UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 28, 1998
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AMPEX CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-20292 13-3667696
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(State or Other (Commission) (I.R.S. Employer
Jurisdiction of File Number) Identification
Incorporation) No.)
500 Broadway, Redwood City, CA 94063-3199
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (415) 367-2011
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(Former name or former address, if changed since last report.)
677559.1
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
On January 28, 1998, the Registrant issued and sold $30,000,000
aggregate principal amount of its 12% Senior Notes due 2003 (the "Notes") and
Warrants to purchase 1,020,000 shares of its Class A Common Stock at a price of
$2.25 per share. The Warrants expire, unless exercised, on March 15, 2003. The
Notes were issued under an Indenture which contains restrictive covenants on (i)
the incurrence of additional senior indebtedness of the Company and its
Restricted Subsidiaries (as defined), (ii) payment of dividends on, and
redemption of capital stock and certain subordinated obligations of, the
Company, (iii) investments in Unrestricted Subsidiaries (as defined), (iv) sales
of assets and subsidiary stock, (v) transactions with affiliates, and (vi)
consolidations, mergers and transfers of all or substantially all of the assets
of the Company. The Indenture also requires certain mandatory offers to purchase
the Notes in the event of a Change of Control (as defined) of the Company and
certain sales of assets. The net proceeds of the offering are expected to be
used primarily for working capital purposes, expansion of the Company's existing
businesses, and possible investments in or acquisitions of new business. The
securities were placed privately with a group of institutional investors in a
transaction exempt from registration under the Securities Act of 1933, as
amended (the "Act"). The Company has agreed to exchange the Notes for similar
Notes registered under the Act and/or to register the Notes and Warrants under a
shelf registration statement.
Item 7(c) Exhibits
The Exhibits to this Current Report on Form 8-K are listed in the
Exhibit Index which appears elsewhere herein and is incorporated herein by
reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be on its behalf by the
undersigned hereunto duly authorized.
AMPEX CORPORATION
Date: January 30 , 1998 By: /s/ Craig L. McKibben
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Craig L. McKibben
Vice President, Chief Financial
Officer and Treasurer
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EXHIBIT INDEX
Exhibit No. Exhibit Description
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1.1 Purchase Agreement, dated January 26, 1998,
between the Registrant and First Albany
Corporation, as Initial Purchaser (the
"Initial Purchaser")
4.1 Indenture, dated as of January 28, 1998,
between the Registrant and IBJ Schroder Bank
& Trust Company, as trustee, including forms
of 12% Senior Notes
4.2 Warrant Agreement, dated as of January 28,
1998, between the Registrant and American
Stock Transfer & Trust Company, as warrant
agent, including form of Warrant Certificate.
4.3 Exchange and Registration Rights Agreement,
dated as of January 28 , 1998, between the
Registrant and the Initial Purchaser
4.4 Warrant and Warrant Shares Registration
Rights Agreement, dated as of January 28,
1998, between the Registrant and the Initial
Purchaser
677559.1
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EXHIBIT 1.1
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AMPEX CORPORATION
(a Delaware corporation)
$30,000,000
12% Senior Notes Due 2003
and
Warrants to Purchase up to
1,020,000 Class A Common Shares
($0.01 par value per share)
---------------------------------------------
PURCHASE AGREEMENT
---------------------------------------------
Dated: January 26, 1998
================================================================================
679049.1
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Table of Contents
PURCHASE AGREEMENT......................................................... 1
SECTION 1. Representations and Warranties............................ 2
(a) Representations and Warranties by the Company............. 2
(i) Similar Offerings................................. 2
(ii) Offering Memorandum............................... 3
(iii) Incorporated Documents............................ 3
(iv) Independent Accountants........................... 3
(v) Financial Statements.............................. 3
(vi) No Material Adverse Change in Business............ 4
(vii) Good Standing of the Company...................... 4
(viii) Good Standing of Significant Subsidiaries......... 4
(ix) Capitalization.................................... 4
(x) Authorization of Agreement........................ 5
(xi) Authorization of Registration Rights Agreements... 5
(xii) Authorization of the Indenture.................... 5
(xiii) Authorization of the Warrant Agreement............ 5
(xiv) Authorization of the Notes........................ 5
(xv) Authorization of the Warrants..................... 6
(xvi) Authorization and Valid Issuance of
the Warrant Shares................................ 6
(xviii) Absence of Defaults and Conflicts................. 6
(xix) Absence of Labor Dispute.......................... 7
(xx) Absence of Proceedings............................ 7
(xxi) Possession of Intellectual Property............... 7
(xxii) Absence of Further Requirements................... 8
(xxiii) Possession of Licenses and Permits................ 8
(xxiv) Title to Property................................. 8
(xxv) Tax Returns....................................... 9
(xxvi) Insurance......................................... 9
(xxvii) ERISA Matters..................................... 9
(xxix) Investment Company Act............................ 10
(xxx) Rule 144A Eligibility............................. 10
(xxxi) No General Solicitation........................... 10
(xxxii) No Registration Required.......................... 10
(b) Officer's Certificates.................................... 10
SECTION 2. Sale and Delivery to Initial Purchaser; Closing........... 11
(a) Securities................................................ 11
(b) Payment................................................... 11
(c) Qualified Institutional Buyer............................. 11
(d) Denominations; Registration............................... 11
SECTION 3. Covenants of the Company.................................. 11
(a) Offering Memorandum....................................... 11
(b) Notice and Effect of Material Events...................... 12
(c) Amendment to Offering Memorandum and Supplements.......... 12
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(d) Qualification of Securities for Offer and Sale............ 12
(e) DTC....................................................... 12
(f) Use of Proceeds........................................... 12
SECTION 4. Payment of Expenses....................................... 13
(a) Expenses.................................................. 13
(b) Termination of Agreement.................................. 13
SECTION 5. Conditions of Initial Purchaser's Obligations............. 13
(a) Opinion of Counsel for the Company........................ 13
(b) Opinion of Patent Counsel for the Company................. 14
(c) Opinion of Counsel for Initial Purchaser.................. 14
(d) Officers' Certificate..................................... 14
(e) Accountant's Comfort Letter............................... 14
(f) Bring-down Comfort Letter................................. 14
(g) Registration Rights Agreements............................ 15
(h) PORTAL.................................................... 15
(i) Additional Documents...................................... 15
(j) Termination of Agreement.................................. 15
SECTION 6. Subsequent Offers and Resales of the Securities........... 15
(a) Offer and Sale Procedures................................. 15
(i) Offers and Sales only to Institutional Accredited
Investors and Qualified Institutional Buyers........ 15
(ii) No General Solicitation............................. 15
(iii) Purchases by Non-Bank Fiduciaries................... 16
(iv) Subsequent Purchaser Notification................... 16
(v) Minimum Principal Amount............................ 16
(vi) Restrictions on Transfer............................ 16
(b) Covenants of the Company.................................. 17
(i) Due Diligence....................................... 17
(ii) Integration......................................... 17
(iii) Rule 144A Information............................... 17
(iv) Restriction on Repurchases.......................... 17
SECTION 7. Indemnification........................................... 18
(a) Indemnification of Initial Purchaser...................... 18
(b) Indemnification of Company, Directors and Officers........ 18
(c) Actions against Parties; Notification..................... 19
SECTION 8. Contribution.............................................. 19
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery.......................................... 20
SECTION 10. Termination of Agreement.................................. 21
(a) Termination; General...................................... 21
(b) Liabilities............................................... 21
SECTION 11. Notices................................................... 21
SECTION 12. Parties................................................... 21
SECTION 13. GOVERNING LAW AND TIME.................................... 22
SECTION 14. Effect of Headings........................................ 22
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Exhibit A FORM OF OPINION OF COMPANY'S COUNSEL........................A-1
Exhibit B FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY...........B-1
Exhibit C FORM OF OPINION OF PATENT COUNSEL OF THE COMPANY............C-1
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$30,000,000
12% Senior Notes Due 2003
and
Warrants to Purchase up to
1,020,000 Class A Common Shares
($0.01 par value per share)
AMPEX CORPORATION
(a Delaware corporation)
PURCHASE AGREEMENT
January 26, 1998
FIRST ALBANY CORPORATION
One Penn Plaza
New York, New York 10119
Ladies and Gentlemen:
Ampex Corporation, a Delaware corporation (the "Company"), confirms its
agreement with First Albany Corporation (the "Initial Purchaser"), with respect
to the issue and sale by the Company and the purchase by the Initial Purchaser
of $30,000,000 aggregate principal amount of the Company's 12% Senior Notes Due
2003 (the "Notes"), and warrants (the "Warrants") to purchase 1,020,000 shares
(the "Warrant Shares") of the Class A Common Stock, par value $0.01 per share,
of the Company expiring March 15, 2003. The Notes and the Warrants are
collectively hereinafter referred to as the "Securities". The Notes are to be
issued pursuant to an Indenture dated as of January 28, 1998 (the "Indenture"),
between the Company and IBJ Schroder Bank & Trust Company, as trustee (the
"Trustee"). The Warrants are to be issued pursuant to a Warrant Agreement dated
as of January 28, 1998 (the "Warrant Agreement"), between the Company and
American Stock Transfer & Trust Company, as warrant agent (the "Warrant Agent").
