of
Debentures with respect to their rights under this Indenture or under the
Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its
election, either:
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of
this Section 6.02, or
(2) inform such applicants as to the approximate number of holders of
Debentures whose names and addresses appear in the information
-37-
<PAGE>
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 6.02, and as to the approximate cost of
mailing to such Debentureholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Debentureholder whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 6.02 a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Securities and Exchange Commission, together with a
copy of the material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the best interests
of the holders of Debentures or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If said Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, said Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after the entry of such order and
the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every holder of the Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor the Debenture registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the holders of Debentures in accordance with the provisions of
subsection (b) of this Section 6.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
-38-
<PAGE>
SECTION 6.03. REPORTS BY THE COMPANY. (a) The Company covenants and
agrees to file with the Trustee, within fifteen days after the Company is
required to file the same with the Securities and Exchange Commission, copies of
the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as said Commission may from time
to time by rules and regulations prescribe) which the Company may be required to
file with said Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and said Commission, in accordance with rules and
regulations prescribed from time to time by said Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Securities and Exchange Commission, in accordance with the rules and regulations
prescribed from time to time by said Commission, such additional information,
documents and reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be required from
time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail to all
holders of Debentures, as the names and addresses of such holders appear upon
the registry books of the Company, within thirty days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this
Section 6.03 as may be required by rules and regulations prescribed from time to
time by the Securities and Exchange Commission.
SECTION 6.04. REPORTS BY THE TRUSTEE. (a) On or before July 15, 1986,
and on or before July 15 in every year thereafter, so long as any Debentures are
outstanding hereunder, the Trustee shall transmit to the Debentureholders, as
hereinafter in this Section 6.04 provided, a brief report dated as of the
preceding May 15 with respect to:
(1) its eligibility under Section 8.09, and its qualification under
Section 8.08, or in lieu thereof, if to the best of its knowledge it has
continued to
-39-
<PAGE>
be eligible and qualified under such Sections, a written statement to such
effect;
(2) the character and amount of advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) which remain unpaid on the date of such report, and for
the reimbursement of which it claims or may claim a lien or charge, prior
to that of the Debentures, on any property or funds held or collected by
it as Trustee, except that the Trustee shall not be required (but may
elect) to state such advances if such advances so remaining unpaid
aggregate not more than one-half of one percent of the principal amount of
the Debentures outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all other
indebtedness owing by the Company (or by any other obligor on the
Debentures) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in paragraphs (2), (3), (4) or
(6) of subsection (b) of Section 8.13;
(4) the property and funds, if any, physically in the possession of
the Trustee, as such, on the date of such report;
(5) any additional issue of Debentures which the Trustee has not
previously reported; and
(6) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in its
opinion materially affects the Debentures, except action in respect of a
default, notice of which has been or is to be withheld by it in accordance
with the provisions of Section 7.08.
(b) The Trustee shall transmit to the Debentureholders, as
hereinafter provided, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such), since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section 6.04 (or, if no such report has
-40-
<PAGE>
yet been so transmitted, since the date of execution of this Indenture), for the
reimbursement of which it claims or may claim a lien or charge prior to that of
the Debentures on property or funds held or collected by it as Trustee, and
which it has not previously reported pursuant to this subsection, except that
the Trustee shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate ten percent or less of the
principal amount of Debentures outstanding at such time, such report to be
transmitted within ninety days after such time.
(c) Reports pursuant to this Section 6.04 shall be transmitted by
mail to all holders of Debentures as the names and addresses of such holders
appear upon the registry books of the Company.
(d) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with each stock
exchange upon which the Debentures are listed and also with the Securities and
Exchange Commission. The Company will notify the Trustee when and as the
Debentures become listed on any stock exchange.
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON THE EVENT OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any instalment of interest upon any of
the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of thirty days; or
(b) default in the payment of the principal of and premium, if any,
on any of the Debentures as and when the same shall become due and payable
either at maturity or in connection with any redemption, by declaration or
otherwise; or
-41-
<PAGE>
(c) default in the payment of any sinking fund instalment as and when
the same shall become due and payable; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture continued for a period of forty-five days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and the Trustee by the holders of at least
twenty-five percent in aggregate principal amount of the Debentures at the
time outstanding; or
(e) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of ninety
consecutive days;
then and in each and every such case, unless the principal of all of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than twenty-five percent in aggregate principal amount of
the Debentures then outstanding hereunder, by notice in writing to the
-42-
<PAGE>
Company (and to the Trustee if given by Debentureholders), may declare the
principal of all the Debentures and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Debentures contained to the contrary notwithstanding. This provision, however,
is subject to the condition that if, at any time after the principal of the
Debentures shall have been so declared due and payable, and before any judgment
or decree for the payment of the monies due shall have been obtained or entered
as hereinafter provided, the Company shall pay or shall deposit with the Trustee
a sum sufficient to pay all matured instalments of interest upon all the
Debentures and the principal of and premium, if any, on any and all Debentures
which shall have become due otherwise than by acceleration (with interest on
overdue instalments of interest (to the extent that payment of such interest is
enforceable under applicable law) and on such principal and premium, if any, at
the rate borne by the Debentures, to the date of such payment or deposit) and
the expenses of the Trustee, and if any and all defaults under this Indenture,
other than the nonpayment of principal of and premium, if any, and accrued
interest on Debentures which shall have become due by acceleration, shall have
been remedied--then and in every such case the holders of a majority in
aggregate principal amount of the Debentures then outstanding, by written notice
to the Company and to the Trustee, may waive all defaults and rescind and annul
such declaration and its consequences; but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default, or shall
impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
SECTION 7.02. PAYMENT OF DEBENTURES ON DEFAULT; SUIT THEREFOR. The
Company covenants that (a) in case default shall Be made in the payment of any
instalment of interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty days, or (b) in case default shall be made in the payment of the
principal of and premium, if any, on any of the
-43-
<PAGE>
Debentures as and when the same shall have become due and payable, whether at
maturity of the Debentures or in connection with any redemption, by
declaration or otherwise -- then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Debentures,
the whole amount that then shall have become due and payable on all such
Debentures for principal and premium, if any, or interest, or both, as the
case may be, with interest upon the overdue principal and premium, if any,
and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue instalments of interest at the rate borne by
the Debentures; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses or liabilities incurred by the Trustee hereunder other than
through its negligence or bad faith. Until such demand by the Trustee, the
Company may pay the principal of and premium, if any, and interest on the
Debentures to the registered holders, whether or not the Debentures are
overdue.