The purchase price for Warrant Shares upon exercise of Warrants will be $2.25
per share (the "Exercise Price"), subject to adjustment in certain events as
specified in the Warrant Agreement. Notes issued in book-entry form will be
issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant
to a letter agreement, to be dated as of the Closing Time (as defined below in
Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC.
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The Company understands that the Initial Purchaser proposes to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are to
be offered and sold through the Initial Purchaser without being registered under
the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon
exemptions therefrom. Pursuant to the terms of the Securities and the Indenture,
investors that acquire Securities may only resell or otherwise transfer such
Securities if such Securities are hereafter registered under the 1933 Act or if
an exemption from the registration requirements of the 1933 Act is available
(including the exemption afforded by Rule 144A ("Rule 144A") of the rules and
regulations promulgated under the 1933 Act by the Securities and Exchange
Commission (the "Commission")).
The Company has prepared and delivered to the Initial Purchaser copies of a
preliminary offering memorandum dated January 21, 1998 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to the Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated January 23, 1998 (the "Final Offering Memorandum"),
each for use by the Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Securities. "Offering Memorandum" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including exhibits thereto, which has been prepared and delivered by the Company
to the Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities.
The holders of Notes will be entitled to the benefits of a Registration
Rights Agreement between the Company and the Initial Purchaser (the "Notes
Registration Rights Agreement"), pursuant to which the Company will file a
registration statement (the "Registration Statement") with the Commission
registering the Securities or the Exchange Securities referred to in the
Registration Rights Agreement under the 1933 Act. The holders of Warrants will
be entitled to the benefits of a Registration Rights Agreement between the
Company and the Initial Purchaser (the "Warrants Registration Rights
Agreement"), pursuant to which the Company will file a shelf registration
statement (the "Shelf Registration Statement") with the Commission registering
the Securities under the 1933 Act. The Notes Registration Rights Agreement and
the Warrant Registration Rights Agreement are collectively hereinafter referred
to as the "Registration Rights Agreements".
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Initial Purchaser as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with the Initial
Purchaser as follows:
(i) Similar Offerings. The Company has not, directly or indirectly,
solicited any offer to buy or offered to sell, and will not, directly or
indirectly, solicit any offer to buy or offer to sell, in the United States
or to any United States citizen or resident,
679049.1
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any security which is or would be integrated with the sale of the
Securities in a manner that would require the Securities to be registered
under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does not, and at the
Closing Time will not, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement shall
not apply to statements in or omissions from the Offering Memorandum made
in reliance upon and in conformity with written information furnished to
the Company in writing by the Initial Purchaser expressly for use in the
Offering Memorandum.
(iii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Offering Memorandum at the time they
were or hereafter are filed with the Commission complied and will comply in
all material respects with the requirements of the 1934 Act and the rules
and regulations of the Commission thereunder, and when read together with
the other information in the Offering Memorandum, at the date of the
Offering Memorandum and at the Closing Time, do not and will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(iv) Independent Accountants. The accountants who certified certain of
the financial statements and supporting schedules included in the Offering
Memorandum are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of Regulation S-X under the
1933 Act.
(v) Financial Statements. The financial statements, together with the
related schedules and notes, included in the Offering Memorandum present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of income,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved,
except as indicated therein or in the notes thereto. The supporting
schedules, if any, included in the Offering Memorandum present fairly in
accordance with GAAP the information required to be stated therein. The
selected consolidated historical financial data included in the Offering
Memorandum present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Offering Memorandum. The pro forma financial
information of the Company and its subsidiaries and the related notes
thereto included in the Offering Memorandum present fairly the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the
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assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(vi) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (A) there has been no material adverse change,
and no development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings or business of the
Company and its subsidiaries considered as one enterprise (a "Material
Adverse Effect"), whether or not arising in the ordinary course of
business, (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(vii) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(viii) Good Standing of Significant Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Significant Subsidiary") has been duly organized
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; all of the issued and outstanding capital
stock of each Significant Subsidiary (other than Ampex Holdings
Corporation, which was incorporated on January 20, 1998 and is being
capitalized as described in the Offering Memorandum) has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of the Significant
Subsidiaries was issued in violation of any preemptive or similar rights
arising by operation of law, or under the charter or by-laws of any
Significant Subsidiary or under any agreement to which the Company or any
Significant Subsidiary is a party.
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(ix) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Offering Memorandum under the
caption "Capitalization" as of the date set forth therein, and except as
set forth in the Offering Memorandum, there have been no material changes
thereto.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Authorization of Registration Rights Agreements. Each of the
Registration Rights Agreements has been duly authorized by the Company and,
at the Closing Time, will have been duly executed and delivered by the
Company and will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and except that rights to indemnification and
contribution thereunder may be limited by applicable law.
(xii) Authorization of the Indenture. The Indenture has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other similar laws
relating to or affecting enforcement of creditors' rights generally, or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xiii) Authorization of the Warrant Agreement. The Warrant Agreement
has been duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or other similar laws
relating to or affecting enforcement of creditors' rights generally, or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xiv) Authorization of the Notes. The Notes have been duly authorized
and, at the Closing Time, will have been duly executed by the Company and,
when authenticated in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof
may
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be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or other
similar laws relating to or affecting enforcement of creditors' rights
generally, or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be
in the form contemplated by, and entitled to the benefits of, the
Indenture.
(xv) Authorization of the Warrants. The Warrants have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated in the manner provided for in the Warrant
Agreement and delivered against payment of the purchase price therefor will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers)
reorganization, moratorium or other similar laws relating to or affecting
enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be in the form contemplated by, and entitled to
the benefits of, the Warrant Agreement.
(xvi) Authorization and Valid Issuance of the Warrant Shares. (1) The
Company has sufficient shares authorized and has reserved for issuance
shares of Class A Common Stock which may be issued upon exercise of the
Warrants; (2) the issuance of the Warrant Shares and Warrants are not
subject to preemptive rights; (3) the Warrant Shares, when issued against
payment of the Exercise Price, will be duly authorized, validly issued and
will be fully paid and non-assessable.
(xvii) Description of the Notes, the Warrants, the Indenture, the
Warrant Agreement, the Warrant Shares and the Registration Rights
Agreements. The Notes, the Warrants, the Warrant Agreement, the Warrant
Shares, the Indenture and each of the Registration Rights Agreements will
conform in all material respects to the respective statements relating
thereto contained in the Offering Memorandum and will be in substantially
the respective forms previously delivered to the Initial Purchaser.
(xviii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively, "Agreements
and Instruments") except as set forth in the Offering Memorandum with
respect to the Company's 8% Noncumulative Preferred Stock, and except for
such defaults and, in the case of the Company's subsidiaries only, such
violations that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, each of the
Registration Rights Agreements, the Indenture, the Warrant Agreement and
the Securities and any other agreement or instrument entered
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into or issued or to be entered into or issued by the Company in connection
with the transactions contemplated hereby or thereby or in the Offering
Memorandum and the consummation of the transactions contemplated herein,
therein and in the Offering Memorandum (including the issuance and sale of
the Securities, the use of the proceeds from the sale of the Securities as
described in the Offering Memorandum under the caption "Use of Proceeds"
and the filing of the Registration Statement and Shelf Registration
Statement) and compliance by the Company with its obligations hereunder,
and under each of the Registration Rights Agreements, the Indenture, the
Warrant Agreement and the Securities have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or a Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that,
singly or in the aggregate, would not result in a Material Adverse Effect,
nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or
any of their assets or properties. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any of its
subsidiaries.
(xix) Absence of Labor Dispute. To the Company's knowledge, no labor
dispute with the employees of the Company or any of its subsidiaries exists
or is imminent, and to the Company's knowledge (without independent
investigation), there is no existing or imminent labor disturbance by the
employees of any if its principal suppliers which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xx) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or investigation
before or by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets of
the Company or any of its subsidiaries or the consummation of this
Agreement or the performance by the Company of its obligations hereunder.
The aggregate of all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective property or assets is the subject which are not described or
generally referred to in the Offering Memorandum, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
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(xxi) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and, except as disclosed in the Offering Memorandum,
neither the Company nor any of its subsidiaries has received any notice or
is otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict or invalidity or
inadequacy, singly or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect; and the use, in connection with the
business and operations of the Company and its subsidiaries, of such
trademarks, service marks, trade names, patents, patent rights, licenses,
inventions, copyrights and know-how does not violate or infringe any
trademark, trade name, contract, agreement, patent, patent right, copyright
or license of any person, firm, corporation or association whatsoever.
(xxii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
(other than under state securities laws, or the 1933 Act and the rules and
regulations thereunder or the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the Registration
Rights Agreement and the transactions contemplated hereunder or thereunder)
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement.
(xxiii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to possess any such Governmental Licenses could not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect;
the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect; all of the Governmental Licenses are valid
and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect could not reasonably be expected to have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
could reasonably be expected to result in a Material Adverse Effect.
679049.1
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(xxiv) Title to Property. The Company and its subsidiaries have good
title to all material property owned by the Company and its subsidiaries,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such as
(a) are described in the Offering Memorandum or (b) do not, singly or in
the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Offering Memorandum, are in full force
and effect, and neither the Company nor any of its subsidiaries has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any of its subsidiaries under any
of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any of its subsidiaries to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xxv) Tax Returns. The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be filed
or have duly requested extensions thereof and have paid all taxes required
to be paid by any of them and any related assessments, fines or penalties,
except for any such tax, assessment, fine or penalty that is being
contested in good faith and by appropriate proceedings; and adequate
charges, accruals and reserves have been provided for in the financial
statements referred to in Section 1(a)(v) above in respect of all federal,
state, local and foreign taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally
determined or remains open to examination by applicable taxing authorities.
(xxvi) Insurance. The Company and each of its subsidiaries and their
respective properties are insured in such amounts against such losses and
with such insurers as the Company believes are prudent when considered in
light of the nature of the properties and businesses of the Company and its
subsidiaries.
(xxvii) ERISA Matters. The Company is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to incur
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
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(xxviii) Environmental Laws. Except as described or generally referred
to in the Offering Memorandum and except such matters as could not, singly
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, to the best of the Company's knowledge, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or
Environmental Laws.
(xxix) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxx) Rule 144A Eligibility. The Securities are not, and at the
Closing Time will not be, of the same class as securities listed on a
national securities exchange registered under Section 6 of the 1934 Act or
quoted in a U.S. automated interdealer quotation system.
(xxxi) No General Solicitation. None of the Company, its affiliates,
as such term is defined in Rule 501(b) under the 1933 Act ("Affiliates"),
or any person acting on its or any of their behalf (other than the Initial
Purchaser, as to whom the Company makes no representation) has engaged or
will engage, in connection with the offering of the Securities, in any form
of general solicitation or general advertising within the meaning of Rule
502(c) under the 1933 Act.
(xxxii) No Registration Required. Subject to compliance by the Initial
Purchaser with the representations and warranties set forth in Section 2
and the procedures set forth in Section 6 hereof, it is not necessary in
connection with the offer, sale and delivery
679049.1
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of the Securities to the Initial Purchaser and to each Subsequent Purchaser
in the manner contemplated by this Agreement and the Offering Memorandum to
register the Securities under the 1933 Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Initial Purchaser or to
counsel for the Initial Purchaser shall be deemed a representation and warranty
by the Company to the Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, at the price set forth in Schedule A, $30,000,000
aggregate principal amount of Notes, and 1,020,000 Warrants.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of Brown & Wood
LLP, One World Trade Center, New York, New York 10048, or at such other place as
shall be agreed upon by the Initial Purchaser and the Company, at 10:00 A.M. on
the second business day after the date hereof, or such other time not later than
ten (10) business days after such date as shall be agreed upon by the Initial
Purchaser and the Company (such time and date of payment and delivery being
herein called the "Closing Time").
Payment of the purchase price for the Securities shall be made to the
Company by wire transfer of immediately available funds to a bank account
designated by the Company, against delivery to the Initial Purchaser of
certificates for the Securities to be purchased by it. Certificates for Notes
shall be in such denominations, not less than $1,000 each, and registered in
such names as the Initial Purchaser may request in writing at least one full
business day before the Closing Time, which writing shall specify the
denomination of any certificate to be issued in global form representing Notes
resold to Qualified Institutional Buyers (as defined in Section 6(a)(i)) and the
denomination of any certificate to be issued in registered, certificated form
representing the Notes resold to Accredited Investors (as defined in Section
6(a)(i)). Any certificates representing the Notes resold to Qualified
Institutional Buyers shall be shall be registered in the name of Cede & Co. as
nominee of DTC pursuant to the DTC Agreement. All certificates for the
Securities shall be made available for examination and packaging by the Initial
Purchaser in The City of New York not later than 10:00 A.M. on the last business
day prior to the Closing Time.
(c) Qualified Institutional Buyer. The Initial Purchaser represents and
warrants to, and agrees with, the Company that it is a "qualified institutional
buyer" within the meaning of Rule 144A under the 1933 Act and an "accredited
investor" within the meaning of Rule 501(a) under the 1933 Act.
679049.1
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(d) Denominations; Registration. Certificates for the Warrants shall be in
such denominations and registered in such names as the Initial Purchaser may
request in writing at least one full business day before the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will furnish
to the Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as the Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will promptly notify
the Initial Purchaser, and confirm such notice in writing, of (x) any filing
made by the Company of information relating to the offering of the Securities
with any securities exchange or any other regulatory body in the United States
or any other jurisdiction, and (y) prior to the completion of the placement of
the Securities by the Initial Purchaser as evidenced by a notice in writing from
the Initial Purchaser to the Company, which the Initial Purchaser hereby
undertakes to deliver to the Company as promptly as practicable, any material
changes in or affecting, or any developments involving prospective material
changes in or affecting, the earnings or business of the Company and its
subsidiaries considered as one enterprise which (i) make any statement in the
Offering Memorandum false or misleading or (ii) are not disclosed in the
Offering Memorandum. In such event or if during such time any event shall occur
as a result of which it is necessary, in the reasonable opinion of the Company,
its counsel, the Initial Purchaser or counsel for the Initial Purchaser, to
amend or supplement the Final Offering Memorandum in order that the Final
Offering Memorandum not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances then existing, the Company will
forthwith amend or supplement the Final Offering Memorandum by preparing and
furnishing to the Initial Purchaser an amendment or amendments of, or a
supplement or supplements to, the Final Offering Memorandum (in form and
substance satisfactory in the reasonable opinion of counsel for the Initial
Purchaser) so that, as so amended or supplemented, the Final Offering Memorandum
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances existing at the time it is delivered to a Subsequent
Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise the Initial Purchaser promptly of any proposal to amend or supplement the
Offering Memorandum and will not effect such amendment or supplement without the
consent of the Initial Purchaser. Neither the consent of the Initial Purchaser,
nor the Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will use
its best efforts, in cooperation with the Initial Purchaser, to qualify the
Securities for offering and sale under the
679049.1
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applicable securities laws of such jurisdictions as the Initial Purchaser may
designate and will maintain such qualifications in effect as long as required
for the sale of the Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(e) DTC. The Company will cooperate with the Initial Purchaser and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(f) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds".