In case the Company shall fail forthwith to pay such Amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Coder or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company, the property of the Company or such other obligor, or
in the case of any other similar judicial proceedings relative to the Company or
other obligor upon the Debentures, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of the Debentures shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand pursuant to the provisions of this Section 7.02, shall be
entitled and empowered, by intervention in such
-44-
<PAGE>
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal, premium, if any, and interest owing and unpaid in respect
of the Debentures, and, in case of any judicial proceedings, to file such proofs
of claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of its charges and expenses; and
any receiver, assignee or trustee in bankruptcy or reorganization liquidator,
custodian on similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for compensation and
expenses, including counsel fees incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation
expenses and counsel fees out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, monies, securities
and other property which the holders of the Debentures may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Debentureholder any plan of
reorganization or arrangement, affecting the Debentures or the rights of any
Debentureholder, or to authorize the Trustee to vote in respect of the claim of
any Debentureholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof on any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the holders of the
Debentures.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the
-45-
<PAGE>
Debentures, and it shall not be necessary to make any holders of the Debentures
parties to any such proceedings.
SECTION 7.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article Seven shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof if fully
paid:
First: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and of all other expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith;
Second: Subject to the provisions of Article Four, in case the
principal of the outstanding Debentures shall not have become due and be
unpaid, to the payment of interest on the Debentures in default in the
order of the maturity of the instalments of such interest with interest (to
the extent that such interest has been collected by the Trustee) upon the
overdue instalments of interest at the rate borne by the Debentures, such
payments to be made ratably to the persons entitled thereto;
Third: Subject to the provisions of Article Four, in case the
principal of the outstanding Debentures shall have become due, by
declaration or otherwise, and be unpaid to the payment of the whole amount
then owing and unpaid upon the Debentures for principal and premium, if
any, and interest with interest on the overdue principal and premium, if
any, and (to the extent that such interest has been collected by the
Trustee) upon overdue instalments of interest at the rate borne by the
Debentures; and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Debentures, then to the
payment of such principal and premium, if any, and interest without
preference or priority of principal and premium, if any, over interest or
of interest over principal and premium, if any, or of any instalment of
interest over any other instalment of interest, or of any Debenture over
any other Debenture, ratably to the aggregate of
-46-
<PAGE>
such principal and premium, if any, and accrued and unpaid interest;
Fourth: Subject to the provisions of Article Four, to the payment of
the remainder, if any, to the Company or any other person lawfully entitled
thereto.
SECTION 7.04. PROCEEDINGS BY DEBENTUREHOLDER. No holder of any
Debenture shall have any right by virtue of or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of default and of the continuance thereof; as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent in aggregate principal amount of the Debentures then outstanding shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for sixty
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 7.07; it being understood and intended, and being
expressly covenanted by the taker and holder of every Debenture with every other
taker and holder and the Trustee, that no one or more holders of Debentures
shall have any right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holder of Debentures, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Debentures (except as otherwise provided
herein). For the protection and enforcement of this Section 7.04, each and
every Debentureholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Notwithstanding any other provisions of this Indenture and any
provision of any Debenture, however, the right of any holder of any Debenture to
receive payment of the principal of and premium, if any, and interest on such
Debenture, on or after the respective due dates expressed in such Debenture, or
-47-
<PAGE>
to institute suit for the enforcement of any such payment on or after such
respective dates against the Company shall not be impaired or affected without
the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in his own behalf and for his own
benefit may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
SECTION 7.05. PROCEEDINGS BY TRUSTEE. In case of an Event of Default
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 7.06. REMEDIES CUMULATIVE AND CONTINUING. Except as provided
in Section 2.06, all powers and remedies given by this Article Seven to the
Trustee or to the Debentureholders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or an acquiescence therein; and, subject to the provisions of Section
7.04, every power and remedy given by this Article Seven or by law to the
Trustee or to the Debentureholders may be exercised from time to time, and as
often as shall be deemed expedient by the Trustee or by the Debentureholders.
SECTION 7.07. DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY
MAJORITY DEBENTUREHOLDERS. The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the
-48-
<PAGE>
Trustee; PROVIDED, HOWEVER, that (subject to the provisions of Section 8.01) the
Trustee shall have the right to decline to follow any such direction if the
Trustee shall be advised by counsel that the action or proceeding so directed
may not lawfully be taken or if the Trustee in good faith by its board of
directors or trustees, executive committee, or a trust committee of directors or
trustees and/or Responsible Officers shall determine that the action or
proceedings so directed could involve the Trustee in personal liability. Prior
to any declaration accelerating the maturity of the Debentures, the holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
may on behalf of the holders of all of the Debentures waive any past default or
Event of Default hereunder and its consequences except a default in the payment
of interest or premium, if any, on, or the principal of, the Debentures or a
failure by the Company to convert any Debentures into Common Stock. Upon any
such waiver the Company, the Trustee and the holders of the Debentures shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 7.07, said default
or Event of Default shall for all purposes of the Debentures and this Indenture
be deemed to have been cured and to be not continuing; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 7.08. NOTICE OF DEFAULTS. The Trustee shall, within ninety
days after the occurrence of a default, mail to all Debentureholders, as the
names and addresses of such holders appear upon the registry books of the
Company, notice of all defaults known to a Responsible Officer, unless such
defaults shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 7.08 being hereby defined to be the
events specified in clauses (a), (b), (c), (d), (e) and (f) of Section 7.01, not
including periods of grace, if any, or the giving of any notice, or both
provided for therein); and PROVIDED that, except in the case of default in the
payment of the principal of or premium, if any, or interest on any of the
Debentures or in the making of any sinking fund payment, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Debentureholders.
-49-
<PAGE>
SECTION 7.09. UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; PROVIDED, that the provisions of this Section 7.09 shall
not apply to any suit instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders, holding in the aggregate more
than ten percent in principal amount of the Debentures outstanding, or to any
suit instituted by any Debentureholder for the enforcement of the payment of the
principal of or premium, if any, or interest on any Debenture on or after the
due date expressed in such Debenture or to any suit for the enforcement of the
right to convert any Debenture in accordance with the provisions of Article
Fifteen.
ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01. DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
-50-
<PAGE>
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding determined as provided in Section 9.04
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or
affording protection to, the Trustee shall be subject to the provisions of
this Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or
-51-
<PAGE>
otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if there is reasonable
ground for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 8.02. RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as
otherwise provided in Section 8.01,
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an assistant Secretary or of
the Company;
(c) the Trustee may consult with counsel and any advice or opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
-52-
<PAGE>
(f) prior to the occurence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, coupon or other paper
or document unless requested in writing to do so by the holders of not less
than a majority in principal amount of the Debentures then outstanding;
PROVIDED, HOWEVER, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; the
reasonable expenses of every such examination shall be paid by the Company
or, if paid by the Trustee or any predecessor Trustee, shall be repaid by
the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
SECTION 8.03. NO RESPONSIBILITY FOR RECITALS, ETC. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
SECTION 8.04. TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR
MAY OWN DEBENTURES. The Trustee, any paying agent, any conversion agent or
Debenture registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Debenture registrar.