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and any filing of the Offering Memorandum (including financial statements and
any schedules or exhibits and any document incorporated therein by reference)
and of each amendment or supplement thereto, (ii) the preparation, printing and
delivery to the Initial Purchaser of this Agreement, the Indenture, the Warrant
Agreement and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the Initial
Purchasers, including any charges of DTC in connection therewith; (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Initial Purchaser in connection therewith
and in connection with the preparation of the Blue Sky Survey, any supplement
thereto and any Legal Investment Survey, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Warrant Agreement and the Securities, and
(vii) any fees and expenses relating to the eligibility of the Notes for
clearance and settlement through the facilities of DTC and (vi) fees and
expenses relating to the initial and continued designation of the Notes as
PORTAL securities under the PORTAL Market Rules pursuant to NASD Rule 5322.
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchaser in accordance with the provisions of Section 5 or Section
10(a)(i) hereof (except by reason of a default by the Initial Purchaser), the
Company shall reimburse the Initial Purchaser for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Initial Purchaser.
SECTION 5. Conditions of Initial Purchaser's Obligations. The obligations
of the Initial Purchaser hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of
679049.1
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its subsidiaries delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Opinion of Counsel for the Company. At the Closing Time, the Initial
Purchaser shall have received the favorable opinions, dated as of the Closing
Time, of (i) Battle Fowler, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Initial Purchaser, to the effect set
forth in Exhibit A hereto (with such changes as may be agreed to by the parties
after the date hereof) and (ii) the Corporate Counsel of the Company, in form
and substance reasonably satisfactory to counsel for the Initial Purchaser, to
the effect set forth in Exhibit B hereto (with such changes as may be agreed to
by the parties after the date hereof).
(b) Opinion of Patent Counsel for the Company. At the Closing Time, the
Initial Purchaser shall have received a favorable opinion, dated as of the
Closing Time, of the Patent Counsel of the Company, in form and substance
reasonably satisfactory to counsel for the Initial Purchaser, to the effect set
forth in Exhibit C hereto (with such changes as may be agreed to by the parties
after the date hereof).
(c) Opinion of Counsel for Initial Purchaser. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of Brown & Wood LLP, counsel for the Initial Purchaser, with
respect to the issuance of the Securities and such other related matters as the
Initial Purchaser may require. In giving such opinion such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Initial Purchaser. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(d) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Offering Memorandum, any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings or business of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Initial Purchaser shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of the Closing
Time, to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the Closing
Time, and (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Time.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchaser shall have received from Coopers & Lybrand
L.L.P. a letter dated such date, in form and substance reasonably satisfactory
to the Initial Purchaser, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to Initial Purchaser with
679049.1
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respect to the financial statements and certain financial information contained
in the Offering Memorandum.
(f) Bring-down Comfort Letter. At the Closing Time, the Initial Purchaser
shall have received from Coopers & Lybrand L.L.P. a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(g) Registration Rights Agreements. At the Closing Time, each of the
Registration Rights Agreements shall have been fully executed and delivered by
the Company.
(h) PORTAL. At the Closing Time, the Notes shall have been designated for
trading on PORTAL.
(i) Additional Documents. At the Closing Time, counsel for the Initial
Purchaser shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Initial Purchaser
and counsel for the Initial Purchaser.
(j) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 7 and 8 shall survive any such termination and remain in
full force and effect.
SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. The Initial Purchaser and the Company hereby
establish and agree to observe the following procedures in connection with the
offer and sale of the Securities:
(i) Offers and Sales only to Institutional Accredited Investors and
Qualified Institutional Buyers. Offers and sales of the Securities will be
made only by the Initial Purchaser or Affiliates thereof qualified to do so
in the jurisdictions in which such offers or sales are made. Each such
offer or sale shall only be made to (A) persons whom the offeror or seller,
or any person acting on behalf of the offeror or seller, reasonably
believes to be qualified institutional buyers (as defined in Rule 144A
under the Securities Act, "Qualified Institutional Buyers") or (B) a
limited number of other institutional accredited investors (as such term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D, "Institutional
Accredited Investors") that, with respect to offers, the offeror or seller
reasonably believes
679049.1
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to be, and with respect to sales and deliveries, that are such
Institutional Accredited Investors.
(ii) No General Solicitation. The Securities will be offered by
approaching prospective Subsequent Purchasers on an individual basis. No
general solicitation or general advertising (within the meaning of Rule
502(c) under the 1933 Act) will be used in the United States in connection
with the offering of the Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, in connection with an offer and sale to such purchaser
pursuant to clause (a) above, each such third party shall, in the judgment
of the applicable Initial Purchaser, be a Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. The Initial Purchaser will
take reasonable steps to inform persons acquiring Securities from the
Initial Purchaser that the Securities (A) have not been and will not be
registered under the 1933 Act, (B) are being sold to them without
registration under the 1933 Act in reliance on Rule 144A or in accordance
with another exemption from registration under the 1933 Act, as the case
may be, and (C) may not be offered, sold or otherwise transferred prior to
the earlier of (x) the date when such Securities can be sold pursuant to
Rule 144 under the 1933 Act without any limitations under clauses (c), (e),
(f) and (h) of Rule 144 and (y) the date which is three years after the
later of the original issuance date thereof and the last date on which the
Company or any "affiliate" of the Company was the owner of such Securities
(or any predecessor Securities), except (1) to the Company, (2) pursuant to
a registration statement which has been declared effective under the 1933
Act, (3) as long as the Securities are eligible for resale pursuant to Rule
144A, to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for its own account
or for the account of a Qualified Institutional Buyer to whom notice is
given that the offer, sale or transfer is being made in reliance on Rule
144A or (4) pursuant to any other available exemption from the registration
requirements of the 1933 Act.
(v) Minimum Principal Amount. No sale of the Notes to any one
Subsequent Purchaser will be for less than U.S. $1,000 principal amount and
no Note will be issued in a smaller principal amount. If the Subsequent
Purchaser is a non-bank fiduciary acting on behalf of others, each person
for whom it is acting must purchase at least U.S. $1,000 principal amount
of the Notes.
(vi) Restrictions on Transfer. The transfer restrictions and the other
provisions set forth in Section 1.5 of the Indenture and Section 2.7 of the
Warrant Agreement, including the legend required thereby, shall apply to
the Notes and Warrants, respectively, except as otherwise agreed by the
Company and the Initial Purchaser. Following the sale of the Securities by
the Initial Purchaser to Subsequent Purchasers pursuant to the terms
hereof, the Initial Purchaser shall not be liable or responsible to the
Company for any losses, damages or liabilities
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suffered or incurred by the Company, including any losses, damages or
liabili ties under the 1933 Act, arising from or relating to any resale or
transfer of any Security, except those arising from or relating to any
breach of the obligations hereunder of the Initial Purchaser.
(vii) Delivery of Offering Memorandum. The Initial Purchaser will
deliver to each purchaser of the Securities from the Initial Purchaser, in
connection with its original distribution of the Securities, a copy of the
Offering Memorandum, as amended and supplemented at the date of such
delivery.
(b) Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:
(i) Due Diligence. In connection with the original distribution of the
Securities, the Company agrees that, prior to any offer or resale of the
Securities by the Initial Purchaser, the Initial Purchaser and counsel for
the Initial Purchaser shall have the right to make reasonable inquiries
into the business of the Company and its subsidiaries. The Company also
agrees to provide answers to each prospective Subsequent Purchaser of
Securities who so requests concerning the Company and its subsidiaries (to
the extent that such information is available or can be acquired and made
available to prospective Subsequent Purchasers without unreasonable effort
or expense and to the extent the provision thereof is not prohibited by
applicable law) and the terms and conditions of the offering of the
Securities, as provided in the Offering Memorandum.
(ii) Integration. The Company agrees that it will not and will cause
its Affiliates not to make any offer or sale of securities of the Company
of any class if, as a result of the doctrine of "integration" referred to
in Rule 502 under the 1933 Act, such offer or sale would render invalid
(for the purpose of (i) the sale of the Securities by the Company to the
Initial Purchaser, (ii) the resale of the Securities by the Initial
Purchaser to Subsequent Purchasers or (iii) the resale of the Securities by
such Subsequent Purchasers to others) the exemption from the registration
requirements of the 1933 Act provided by Section 4(2) thereof or by Rule
144A thereunder or otherwise.
(iii) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities remain outstanding, it will make
available, upon request, to any holder of Securities or prospective
purchasers of Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "Additional Information").
(iv) Restriction on Repurchases. Until the expiration of three years
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not to, purchase or agree to purchase or
otherwise acquire any Securities which are "restricted
679049.1
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securities" (as such term is defined under Rule 144(a)(3) under the 1933
Act), whether as beneficial owner or otherwise (except as agent acting as a
securities broker on behalf of and for the account of customers in the
ordinary course of business in unsolicited broker's transactions) unless,
immediately upon any such purchase, the Company or any Affiliate shall
submit such Securities to the Trustee for cancellation.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchaser. The Company agrees to indemnify
and hold harmless the Initial Purchaser and each person, if any, who controls
the Initial Purchaser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (or any amendment or supplement
thereto) or in any Additional Information, or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
7(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Initial Purchaser),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
or supplement thereto).
(b) Indemnification of Company, Directors and Officers. The Initial
Purchaser agrees to indemnify and hold harmless the Company, its directors and
officers, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity
679049.1
18
<PAGE>
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Offering Memorandum in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchaser expressly for use
in the Offering Memorandum (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced or threatened against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 7(a)
above, counsel to the indemnified parties shall be selected by the Initial
Purchaser, and, in the case of parties indemnified pursuant to Section 7(b)
above, counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
SECTION 8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchaser on the other hand from the offering of the
Securities pursuant to this Agreement and the relative fault of the Company on
the one hand and of the Initial Purchaser on the other hand in connection with
the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be
679049.1
19
<PAGE>
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the Initial Purchaser, bear to the aggregate initial offering price of the
Securities.
The relative fault of the Company on the one hand and the Initial Purchaser
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
the Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Initial
Purchaser, and each director and officer of the Company, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.
SECTION 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Initial Purchaser or controlling person, or by or on behalf
of the Company, and shall survive delivery of the Securities to the Initial
Purchaser.
679049.1
20
<PAGE>
SECTION 10. Termination of Agreement.
(a) Termination; General. The Initial Purchaser may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings or business of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the reasonable judgment of the Initial Purchaser,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in the Securities has been suspended or
limited by the Commission, or if trading generally on the American Stock
Exchange or the New York Stock Exchange or in the NASDAQ National Market System
has been suspended or limited (other than in accordance with New York Stock
Exchange Rules 80A and 80B or any similar rules of the American Stock Exchange
or the NASDAQ National Market System regarding limitations on trading during
significant market declines and extraordinary market volatility), or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 7 and
8 shall survive such termination and remain in full force and effect.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchaser shall be directed to the First Albany Corporation at One Penn Plaza,
New York, New York 10119, attention of Frank Lunn, with a copy to Brown & Wood
LLP, One World Trade Center, New York, New York 10048, attention of Mitchell
Kleinman; notices to the Company shall be directed to it at 500 Broadway,
Redwood City, California 94063- 3199, attention of Chief Financial Officer, with
a copy to Battle Fowler LLP, 75 East 55th Street, New York, New York 10022,
attention of David D. Griffin.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchaser and the Company and their respective successors and the
controlling
679049.1
21
<PAGE>
persons and officers and directors referred to in Sections 7 and 8 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Initial Purchaser and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
679049.1
22
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchaser and the Company in accordance with its terms.
Very truly yours,
AMPEX CORPORATION
By /s/ CRAIG L. MCKIBBEN
-------------------------------------
Name: Craig L. McKibben
Title: Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
FIRST ALBANY CORPORATION
By /s/ FRANK P. LUNN
----------------------------------
Authorized Signatory
679049.1
23
<PAGE>
SCHEDULE A
AMPEX CORPORATION
$30,000,000
12% Senior Notes Due 2003
and
1,020,000 Warrants to Purchase up to
1,020,000 Class A Common Shares
($0.01 par value per share)
1. The initial offering price of the Notes shall be 100% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Initial Purchaser for the Notes
shall be 97% of the principal amount thereof.
3. The interest rate on the Notes shall be 12% per annum.
4. There is no separate consideration being paid for the Warrants.
679049.1
Sch A - 1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(i)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under the Purchase
Agreement, the Indenture, the Warrant Agreement and each of the Registration
Rights Agreements.
3. Each Significant Subsidiary has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; all of the issued and
outstanding capital stock of each Significant Subsidiary (other than Ampex
Holdings Corporation, which was incorporated on January 20, 1998 and is being
capitalized as described in the Offering Memorandum) has been duly authorized
and validly issued, is fully paid and non-assessable and, to the best of our
knowledge, is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of the Significant
Subsidiaries was issued in violation of any preemptive or similar rights arising
by operation of law, or under the charter or by-laws of any Significant
Subsidiary or under any agreement to which the Company or any Significant
Subsidiary is a party.
4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Offering Memorandum under the caption "Capitalization" as of
the date set forth therein, and except as set forth in the Offering Memorandum,
there have been no material changes thereto; the shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
5. The Notes, the Warrants, the Indenture, the Warrant Agreement and each
of the Registration Rights Agreements conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.
679049.1
A-1
<PAGE>
6. The information in the Offering Memorandum under the captions
"Description of the Notes" and "Description of the Warrants", to the extent that
it constitutes summaries of legal matters, or legal conclusions, has been
reviewed by us and is correct in all material respects.
7. The statements in the Offering Memorandum, insofar as they purport to
describe certain aspects of contracts and other documents to which the Company
or any of its subsidiaries are a party, are accurate in all material respects
(as to such descriptions).
8. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, (other than such as may be required under the
applicable securities laws of the various jurisdictions in which the Securities
will be offered or sold, as to which we express no opinion) is necessary or
required in connection with the due authorization, execution and delivery of the
Purchase Agreement or the Registration Rights Agreement or the due execution,
delivery or performance of the Indenture by the Company or for the offering,
issuance, sale or delivery of the Securities to the Initial Purchasers or the
resale by the Initial Purchasers in accordance with and in the manner
contemplated by the Purchase Agreement.
9. It is not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers and to each Subsequent Purchaser in
accordance with and in the manner contemplated by the Purchase Agreement and the
Offering Memorandum to register the Securities under the 1933 Act (other than
with respect to the Registration Rights Agreement and the transactions
contemplated thereunder) or to qualify the Indenture under the Trust Indenture
Act.
10. The Company is not an "investment company" as such term is defined in
the 1940 Act.
Nothing has come to our attention that would lead us to believe that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein, as to which we make no statement), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Offering Memorandum or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included or
incorporated by reference therein, as to which we make no statement at the time
the Offering Memorandum was issued), at the time the Offering Memorandum was
issued, at the time any such amended or supplemented Offering Memorandum was
issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
679049.1
A-2
<PAGE>
Exhibit B
FORM OF OPINION OF CORPORATE COUNSEL
OF THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 5(a)(ii)
1. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
2. The Purchase Agreement has been duly authorized, executed and delivered
by the Company.
3. Each of the Registration Rights Agreements has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws relating to or affecting enforcement
of creditors' rights generally, or by general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law), and
except that rights to indemnification and contribution thereunder may be limited
by applicable law.
4. The Indenture has been duly authorized, executed and delivered by the
Company and (assuming the due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
5. The Warrant Agreement has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and delivery
thereof by the Warrant Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
6. The Notes are in the form contemplated by the Indenture, have been duly
authorized by the Company and, assuming that the Notes have been duly
authenticated by the Trustee pursuant to the
679049.1
B-1
<PAGE>
Indenture and in the manner described in its certificate delivered to you today,
the Notes have been duly executed, issued and delivered by the Company and
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditor's rights generally, or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law), and will be entitled to the benefits of the
Indenture.