-53-
<PAGE>
SECTION 8.05. MONIES TO BE HELD IN TRUST. Subject to the provisions
of Section 13.04, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 8.06. COMPENSATION AND EXPENSES OF TRUSTEE. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim of liability in the premises. The
obligations of the Company under this Section 8.06 to compensate or indemnify
the Trustee and to pay or reimburse the Trustee for expenses, disbursements and
advances shall be secured by a lien prior to that of the Debentures upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of the holders of particular Debentures. The
obligation of the Company under this Section shall survive the satisfaction and
discharge of this Indenture.
SECTION 8.07. OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Certificate, in the absence
-54-
<PAGE>
of negligence or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 8.08. CONFLICTING INTEREST OF TRUSTEE. (a) If the Trustee has
or shall acquire any conflicting interest, as defined in this Section 8.08, it
shall, within ninety days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or resign in the manner and
with the effect specified in Section 8.10.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section 8.08, the Trustee shall, within ten
days after the expiration of such ninety-day period, transmit notice of such
failure to all holders of Debentures, as the names and addresses of such holders
appear upon the registry books of the Company.
(c) For the purpose of this Section 8.08, the Trustee shall be deemed
to have a conflicting interest if:
(1) the Trustee is trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other indenture is
a collateral trust indenture under which the only collateral consists of
Debentures issued under this Indenture; PROVIDED that there shall be
excluded from the operation of this paragraph any other indenture or
indentures under which other securities, or certificates of interest or
participation in other securities of the Company, are outstanding if (i)
this Indenture and such other indenture or indentures are wholly unsecured
and such other indenture or indentures are hereafter qualified under the
Trust Indenture Act of 1939, unless the Securities and Exchange Commission
shall have found and declared by order pursuant to subsection (b) of
Section 305 or subsection (c) of Section 307 of the Trust Indenture Act of
1939 that differences exist between the provisions of this Indenture and
the provisions of such other indenture or indentures which are so likely to
involve a material conflict of interest as to make it necessary in the
public interest or for the protection of investors to disqualify the
Trustee from acting as such under this Indenture and such other indenture
or indentures, or (ii) the Company shall have sustained the burden of
proving,
-55-
<PAGE>
on application to the Securities and Exchange Commission and after
opportunity for hearing thereon, that the trusteeship under this Indenture
and such other indenture is not so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such under
one of such indentures;
(2) the Trustee or any of its directors or executive officers is an
obligor upon the Debentures issued under this Indenture or an underwriter
for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee, or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (A) one individual may be a director and/or an executive officer of
the Trustee and a director and/or an executive officer of the Company, but
may not be at the same time an executive officer of both the Trustee and
the Company; (B) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a director
and/or an executive officer of the Trustee and a director of the Company;
and (C) the Trustee may be designated by the Company or by an underwriter
for the Company to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent, or depositary, or in
any other similar capacity, or, subject to the provisions of paragraph (1)
of this subsection (c), to act as trustee whether under an indenture or
otherwise;
(5) ten percent or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner, or
executive officer thereof, or twenty percent or more of such voting
securities is beneficially owned, collectively, by any two or more of such
persons; or ten percent or more of the voting securities of the
-56-
<PAGE>
Trustee is beneficially owned either by an underwriter for the Company or
by any director, partner, or executive officer thereof, or is beneficially
owned collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (A) five percent or more of
the voting securities, or ten percent or more of any other class of
security, of the Company, not including the Debentures issued under this
Indenture and securities issued under any other indenture under which the
Trustee is also trustee, or (B) ten percent or more of any class of
security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, five percent or more of the
voting securities of any person who, to the knowledge of the Trustee, owns
ten percent or more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, ten percent or more of any
class of security of any person who, to the knowledge of the Trustee, owns
fifty percent or more of the voting securities of the Company; or
(9) the Trustee owns on May 15 in any calendar year, in the capacity
of executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an aggregate of
twenty-five percent or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified percentage
of which would have constituted a conflicting interest under paragraph (6),
(7), or (8) of this subsection (c). As to any such securities of which the
Trustee acquired ownership through becoming executor, administrator or
testamentary trustee of an estate which included them, the provisions of
the preceding sentence shall not apply, for a period of two years from the
date of such acquisition, to the extent that such securities included in
such estate do not exceed twenty-five
-57-
<PAGE>
percent of such voting securities or twenty-five percent of any such class
of security. Promptly after May 15, in each calendar year, the Trustee
shall make a check of its holdings of such securities in any of the above-
mentioned capacities as of such May 15. If the Company fails to make
payment in full of principal of, premium, if any, or interest on any of the
Debentures when and as the same become due and payable, and such failure
continues for thirty days thereafter, the Trustee shall make a prompt check
of its holdings of such securities in any of the above mentioned capacities
as of the date of the expiration of such thirty-day period and, after such
date, notwithstanding the foregoing provisions of this paragraph (9), all
such securities so held by the Trustee, with sole or joint control over
such securities vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this subsection (c).
The specifications of percentages in paragraphs (5) to (9), inclusive,
of this subsection (c) shall not be construed as indicating that the ownership
of such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but shall
not include any note or other evidence of indebtedness issued to evidence an
obligation to repay monies lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (B) an obligation shall be deemed to
be in default when a default in payment of principal shall have continued for
thirty days or more and shall not have been cured; and (C) the Trustee shall not
be deemed to be the owner or holder of (i) any security which it holds as
collateral security (as trustee or otherwise) for an obligation which is not in
default as defined in clause (B) above, or (ii) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (iii) any security which it holds as agent for collection, or as custodian,
escrow agent, or depositary, or in any similar representative capacity.
-58-
<PAGE>
Except as provided in the next preceding paragraph hereof, the word
"security" or "securities" as used in this Indenture shall mean any note, stock,
treasury stock, bond, debenture, evidence of indebtedness, certificate of
interest or participation in any profit-sharing agreement, collateral-trust
certificate, pre-organization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other mineral rights,
or, in general, any interest or instrument commonly known as a "security" or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
(d) For the purposes of this Section 8.08:
(1) The term "underwriter" when used with reference to the Company
shall mean every person who, within three years prior to the time as of
which the determination is made, has purchased from the Company with a view
to, or has offered or sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any such
undertaking, or has participated or has had a participation in the direct
or indirect underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" shall mean any director of a corporation or
any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" shall mean any security presently
entitling the owner or holder
-59-
<PAGE>
thereof to vote in the direction or management of the affairs of a person,
or any security issued under or pursuant to any trust, agreement or
arrangement whereby a trustee or trustees or agent or agents for the owner
or holder of such security are presently entitled to vote in the direction
or management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the Debentures.