7. The Warrants are in the form contemplated by the Warrant Agreement, have
been duly authorized by the Company and, assuming that the Warrants have been
issued pursuant to the Warrant Agreement and in the manner described in its
certificate delivered to you today, the Warrants have been duly executed, issued
and delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditor's rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), and will
be entitled to the benefits of the Warrant Agreement.
8. The Company has sufficient shares authorized and has reserved for
issuance shares of Class A Common Stock which may be issued upon exercise of the
Warrants.
9. The issuance of Warrant Shares and Warrants are not subject to
preemptive rights.
10. The Warrant Shares, when issued against payment of the Exercise Price,
will be duly authorized, validly issued and will be fully paid and
non-assessable.
11. To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
of its subsidiaries is a party, or to which the property of the Company or any
of its subsidiaries is subject, before or brought by any court or governmental
agency or body, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Company and its subsidiaries
considered as one enterprise or the consummation of the transactions
contemplated in the Purchase Agreement or the Registration Rights Agreement or
the performance by the Company of its obligations thereunder or the transactions
contemplated by the Offering Memorandum;
12. To the best of my knowledge, neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws (except as set forth in
the Offering Memorandum with respect to the Company's 8% Noncumulative Preferred
Stock, and, in the case of the Company's subsidiaries only, for such violations
that, singly or in the aggregate, would not result in a Material Adverse Effect)
and no default by the Company or any of its subsidiaries exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
679049.1
B-2
<PAGE>
agreement, note, lease or other agreement or instrument that is described or
referred to in the Offering Memorandum.
13. The execution, delivery and performance of the Purchase Agreement, the
DTC Agreement, each of the Registration Rights Agreements, the Indenture, the
Warrant Agreement, the Securities and the consummation of the transactions
contemplated therein and in the Offering Memorandum (including the issuance and
sale of the Securities, the use of the proceeds from the sale of the Securities
as described in the Offering Memorandum under the caption "Use Of Proceeds" and
the filing of the Registration Statement and Shelf Registration Statement) and
compliance by the Company with its obligations under the Purchase Agreement,
each of the Registration Rights Agreements, the Indenture, the Warrant Agreement
and the Securities will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a) of the Purchase Agreement) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary thereof pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to me, to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of its
subsidiaries is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that could not reasonably be expected to have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to me, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, assets or operations.
Nothing has come to my attention that would lead me to believe that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included or incorporated by
reference therein, as to which I make no statement), contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Offering Memorandum or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included or
incorporated by reference therein, as to which I make no statement at the time
the Offering Memorandum was issued), at the time the Offering Memorandum was
issued, at the time any such amended or supplemented Offering Memorandum was
issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
679049.1
B-3
<PAGE>
Exhibit C
FORM OF OPINION OF PATENT COUNSEL
OF THE COMPANY TO BE DELIVERED
PURSUANT TO SECTION 5(b)
1. To the best of my knowledge, there is no basis for a finding that the
Company does not have clear title or valid license rights to the patents or
patent applications described in the Offering Memorandum as being owned by or
licensed to the Company, and i have not identified any basis for a finding of
unenforceability or invalidity of any such patents.
2. Other than as disclosed in the Offering Memorandum, to the best of my
knowledge, there are no legal or governmental proceedings pending (other than
patent applications pending) relating to patents or proprietary information
rights to which the Company is a party or of which any such property of the
Company is subject, and no such proceedings are threatened or contemplated by
governmental authorities or others.
3. The statements in the Offering Memorandum under the headings "Risk
Factors--Dependence on Licensed Patent Applications Proprietary Technology" and
"Business--Patents, Licenses and Trademarks" constitute an accurate summary of
the matters referred to therein and fairly present the information called for
with respect to such matters; and I have no reason to believe that the
statements under such headings in the Offering Memorandum contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
4. Other than as disclosed in the Offering Memorandum, based upon a review
of the third party rights made known to me and discussions with Company
scientific personnel, such counsel is not aware of any valid United States,
foreign patent or published foreign patent application that is or would be
infringed by the activities of the Company described in the Offering Memorandum
and relating to products currently manufactured, used or sold by the Company or
currently proposed to be manufactured, used or sold by the Company.
5. Except as disclosed in the Offering Memorandum, neither the Company nor
any of its subsidiaries is subject to any current claim or notice of
infringement or other violation of any asserted rights of others with respect to
any Intellectual Property, which, singly or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
6. There are no legal or governmental proceedings pending relating to the
Intellectual Property owned or used by the Company or its subsidiaries, other
than review of pending patent and trademark applications, which, singly or in
the aggregate, could reasonably be expected to result in a Material Adverse
679049.1
C-1
<PAGE>
Effect and no such proceedings, including without limitation interference
proceedings, are currently threatened by governmental authorities or others,
with such exceptions as could not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
679049.1
C-2
<PAGE>
EXHIBIT 4.1
AMPEX CORPORATION,
Issuer
12% Senior Notes
Due 2003
12% Senior Notes
Due 2003, Series B
--------------------
INDENTURE
Dated as of January 28, 1998
--------------------
IBJ SCHRODER BANK & TRUST COMPANY,
Trustee
634606.8
<PAGE>
TABLE OF CONTENTS
Page
----
Article 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions...............................................1
SECTION 1.02 Other Definitions........................................16
SECTION 1.03 Incorporation by Reference of Trust
Indenture Act............................................17
SECTION 1.04 Rules of Construction....................................17
Article 2
The Securities
SECTION 2.01 Form and Dating..........................................18
SECTION 2.02 Execution and Authentication.............................19
SECTION 2.03 Registrar and Paying Agent...............................19
SECTION 2.04 Paying Agent To Hold Money in Trust......................20
SECTION 2.05 Securityholder Lists.....................................20
SECTION 2.06 Transfer and Exchange....................................21
SECTION 2.07 Restrictive Legends......................................21
SECTION 2.08 Book Entry Provisions for Global
Securities...............................................23
SECTION 2.09 Special Transfer Provisions..............................25
SECTION 2.10 Replacement Securities...................................27
SECTION 2.11 Outstanding Securities...................................27
SECTION 2.12 Temporary Securities.....................................28
SECTION 2.13 Cancellation.............................................28
SECTION 2.14 Defaulted Interest.......................................28
SECTION 2.15 CUSIP Numbers............................................29
Article 3
Redemption
SECTION 3.01 Notices to Trustee.......................................29
SECTION 3.02 Selection of Securities To Be Redeemed...................29
SECTION 3.03 Notice of Redemption.....................................30
SECTION 3.04 Effect of Notice of Redemption...........................31
SECTION 3.05 Deposit of Redemption Price..............................31
SECTION 3.06 Securities Redeemed in Part..............................31
634606.8
-i-
<PAGE>
Page
----
Article 4
Covenants
SECTION 4.01 Payment of Securities....................................31
SECTION 4.02 SEC Reports..............................................32
SECTION 4.03 Limitation on Indebtedness...............................32
SECTION 4.04 Limitation on Restricted Payments........................34
SECTION 4.05 Limitation on Asset Sales................................37
SECTION 4.06 Limitation on Liens......................................40
SECTION 4.07 Limitation on Dividends and Other
Payment Restrictions Affecting
Restricted Subsidiaries..................................41
SECTION 4.08 Limitation on Transactions with
Affiliates...............................................42
SECTION 4.09 Limitation on Designation of
Unrestricted Subsidiaries................................43
SECTION 4.10 Change of Control........................................44
SECTION 4.11 Compliance Certificate; Notice of
Defaults.................................................45
SECTION 4.12 Further Instruments and Acts.............................46
Article 5
Successor Corporation
SECTION 5.01 When Corporation May Merge or Transfer
Assets...................................................46
Article 6
Defaults and Remedies
SECTION 6.01 Events of Default........................................47
SECTION 6.02 Acceleration.............................................49
SECTION 6.03 Other Remedies...........................................50
SECTION 6.04 Waiver of Past Defaults..................................50
SECTION 6.05 Control by Majority......................................50
SECTION 6.06 Limitation on Suits......................................50
SECTION 6.07 Rights of Holders To Receive Payment.....................51
SECTION 6.08 Collection Suit by Trustee...............................51
SECTION 6.09 Trustee May File Proofs of Claim.........................51
SECTION 6.10 Priorities...............................................52
SECTION 6.11 Undertaking for Costs....................................52
SECTION 6.12 Waiver of Stay or Extension Laws.........................53
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Page
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Article 7
Trustee
SECTION 7.01 Duties of Trustee........................................53
SECTION 7.02 Rights of Trustee........................................54
SECTION 7.03 Individual Rights of Trustee.............................55
SECTION 7.04 Trustee's Disclaimer.....................................55
SECTION 7.05 Notice of Default........................................55
SECTION 7.06 Reports by Trustee to Holders............................56
SECTION 7.07 Compensation and Indemnity...............................56
SECTION 7.08 Replacement of Trustee...................................57
SECTION 7.09 Successor Trustee by Merger..............................58
SECTION 7.10 Eligibility; Disqualification............................58
SECTION 7.11 Preferential Collection of Claims
Against Corporation......................................58
Article 8
Satisfaction and Discharge of Indenture
SECTION 8.01 Discharge of Liability on Securities;
Defeasance...............................................58
SECTION 8.02 Conditions to Defeasance.................................60
SECTION 8.03 Application of Trust Money...............................61
SECTION 8.04 Repayment to Corporation.................................61
SECTION 8.05 Indemnity for Government Obligations.....................61
SECTION 8.06 Reinstatement............................................61
Article 9
Amendments, Supplements and Waivers
SECTION 9.01 Without Consent of Holders...............................62
SECTION 9.02 With Consent of Holders..................................62
SECTION 9.03 Compliance with Trust Indenture Act......................63
SECTION 9.04 Revocation and Effect of Consents........................63
SECTION 9.05 Notation on or Exchange of Securities....................64
SECTION 9.06 Trustee To Sign Amendments...............................64
SECTION 9.07 Payment for Consent......................................64
Article 10
Miscellaneous
SECTION 10.01 Trust Indenture Act Controls.............................65
SECTION 10.02 Notices..................................................65
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SECTION 10.03 Communication by Holders with Other
Holders..................................................66
SECTION 10.04 Certificate and Opinion as to Conditions
Precedent................................................66
SECTION 10.05 Statements Required in Certificate or
Opinion..................................................66
SECTION 10.06 When Treasury Securities Disregarded.....................67
SECTION 10.07 Rules by Trustee, Paying Agent and
Registrar................................................67
SECTION 10.08 Legal Holidays...........................................67
SECTION 10.09 Governing Law............................................67
SECTION 10.10 No Recourse Against Others...............................67
SECTION 10.11 Successors...............................................67
SECTION 10.12 Duplicate Originals......................................68
Signatures
EXHIBIT A Form of Initial Security
EXHIBIT B Form of Exchange Security
EXHIBIT C Form of Letter to be Delivered in
Connection with Transfers to
Non-QIB Accredited Investors
Note: This Table of Contents shall not, for any purpose, be
deemed to be a part of the Indenture.
634606.8
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1) ......................................... 7.10
(a)(2) ......................................... 7.10
(a)(3) ......................................... N.A.
(a)(4) ......................................... N.A.
(b) ......................................... 7.08; 7.10;
10.02
(c) ......................................... N.A.
311(a) ......................................... 7.11
(b) ......................................... 7.11
(c) ......................................... N.A.
312(a) ......................................... 2.05
(b) ......................................... 10.03
(c) ......................................... 10.03
313(a) ......................................... 7.06
(b)(1) ......................................... N.A.
(b)(2) ......................................... 7.06
(c) ......................................... 10.02
(d) ......................................... 7.06
314(a) ......................................... 4.02; 10.02
(b) ......................................... 10.03
(c)(1) ......................................... 10.04
(c)(2) ......................................... 10.04
(c)(3) ......................................... N.A.
(d) ......................................... N.A.
(e) ......................................... 10.05
(f) ......................................... N.A.
315(a) ......................................... 7.01
(b) ......................................... 7.05; 10.02
(c) ......................................... 7.01
(d) ......................................... 7.01
(e) ......................................... 6.11
316(a)(last sentence).................................... 10.06
(a)(1)(A) ......................................... 6.05
(a)(1)(B) ......................................... 6.04
(a)(2) ......................................... N.A.
(b) ......................................... 6.07
317(a)(1) ......................................... 6.08
(a)(2) ......................................... 6.09
(b) ......................................... 2.04
318(a) ......................................... 10.01
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose,
be deemed to be part of the Indenture.
634606.8
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INDENTURE dated as of January 28, 1998, between AMPEX CORPORATION, a
Delaware corporation ("Corporation"), and IBJ SCHRODER BANK & TRUST COMPANY, a
New York banking corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Corporation's 12% Senior
Notes Due 2003 (the "Initial Securities") and the Holders of the 12% Senior
Notes due 2003, Series B to be issued in exchange for the Initial Securities
pursuant to the Registration Rights Agreement (the "Exchange Securities"):
Article 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with") of any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
"Asset Sale" means (i) any sale, lease, conveyance or other
disposition by the Corporation or any Restricted Subsidiary (other than to the
Corporation or a Restricted Subsidiary and other than directors' qualifying
shares) of any assets (including by way of a sale-and-leaseback) other than in
the ordinary course of business or (ii) the issuance or sale of Capital Stock
(other than Disqualified Stock) of any Restricted Subsidiary, in the case of
each of (i) and (ii), whether in a single transaction or a series of related
transactions, to any Person (other than to the Corporation or a Restricted
Subsidiary and other than directors' qualifying shares) for Net Proceeds in
excess of $1,000,000; provided, however, the following transactions shall not be
deemed Asset Sales:
(i) the Corporation or any Restricted Subsidiary may sell accounts
receivable (or participations therein) in connection with any accounts
receivables financing;
(ii) the Corporation or any Restricted Subsidiary may sell Capital
Stock or Indebtedness or other securities of an Unrestricted Subsidiary;
634606.8
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(iii) the Corporation and any Restricted Subsidiary may (x) convey,
sell, lease, transfer, assign or otherwise dispose of assets pursuant to
and in accordance with the provisions of Section 5.01 of this Indenture and
(y) make Restricted Payments permitted by the provisions of Section 4.04 of
this Indenture;
(iv) the Corporation and any Restricted Subsidiary may create or
assume Liens (or permit any foreclosure thereon) securing Indebtedness to
the extent that such Lien does not violate the provisions of Section 4.06
of this Indenture; and
(v) the Corporation and any Restricted Subsidiary may consummate any
sale or series of related sales of assets or properties of the Corporation
and any Restricted Subsidiary having an aggregate fair market value for all
such sales of less than $1 million in any fiscal year.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of numbers of years (rounded upwards to the nearest
month)from the date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Preferred Stock multiplied by the amount of such payment by (ii)
the sum of all such payments.
"Board of Directors" means the Board of Directors of the Corporation
or any duly authorized committee thereof.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means and includes any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including Preferred Stock, but excluding any debt securities convertible into
such equity.
634606.8
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"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or Moody's Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Services or at least P-1 from Moody's
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
(or, with respect to foreign banks, similar instruments) maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any member of the European Economic Community or any U.S. branch of
a foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $200 million; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (iv) above; and (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act except that for purposes of this clause (i) such person or group
shall be deemed to have "beneficial ownership" of all shares that any such
person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the outstanding Voting Stock of the
Corporation; or (ii) the sale, lease or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Corporation and its Restricted Subsidiaries to any person or group (as so
defined), excluding any such sale, lease or other transfer (x) to or among the
Corporation's Restricted Subsidiaries and (y) to any Person that is controlled
by the Permitted Holders.