(6) The term "executive officer" shall mean the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
The percentages of voting securities and other securities specified in
this Section 8.08 shall be calculated in accordance with the following
provisions:
(A) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section 8.08 (each of
whom is referred to as a "person" in this paragraph) means such amount of
the outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(B) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(C) The term "amount", when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
-60-
<PAGE>
(D) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) Securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) Securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) Securities pledged by the issuer thereof as security
for an obligation of the issuer not in default as to principal or
interest or otherwise; and
(iv) Securities held in escrow if placed in escrow by the issuer
thereof;
PROVIDED, HOWEVER, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(E) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; PROVIDED, HOWEVER, that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and PROVIDED, FURTHER, that, in
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
SECTION 8.09. ELIGIBILITY OF TRUSTEE. The Trustee hereunder shall at
all times be a corporation organized and doing business under the laws of the
United States or any State or Territory thereof or of the District of Columbia
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least five million dollars.
-61-
<PAGE>
subject to supervision or examination by Federal, State, Territorial or District
of Columbia authority and having its principal office and place of business in
the Borough of Manhattan, City of New York, New York. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.09, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.10.
SECTION 8.10. RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee may
at any time resign by giving written notice of such resignation to the Company.
Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within sixty
days after the mailing of such notice of resignation to the Debentureholders,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six months may, subject to
the provisions of Section 7.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall
occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 8.08 after written request therefor by the
Company or by any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.09 and shall fail to resign after written request
therefor by the Company or by any such Debentureholder, or
-62-
<PAGE>
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten days after such nomination the Company objects
thereto, in which case the Trustee so removed or any Debentureholder, upon the
terms and conditions and otherwise as in subsection (a) of this Section 8.10
provided, may petition any court of competent jurisdiction for an appointment of
a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee to any of the provisions of this Section 8.10 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.11.
SECTION 8.11. ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor truste
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee,
-63-
<PAGE>
the trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 8.06, execute and deliver an instrument
transferring to such successor trustee all the rights and powers of the trustee
so ceasing to act. Upon request of any such successor trustee, the Company shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property or
funds held or collected by such trustee to secure any amounts then due it
pursuant to the provisions of Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company and the former trustee shall mail notice of the
succession of such trustee hereunder to the holders of Debentures at their
addresses as they shall appear on the registry books of the Company. If the
Company fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Company.
SECTION 8.12. SUCCESSION BY MERGER, ETC. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the trust business of the Trustee, shall be the successor
to the Trustee hereunder, provided such corporation shall be qualified under the
provisions of Section 8.08 and eligible under the provisions of Section 8.09
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may authenticate
such Debentures either in the name of any predecessor hereunder or in the name
of the succes-
-64-
<PAGE>
sor trustee; and in all such cases such certificates shall have the full force
which it is anywhere in the Debentures or in this Indenture provided that the
certificate of the Trustee shall have; PROVIDED, HOWEVER, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Debentures in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 8.13. LIMITATION ON RIGHTS OF TRUSTEE AS A CREDITOR. (a)
Subject to the provisions of subsection (b) of this Section 8.13, if the Trustee
shall be or shall become a creditor, directly or indirectly, secured or
unsecured, of the Company within four months prior to a default, as defined in
subsection (c) of this Section 8.13, or subsequent to such a default, then,
unless and until such default shall be cured, the Trustee shall set apart and
hold in a special account for the benefit of the Trustee individually, the
holders of the Debentures and the holders of other indenture securities (as
defined in paragraph (2) of subsection (c) of this Section 8.13):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such four-month period and valid as against
the Company and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in paragraph (2)
of this subsection, or from the exercise of any right of setoff which the
Trustee could have exercised if a petition in bankruptcy had been filed by
or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such four-month
period, or an amount equal to the proceeds of any such property, if
disposed of, SUBJECT, HOWEVER, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee
-65-
<PAGE>
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such four-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such four-
month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section 8.13, would occur within four months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such four-month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have the
same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the
-66-
<PAGE>
Debentureholders and the holders of other indenture securities in such manner
that the Trustee, the Debentureholders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee, the Debentureholders, and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to Title 11 of the United States Code
or applicable State law, but after crediting thereon receipts an account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership, or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, the Debentureholders, and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Debentureholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such four-month period shall be subject to the provisions of this subsection (a)
as though such resignation or removal had not occurred. If any Trustee has
resigned or been
-67-
<PAGE>
removed prior to the beginning of such four-month period, it shall be subject to
the provisions of this subsection (a) if and only if the following conditions
exist:
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued as
trustee, occurred after the beginning of such four-month period; and
(ii) such receipt of property or reduction of claim occurred within
four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section 8.13 a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advance and of the circumstances surrounding the
making thereof is given to the Debentureholders at the time and in the
manner provided in Section 6.04 with respect to reports pursuant to
subsections (a) and (b) thereof, respectively;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section 8.13;
(5) the ownership of stock or of other securities of a corporation
organized under the
-68-
<PAGE>
provisions of section 25(a) of the Federal Reserve Act, as amended, which
is directly or indirectly a creditor of the Company; or
(6) the Acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section 8.13.
(c) As used in this Section 8.13:
(1) the term "default" shall mean any failure to make payment in full
of the principal of or interest upon any of the Debentures or upon the
other indenture securities when and as such principal or interest becomes
due and payable;
(2) the term "other indenture securities" shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act of
1939) outstanding under any other indenture (A) under which the Trustee is
also trustee, (B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section 8.13 and (C) under which a
default exists at the time of the apportionment of the funds and property
held in said special account;
(3) the term "cash transaction" shall mean any transaction in which
full payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security; PROVIDED that the
security is received by the Trustee simultaneously with the creation of the
creditor relation-
-69-
<PAGE>
ship with the Company Arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation; and
(5) the term "Company" shall mean any obligor upon the Debentures.
ARTICLE NINE
CONCERNING THE DEBENTUREHOLDERS
SECTION 9.01. ACTION BY DEBENTUREHOLDERS. Whenever in this Indenture
it is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article Ten, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders.
SECTION 9.02. PROOF OF EXECUTION BY DEBENTUREHOLDERS. Subject to the
provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Debentureholder or his agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture registrar.
The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 10.06.
SECTION 9.03. WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the
Trustee, any paying agent, any conversion agent and any Debenture registrar may
deem the person in whose name such Debenture shall be registered upon the books
of the Company to be, and may treat him as, the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account
-70-
<PAGE>
of the principal of and premium, if any, and interest on such Debenture, for
conversion of such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any paying agent nor any conversion agent nor any Debenture
registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Debenture.
SECTION 9.04. COMPANY-OWNED DEBENTURES DISREGARDED. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on
the Debentures or by any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
any other obligor on the Debentures shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; PROVIDED that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action only Debentures which a
Responsible Officer knows are so, owned shall be so disregarded. Debentures so
owned which have been pledged in good faith may be regarded as outstanding for
the purposes of this Section 9.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Debentures and that
the pledgee is not the Company, any other obligor on the Debentures or a person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In the case of a
dispute as to such right, any decision by the trustee taken upon the advice of
counsel shall be full protection to the Trustee.
SECTION 9.05. REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Principal
Office and upon proof of holding as provided in Section 9.02, revoke such action
so far as concerns such Debenture. Except as aforesaid any such action taken by
the holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture and of any Debentures
issued in
-71-
<PAGE>
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Debenture or any Debenture issued in exchange
or substitution therefor.
ARTICLE TEN
DEBENTUREHOLDERS' MEETINGS
SECTION 10.01. PURPOSES OF MEETINGS. A meeting of Debentureholders
may be called at any time and from time to time pursuant to the provisions of
this Article Ten for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Debentureholders pursuant to any of the provisions of
Article Seven;
(2) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article Eight;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf
of the holders of any specified aggregate principal amount of the
Debentures under any other provision of this Indenture or under applicable
law.
SECTION 10.02. CALL OF MEETINGS BY TRUSTEE. The Trustee may at any
time call a meeting of Debentureholders to take any action specified in Section
10.01, to be held at such time and at such place in the Borough of Manhattan,
The City of New York, New York as the Trustee shall determine. Notice of every
meeting of the Debentureholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the registry books of the Company. Such notice shall also be mailed to the
Company. Such notices shall be mailed not less than twenty nor more than ninety
days prior to the date fixed for the meeting.
-72-
<PAGE>
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
SECTION 10.03. CALL OF MEETINGS BY COMPANY OR DEBENTUREHOLDERS. In
case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least ten percent in aggregate principal amount
of the Debentures then outstanding, shall have requested the Trustee to call a
meeting of Debentureholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within twenty days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place in said Borough of Manhattan, The City of New York, New York for such
meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
SECTION 10.04. QUALIFICATIONS FOR VOTING. To be entitled to vote at
any meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures or (b) be a person appointed by an instrument in writing as proxy by
a holder of one or more Debentures. The only persons who shall be entitled to
be present or to speak at any meeting of Debentureholders shall be the persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 10.05. REGULATIONS. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 10.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
-73-
<PAGE>
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Debentureholder or proxy shall be entitled to one vote for each $1,000 principal
amount of Debentures held or represented by him; PROVIDED, HOWEVER, that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.02 or 10.03 may be adjourned from time to time by a majority of those
present, whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
SECTION 10.06. VOTING. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the principal amount of the Debentures held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Debentureholders shall
be prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was mailed as provided in Section 10.02. The record shall show the
principal amount of the Debentures voting in favor of or against any resolution.
The record shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one of the duplicates shall be
delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
-74-
<PAGE>
SECTION 10.07. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article
Ten contained shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 11.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
DEBENTUREHOLDERS. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 15.06;
(b) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Debentures, any property or assets;
(c) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article Twelve hereof;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Debentures, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this indenture as herein set forth; PROVIDED, HOWEVER, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
-75-
<PAGE>
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default;
(e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for
such purpose; or
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture which shall not adversely
affect the interests of the holders of the Debentures.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise; PROVIDED, HOWEVER, that no such
supplemental indenture shall adversely affect the rights of the holders of the
Debentures.
Any supplemental indenture authorized by the provisions of this
Section 11.01 may be executed by the Company and the Trustee without the consent
of the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 11.02.
SECTION 11.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
DEBENTUREHOLDERS. With the consent (evidenced as provided in Article Nine) of
the holders of not less than 66 2/3% in aggregate principal amount of the
Debentures at the time outstanding, the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may from time to time and
at any time enter into an indenture or indentures sup-
-76-
<PAGE>
plemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debentures; PROVIDED, HOWEVER, that no such supplemental indenture shall
(i) extend the fixed maturity of any Debenture, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or impair or affect the rights of any Debentureholder
to institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debentures, or impair the right to convert the Debentures
into Common Stock subject to the terms set forth herein, including Section
15.06, without the consent of the holder of each Debenture so affected, or (ii)
reduce the aforesaid percentage of Debentures, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Debentures then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders
under this Section 11.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
SECTION 11.03. COMPLIANCE WITH TRUST INDENTURE ACT; EFFECT OF
SUPPLEMENTAL INDENTURES. Any supplemental indenture executed pursuant to the
provisions of this Article Eleven shall comply with the Trust Indenture Act of
1939, as then in effect. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article Eleven, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective
rights, limitation of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debentures shall
thereafter be determined, exercised and enforced hereunder
-77-
<PAGE>
subject in all respects to such modifications and amendments and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 11.04. NOTATION ON DEBENTURES. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Eleven may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Debentures then outstanding, upon surrender of
such Debentures then outstanding.
SECTION 11.05. EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.01 and
8.02, may receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article Eleven.
ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Subject to the provisions of Section 12.02, nothing contained in this Indenture
or in any of the Debentures shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance or lease (or successive sales, conveyances or
leases) of all or substantially all of the property of the Company, to any other
corporation (whether or not affiliated with the Company) authorized to acquire
and operate the same and which shall be organized under the laws of a State of
the United States or the District of Columbia; PROVIDED, HOWEVER, and the
Company hereby covenants and agrees, that upon any such consolidation, merger,
sale, conveyance or lease, the due and punctual payment of the principal of and
premium, if any, and interest on all of the Debentures, according to their
tenor, and the due and punctual performance and observance of all of
-78-
<PAGE>
the covenants and conditions of this Indenture to be performed by the Company,
shall be expressly assumed, by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee by the corporation (if other
than the Company) formed by such consolidation, or into which the Company shall
have been merged, or by the corporation which shall have acquired or leased such
property.
SECTION 12.02. SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of
any such consolidation, merger, sale, conveyance or lease and upon the
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Cray Research, Inc. any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Debentures which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Debentures
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Debentures so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof. In the event of any such consolidation, merger, sale,
conveyance or lease, the person named as the "Company" in the first paragraph of
this Indenture or any successor which shall thereafter have become such in the
manner prescribed in this Article Twelve may be dissolved, wound up and
liquidated at any time thereafter and such person shall be released from its
liabilities as obligor and maker of the Debentures and from its obligations
under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
-79-
<PAGE>
SECTION 12.03. OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee,
subject to Sections 8.01 and 8.02, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article Twelve.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. DISCHARGE OF INDENTURE. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures which shall have been destroyed, lost or stolen and
in lieu of or in substitution for which other Debentures shall have been
authenticated and delivered) and not theretofore cancelled, or (b) all the
Debentures not theretofore cancelled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption all of the Debentures (other
than any Debentures which shall have been mutilated, destroyed, lost or stolen
and in lieu of or in substitution for which other Debentures shall have been
authenticated and delivered) not theretofore cancelled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case
may be, and if in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the rights, obligations
and immunities of the Trustee hereunder), and the Trustee, on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 16.05 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agree-
-80-
<PAGE>
ing to reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred by the Trustee in connection with this Indenture or the
Debentures.
SECTION 13.02. DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.
Subject to Article Four and Section 13.04, all monies deposited with the Trustee
pursuant to Section 13.01 shall be held in trust and applied by it to the
payment, notwithstanding the provisions of Article Four, either directly or
through any paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Debentures for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
SECTION 13.03. PAYING AGENT TO REPAY MONIES HELD. Upon the
satisfaction and discharge of this Indenture, all monies then held by any paying
agent of the Debentures (other than the Trustee) shall, upon demand of the
Company, be repaid to it or paid to the Trustee, and thereupon such paying agent
shall be released from all further liability with respect to such monies.
SECTION 13.04. RETURN OF UNCLAIMED MONIES. Any monies deposited with
or paid to the Trustee for payment of the principal of, premium, if any, or
interest on Debentures and not applied but remaining unclaimed by the holders of
Debentures for two years after the date upon which the principal of, premium, if
any, or interest on such Debentures, as the case may be, shall have become due
and payable, shall be repaid to the Company by the Trustee on demand and all
liability of the Trustee shall thereupon cease with respect to such monies; and
the holder of any of the Debentures shall thereafter look only to the Company
for any payment which such holder may be entitled to collect provided, however,
that the Trustee, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper acceptable to
the Company, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
-81-
<PAGE>
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01. INDENTURE AND DEBENTURES SOLELY CORPORATE OBLIGATIONS.
No recourse for the payment of the principal of or premium, if any, or interest
on any Debenture, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture, or in any
Debenture, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Debentures.
ARTICLE FIFTEEN
CONVERSION OF DEBENTURES
SECTION 15.01. RIGHT TO CONVERT. Subject to and upon compliance with
the provisions of this Article, the holder of any Debenture shall have the
right, at his option, at any time prior to the close of business on February 1,
2011 (except that, with respect to any Debenture or portion of a Debenture which
shall be called for redemption, such right shall terminate, except as provided
in the third paragraph of Section 15.02, at the close of business on the date
fixed for redemption of such Debenture or portion of a Debenture unless the
Company shall default in payment due upon redemption thereof) to convert the
principal amount of any such Debenture, or any portion of such principal amount
which is $1,000 or an integral multiple thereof, into that number of fully paid
and non-assessable shares of Common Stock (as such shares shall then be
constituted) obtained by dividing the principal amount of the Debenture or
portion thereof surrendered for conversion by the conversion price, by surrender
of the Debenture so to be converted in whole or in part in the manner provided
in Section 15.02. A Holder of Debentures is not entitled to any rights of a
holder of Common Stock until such holder has converted his Debentures.
-82-
<PAGE>
SECTION 15.02. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON
STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to
exercise the conversion privilege, the holder of any Debenture to be converted
in whole or in part shall surrender such Debenture at an office or agency
maintained by the Company pursuant to Section 5.02, accompanied by the funds, if
any, required by the last paragraph of this Section, and shall give written
notice of conversion in the form provided on the Debentures (or such other
notice which is acceptable to the Company) to the Company at such office or
agency that the holder elects to convert such Debenture or the portion thereof
specified in said notice. Such notice shall also state the name or names (with
address) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued, and shall be
accompanied by transfer taxes, if required pursuant to Section 15.07. Each
Debenture surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration of such
Debenture, be duly endorsed by, or be accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the holder or his duly
authorized attorney.
As promptly as practicable after the surrender of such Debenture and
the receipt of such notice and funds, if any, as aforesaid, the Company shall
issue and shall deliver at such office or agency to such holder, or on his
written order, a certificate or certificates for the number of full shares
issuable upon the conversion of such Debenture or portion thereof in accordance
with the provisions of this Article and a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 15.03. In case any Debenture of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.03, the Company shall execute and the Trustee shall
authenticate and deliver to or upon the written order of the holder of the
Debenture so surrendered, without charge to him, a new Debenture or Debentures
in authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected an the date on
which such Debenture shall have been surrendered (accompanied by the funds, if
any, required by the last paragraph of this Section) and such notice shall have
been received by the Company, as aforesaid, and the person in whose name any
certificate or certificates for shares of Common Stock
-83-
<PAGE>
shall be issuable upon such conversion shall be deemed to have become on said
date the holder of record of the shares represented thereby; PROVIDED, HOWEVER,
that any such surrender on any date when the stock transfer books of the Company
shall be closed shall constitute the person in whose name the certificates are
to be issued as the record holder thereof for all purposes on the next
succeeding day on which such stock transfer books are open, but such conversion
shall be at the conversion price in effect on the date upon which such Debenture
shall have been surrendered.
Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the opening of business on such interest payment date shall (unless such
Debenture or portion thereof being converted shall have been called for
redemption on a date in such period) be accompanied by payment, in New York
Clearing House funds or other funds acceptable to the Company, of an amount
equal to the interest otherwise payable on such interest payment date on the
principal amount being converted; PROVIDED, HOWEVER, that no such payment need
be made if there shall exist at the time of conversion a default in the payment
of interest on the Debentures. An amount equal to such payment shall be paid by
the Company on such interest payment date to the holder of such Debenture at the
close of business on such record date; PROVIDED, HOWEVER, that if the Company
shall default in the payment of interest on such interest payment date, such
amount shall be paid to the person who made such required payment. Except as
provided above in this Section, no adjustment shall be made for interest accrued
on any Debenture converted or for dividends on any shares issued upon the
conversion of such Debenture as provided in this Article.
SECTION 15.03. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Debentures. If more than one Debenture shall be
surrendered for conversion at one time by the same holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Debentures (or specified portions thereof
to the extent permitted hereby) so surrendered. If any fractional share of
stock would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment therefor in cash at the current market value
thereof. The market value of a share of Common Stock shall be the closing price
on the first day (which is not a Legal Holiday as defined in Section 16.06)
immediately preceding the day on which the Debentures (or
-84-
<PAGE>
specified portions thereof) are deemed to have been converted and such closing
price shall be determined as provided in subsection (d) of Section 15.05.
SECTION 15.04. CONVERSION PRICE. The conversion price shall be as
specified in the form of Debenture hereinabove set forth, subject to adjustment
as provided in this Article.
SECTION 15.05. ADJUSTMENT OF CONVERSION PRICE. The conversion price
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend, or make a
distribution, in shares of its Common Stock, on its Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or
(iii) combine its outstanding Common Stock into a smaller number of shares,
the conversion price in effect immediately prior thereto shall be adjusted
so that the holder of any Debenture thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock of the
Company which he would have owned or have been entitled to receive after
the happening of any of the events described above had such Debenture been
converted immediately prior to the happening of such event. An adjustment
made pursuant to this subsection (a) shall become effective immediately
after the record date in the case of a dividend and shall become effective
immediately after the effective date in the case of subdivision or
combination.
(b) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase Common
Stock at a price per share less than the current market price per share of
Common Stock (as defined in subsection (d) below) at the record date for
the determination of stockholders entitled to receive such rights or
warrants, the conversion price shall be adjusted so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the date of issuance of such rights or warrants by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants plus
the number of shares
-85-
<PAGE>
which the aggregate offering price of the total number of shares so offered
would purchase at such current market price, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall
be made successively whenever any such rights or warrants are issued, and
shall become effective immediately after such record date. In determining
whether any rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such current market price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the Company
for such rights or warrants, the value of such consideration, if other than
cash, to be determined by the Board of Directors.
(c) In case the Company shall distribute to all holders of its Common
Stock any shares of capital stock of the Company (other than Common Stock)
or evidences of its indebtedness or assets (excluding cash dividends or
distributions paid from retained earnings of the Company) or rights or
warrants to subscribe for or purchase any of its securities (excluding
those referred to in subsection (b) above), then in each such case the
conversion price shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior
to the date of such distribution by a fraction of which the numerator shall
be the current market price per share (as defined in subsection (d) below)
of the Common Stock on the record date mentioned below less the then fair
market value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive, and described in a certificate filed
with the Trustee) of the portion of the capital stock or assets or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock, and the denominator shall be the
current market price per share (as defined in subsection (d) below) of the
Common Stock. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution.
-86-
<PAGE>
(d) For the purpose of any computation under subsections (b) and (c)
above, the current market price per share of Common Stock at any date shall
be deemed to be the average of the last reported sale prices for the twenty
consecutive Trading Days (as defined below) next preceding the day in
question. The last reported sale price for each day shall be (i) the last
reported sale price of Common Stock on the National Market of the National
Association of Securities Dealers, Inc., Automated Quotation System, or any
similar system of automated dissemination of quotations of securities
prices then in common use, if so quoted; or (ii) if not quoted as described
in clause (i), the mean between the high bid and low asked quotations for
Common Stock as reported by the National Quotation Bureau Incorporated if
at least two securities dealers have inserted both bid and asked quotations
for such class of stock on at least 5 of the 10 preceding days, or (iii) if
the Common Stock is listed or admitted for trading on any national
securities exchange, the last sale price, or the closing bid price if no
sale occurred, of such class of stock on the principal securities exchange
on which such class of stock is listed. If the Common Stock is quoted on a
national securities or central market system, in lieu of a market or
quotation system described above, the closing price shall be determined in
the manner set forth in clause (ii) of the preceding sentence if bid and
asked quotations are reported but actual transactions are not, and in the
manner set forth in clause (iii) of the preceding sentence if actual
transactions are reported. If none of the conditions set forth above is
met, the closing price of Common Stock on any day or the average of such
closing prices for any period shall be the fair market value of such class
of stock as determined by a member firm of the New York Stock Exchange,
Inc. selected by the Company. As used herein the term "Trading Days" with
respect to Common Stock means (i) if the Common Stock is quoted on the
National Market of the National Association of Securities Dealers, Inc.,
Automated Quotation System or any similar system of automated dissemination
of quotations of securities prices, days on which trades may be made on
such system or (ii) if the Common Stock is listed or admitted for trading
on any national securities exchange, days on which such national securities
exchange is open for business.
-87-
<PAGE>
(e) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
subsection (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article Fifteen shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be. Anything in this Section 15.05 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the conversion price,
in addition to those required by this Section 15.05, as it in its
discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock
or securities, or a distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders
shall not be taxable.
(f) Whenever the conversion price is adjusted, as herein provided,
the Company shall promptly file with the Trustee and any conversion agent
other than the Trustee an Officers' Certificate setting forth the
conversion price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
conversion price setting forth the adjusted conversion price and the date
on which such adjustment becomes effective and shall mail such notice of
such adjustment of the conversion price to the holder of each Debenture at
his last address appearing on the Debenture register provided for in
Section 2.05 of this Indenture.
(g) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the holder of any Debenture converted after such record date and before
the occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to
-88-
<PAGE>
such holder any amount in cash in lieu of any fraction pursuant to Section
15.03.
SECTION 15.06. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any of the following events occur, namely (i) any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of the
Debentures (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation or merger of the Company with another
corporation shall be effected as a result of which holders of Common Stock
issuable upon conversion of the Debentures shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock or (iii) any sale or conveyance of the properties
and assets of the Company as, or substantially as, an entirety to any other
corporation, then the Company or such successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall conform to the Trust Indenture Act of 1939 as in force at the date of
execution of such supplemental indenture) providing that each Debenture shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of a number of
shares of Common Stock issuable upon conversion of such Debentures immediately
prior to such reclassification, change, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article. The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Debentures, at his address
appearing on the Debenture register provided for in Section 2.05 of this
Indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers and sales.
SECTION 15.07. TAXES ON SHARES ISSUED. The issue of stock
certificates on conversions of Debentures shall be made without charge to the
converting Debentureholder for any tax in respect of the issue thereof. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of stock in any name
other than that of the holder of any Debenture converted, and the Company shall
not be required to issue
-89-
<PAGE>
or deliver any such stock certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
SECTION 15.08. RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares, or out of shares held in its treasury, sufficient shares to provide for
the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment reducing the
conversion price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Debentures, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted conversion price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any Federal or
State law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
The Company further covenants that if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange the Company will, if permitted by the rules of such exchange, list and
keep listed so long as the Common Stock shall be so listed on such exchange, all
Common Stock issuable upon conversion of the Debentures.
SECTION 15.09. RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine whether any facts exist which may require
any adjustment of the conversion price, or with respect to the nature or extent
or calculation of any such adjustment when made, or with
-90-
<PAGE>
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Subject to the provisions of Section
8.01, neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender
of any Debenture for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article.
SECTION 15.10. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value) or, of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture register,
provided for in Section 2.05 of this Indenture, as promptly as possible but in
any event at least fifteen days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is
-91-
<PAGE>
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution or
rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 16.01. PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements in this Indenture contained by
the Company shall bind its successors and assigns whether so expressed or not.
SECTION 16.02. OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 16.03. ADDRESSES FOR NOTICES, ETC. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures on the Company may be
given or served by being deposited postage prepaid by registered or certified
mail in a post office letter box addressed (until another address is filed by
the Company with the Trustee) to Cray Research, Inc., 608 Second Avenue, South
Minneapolis, Minnesota 55402. Attention: John F. Carlson. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the Principal Office of the Trustee, which office is, at the date as
of which this Indenture is dated, located at 600 Fifth Avenue, New York, New
York 10020. Attention: Corporate Trust Department.
-92-
<PAGE>
SECTION 16.04. GOVERNING LAW. This Indenture and each Debenture shall
be deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws of New York.
SECTION l6.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 16.06. LEGAL HOLIDAYS. In any case where the date of maturity
of interest on or principal of the Debentures or the date fixed for redemption
of any Debenture will be in the Borough of Manhattan, The City of New York a
legal holiday or a day on which banking institutions are authorized by law or
executive order to close ("Legal Holidays"), then payment of such interest on or
principal of the Debentures need not be made on such date but may be made on the
next succeeding day not a Legal Holiday with the same force and effect as if
made on the date of maturity or the date fixed for redemption and no interest
shall accrue for the period from and after such date.
SECTION 16.07. TRUST INDENTURE ACT TO CONTROL. If and to the extent
that any provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture which is required to be included in this
Indenture by
-93-
<PAGE>
any of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such
required provision shall control.
SECTION 16.08. NO SECURITY INTEREST CREATED. Nothing in this
Indenture or in the Debentures, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction
where property of the Company or its Subsidiaries is located.
SECTION 16.09. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any person, other than the
parties hereto, any paying agent, any Debenture registrar and their successors
hereunder, the holders of Debentures and the holders of Senior Indebtedness, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 16.10. TABLE OF CONTENTS, HEADINGS, ETC. The table of
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 16.11. EXECUTION IN COUNTERPARTS. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Manufacturers Hanover Trust Company hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
-94-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
CRAY RESEARCH, INC.
By /s/ John F. Carlson
--------------------------------
John F. Carlson
Executive Vice President
and Chief Financial Officer
Attest:
/s/ Signature unreadable
- -------------------------
[Seal]
MANUFACTURERS HANOVER TRUST COMPANY
By /s/ John Generale
---------------------------------
John Generale
Vice President
Attest:
/s/ P. Ferreri
- -------------------------
P. Ferreri
Trust Officer
-95-
<PAGE>
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 14th of February, 1986, before me personally came John F.
Carlson, to me known, who, being by me duly sworn did depose and say that he
resides at 5330 Hodgson Road, St. Paul, Minnesota 55112; that he is Executive
Vice President and Chief Financial Officer of Cray Research, Inc., one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name thereto by
like authority.
/s/ Signature unreadable
------------------------------
Notary Public
My Commission Expires
[NOTARIAL SEAL]
[NOTARIAL SEAL] 5-1-90
-96-
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 14th day of February, 1986, before me personally came John Generale,
to me known, who, being by me duly sworn did depose and say that he resides at
915 82nd Street, Brooklyn, N.Y.; that he is a Vice President of Manufacturers
Hanover Trust Company, one of the corporations described in and which executed
the above instrument; that he knows the corporate seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by the authority of the Board of Directors of said corporation; and that
he signed his name thereto by like authority.
/s/ Kathy A. Murphy
---------------------------------
Notary Public
My Commission Expires
[NOTARIAL SEAL]
KATHY A. MURPHY
Notary Public, State of New York
No. 60-1325910
Qualified in Westchester County
Certificate filed in New York County
Commission Expires March 30, 1986
-97-
<PAGE>
EXHIBIT 4.6
SILICON GRAPHICS, INC.
CRAY RESEARCH, INC.
AND
CHEMICAL BANK
(FORMERLY KNOWN AS MANUFACTURERS HANOVER TRUST COMPANY)
Trustee
---------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of June 30, 1996
To Indenture dated as of February 1, 1986
between
CRAY RESEARCH, INC.
and
MANUFACTURERS HANOVER TRUST COMPANY
Trustee
---------------------------------------------------
6 1/8% Convertible Subordinated Debentures Due 2011
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of June 30, 1996, among CRAY
RESEARCH, INC., a Delaware corporation (the "COMPANY"), SILICON GRAPHICS, INC.,
a Delaware corporation ("PARENT"), and CHEMICAL BANK (formerly known as
Manufacturers Hanover Trust Company) a corporation organized and existing under
the laws of the State of New York (the "TRUSTEE"), as Trustee to the Indenture
(the "INDENTURE"), dated as of February 1, 1986, between the Company and the
Trustee.
RECITAL OF THE COMPANY AND THE TRUSTEE
WHEREAS, the Company and the Trustee are parties to the Indenture,
pursuant to which certain evidences of indebtedness of the Company have been
issued (the "DEBENTURES").
RECITALS OF THE COMPANY AND PARENT
WHEREAS, the Company, C Acquisition Corporation ("MERGER SUB"), a
wholly owned subsidiary of Parent, and Parent are parties to an Agreement and
Plan of Merger, dated as of February 25, 1996, pursuant to which Merger Sub
shall be merged (the "MERGER") with and into the Company on the date hereof,
with the Company as the surviving corporation and a wholly owned subsidiary of
Parent; and
WHEREAS, the Company and Parent desire, pursuant to Section 11.01 of
the Indenture, to supplement and amend the Indenture, in order to comply with
Section 15.06 of the Indenture.
RECITALS OF PARENT
WHEREAS, Parent is a corporation validly existing under the laws of
the State of Delaware;
WHEREAS, Parent has duly authorized the execution and delivery of this
First Supplemental Indenture to comply with Section 15.06 of the Indenture and
to jointly and severally assume liability for all the obligations of the
Company under the Debentures and the Indenture; and
WHEREAS, immediately after the Merger, no Event of Default (as defined
in the Indenture) exists.
NOW, THEREFORE, the Company, Parent and the Trustee covenant and agree
as follows:
SECTION 1. Pursuant to Section 15.06 of the Indenture, each Debenture shall be
convertible into that amount of common stock of Parent, $.001 par value per
share, and cash, if any, receivable upon consummation of the Merger by a holder
of the number of
2
<PAGE>
shares of common stock of the Company, $1.00 par value per share, issuable upon
conversion of such Debenture immediately prior to the consummation of the
Merger.
SECTION 2. Parent hereby jointly and severally assumes liability for the due and
punctual payment of the principal and premium, if any, and interest on all of
the Debentures and the due and punctual performance of all of the covenants and
conditions of the Indenture to be performed by the Company, with the same effect
as if it had been named in the Indenture as a party thereto.
SECTION 3. Any notice or communication by the Trustee to the Company or Parent
is duly given if in writing and delivered in person or mailed by first-class
mail to the address set forth below:
Silicon Graphics, Inc.
2011 North Shoreline Boulevard
Mountain View, California 94043-1389
Attention: Legal Services
SECTION 4. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS FIRST
SUPPLEMENTAL INDENTURE.
SECTION 5. This First Supplemental Indenture may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the
same instrument.
3
<PAGE>
IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first written above.
SILICON GRAPHICS, INC.
By: /s/ William M. Kelly
------------------------------
Name: William M. Kelly
Title: Vice President,
General Counsel and Secretary
ATTEST:
By: /s/ Sandra M. Escher
------------------------------
Name: Sandra M. Escher
Title: Assistant Secretary
[SEAL]
CRAY RESEARCH, INC.
By: /s/ Robert H. Ewald
------------------------------
Name: Robert H. Ewald
Title: President and Chief Operating
Officer
ATTEST:
By: /s/ John L. Sullivan
------------------------------
Name: John L. Sullivan
Title: General Counsel and Secretary
[SEAL]
CHEMICAL BANK
By: /s/ Frank J. Grippo
------------------------------
Name: Frank J. Grippo
Title: Vice President
ATTEST:
By: /s/ Francine Springer
------------------------------
Name: Francine Springer
Title: Trust Officer
[SEAL]