634606.8
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"Consolidated Coverage Ratio" means, with respect to any Person for
any period, the ratio of EBITDA of such Person for such period to the
Consolidated Interest Expense of such Person for such period provided, however,
that (A) if the Corporation or any Restricted Subsidiary has incurred any
Indebtedness since the beginning of such period and through the date of
determination of the Consolidated Coverage Ratio that remains outstanding or if
the transaction giving rise to the need to calculate Consolidated Coverage Ratio
is an incurrence of Indebtedness or both, the EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro forma
basis to (1) such Indebtedness as if such Indebtedness had been incurred on the
first day of such period (provided that if such Indebtedness is incurred under a
revolving credit facility or similar arrangement or under any predecessor
revolving credit or similar arrangement only that portion of such Indebtedness
that constitutes the one year projected average balance of such Indebtedness (as
determined in good faith by the Board of Directors of the Corporation) shall be
deemed outstanding for purposes of this calculation) and (2) the discharge of
any other Indebtedness repaid, repurchased defeased or otherwise discharged with
the proceeds of such new Indebtedness as if such discharge had occurred on the
first day of such period, (B) if since the beginning of such period and
Indebtedness of the Corporation or its Restricted Subsidiaries has been repaid,
repurchased, defeased or otherwise discharged (other than Indebtedness under a
revolving credit or similar arrangement unless such revolving credit
Indebtedness has been permanently repaid and the underlying commitment
terminated and not replaced), Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such
Indebtedness had been repaid, repurchased, defeased or otherwise discharged on
the first day of such period, (C) if since the beginning of such period the
Corporation or any of its Restricted Subsidiaries shall have made any Asset
Sale, EBITDA for such period shall be reduced by an amount equal to the EBITDA
(if positive) attributable to the assets which are the subject of such Asset
Sale for such period or increased by an amount equal to the EBITDA (if negative)
attributable thereto for such period, Consolidated Interest Expense for such
period (i) reduced by an amount equal to the Consolidated Interest Expense
attributable to any Indebtedness of the Corporation or any of its Restricted
Subsidiaries repaid, repurchased, defeased or otherwise discharged with respect
to the Corporation and its continuing Restricted Subsidiaries in connection with
such Asset Sale for such period (or if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest For such period directly
attributable to the Indebtedness of Restricted Subsidiary to the extent the
Corporation and its continuing Restricted Subsidiaries
634606.8
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<PAGE>
are no longer liable for such Indebtedness after such sale) and (ii) increased
by interest income attributable to the assets which are the subject of such
Asset Sale for such period, (D) if since the beginning of such period the
Corporation or any of its Restricted Subsidiaries (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary (or any Person which
becomes a Restricted Subsidiary as a result thereof) or an acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder which constitutes all or substantially of an operating unit of a
business, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first day
of such period, and (E) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary of the Corporation or was merged
with or into the Corporation or any other Restricted Subsidiary since the
beginning of such period) shall have made any Asset Sale, Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(C) or (D) above if made by the Corporation or a Restricted Subsidiary during
such period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Sale,
Investment or acquisition had occurred on the first day of such period. For
purposes of this definition whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the
Corporation. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period.
"Consolidated GAAP Net Income" means, with respect to any period, the
net income (or loss) of the Corporation and its consolidated Subsidiaries for
such period, determined in accordance with GAAP as from time to time in effect.
"Consolidated Interest Expense" means, with respect to any period, the
sum of (i) the interest expense of the Corporation and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP, including, without limitation, (a) amortization of debt discount, (b)
the net cash payments, if any, under interest rate contracts, (c) the interest
portion of any deferred payment obligation,
634606.8
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<PAGE>
(d) accrued interest, and (e) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance financing or
similar facilities, plus (i) the interest component of the Capital Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by the
Corporation during such period, of the Corporation and its Restricted
Subsidiaries, plus (iii) all cash dividends paid during such period by the
Corporation and its Restricted Subsidiaries with respect to any Disqualified
Stock, in each case as determined on a consolidated basis in accordance with
GAAP; provided, that Consolidated Interest Expense shall exclude the
amortization of fees and expenses related to the issuance of the Securities.
"Consolidated Net Income" means, with respect to any period, the
Consolidated GAAP Net Income (or loss) of the Corporation and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP, adjusted to the extent included in calculating such net income (or
loss), by excluding, without duplication, (i) extraordinary gains and losses,
(ii) the portion of net income (or loss) of the Corporation and its Restricted
Subsidiaries allocable to interests in unconsolidated Persons or Unrestricted
Subsidiaries, except that the Corporation's equity in the net income of such
Person or Subsidiary shall be included in Consolidated Net Income to the extent
of the amount of dividends or distributions actually paid to the Corporation or
its Restricted Subsidiaries by such Person or Subsidiary during such period,
(iii) net income (or loss) of any Person combined with the Corporation or any of
its Restricted Subsidiaries on a "pooling of interests" basis attributable to
any period prior to the date of combination, (iv) net gain or loss in respect of
any sale, transfer or disposition of assets (including without limitation,
pursuant to sale and leaseback transactions) other than in the ordinary course
of business, (v) the net income of any Restricted Subsidiary to the extent that
the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income to the Corporation is not at the time permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to the Restricted Subsidiary or its stockholders (other
than pursuant to the Securities or this Indenture), and (vi) the non-recurring
cumulative effect of a change in accounting principles.
"Consolidated Total Assets" means, as of any date, the total assets of
the Corporation and its Restricted Subsidiaries as shown on the most recently
available consolidated balance sheet of the Corporation and its Restricted
Subsidiaries prepared in conformity with GAAP.
634606.8
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"Currency Agreement Obligations" means the obligations of any Person
under any foreign exchange contract, currency swap agreement or other similar
agreement to protect such Person against fluctuations in currency values.
"Corporation" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depository" shall mean The Depository Trust Company, New York, New
York, or any successor thereto registered under the Securities Exchange Act or
other applicable statute or regulation.
"Disqualified Stock" means (a) any Preferred Stock of any Restricted
Subsidiary, and (b) any Capital Stock which by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event (i) matures or is mandatorily redeemable pursuant to
a sinking fund obligation or otherwise, or (ii) is redeemable at the option of
the holder thereof (other than upon the occurrence of an "Asset Sale" or a
change of control of the Corporation in circumstances where the holders of the
Notes would have similar rights), in whole or in part, in each case on or prior
to the Stated Maturity of the Securities, including without limitation the
Noncumulative Redeemable Preferred Stock.
"EBITDA" means, with respect to any Person for any period, the sum of
Consolidated Net Income of such Person for such period plus the following to the
extent deducted in calculating such Consolidated Net Income: (a) provision for
taxes based on the net income or profits of such Person, (b) Consolidated
Interest Expense, (c) consolidated depreciation and amortization, calculated in
accordance with GAAP, (d) any other non-cash charges (excluding any non-cash
items that represent an accrual of or reserve for cash charges reasonably
expected to be disbursed in any subsequent period prior to the Stated Maturity
of the Notes) deducted in computing Consolidated Net Income, less, (e) non-cash
items increasing Consolidated Net Income (excluding any items which represent an
accrual for cash receipts or the reduction of required future cash disbursements
reasonably expected to be received or disbursed in a subsequent period prior to
the Stated Maturity of the Notes).
"Equity Offering" means any public or private sale of Capital Stock
(other than Disqualified Stock) of the Corporation
634606.8
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other than public offerings with respect to the Corporation's common stock
registered on Form S-8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" means Indebtedness of the Corporation or its
Restricted Subsidiaries in existence or incurred pursuant to any loan or other
agreement in effect on the Issue Date plus any premium or interest accrued
thereon.
"Foreign Subsidiary" means a Subsidiary of a Person not organized
under the laws of the United States or any political subdivision thereof and the
operations of which are located substantially outside the United States.
"GAAP" means generally accepted accounting principles in the United
States set forth in the Statements of Financial Accounting Standards and the
Interpretations, Accounting Principles Board Opinions and AICPA Accounting
Research Bulletins which are applicable as of December 31, 1997 except as
otherwise specified herein.
"Guarantee" means any obligation, contingent or otherwise, of any
Person guaranteeing any Indebtedness of any Person (including, without
limitation, obligations to purchase assets, securities or services, to
take-or-pay or to maintain financial statement conditions or arrangements or
agreements entered into for the purpose of assuring the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof, in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements of negotiable instruments for
collection or deposit in the ordinary course of business, or contingent
obligations in connection with the sale or discount of accounts receivable and
similar paper. The term "Guarantee" used as a verb has a corresponding meaning.
The term "Guarantor" shall mean any Person Guaranteeing any obligation.
"Indebtedness" means, with respect to any Person, without duplication,
(i) the principal of and the premium (if any) on all indebtedness of such Person
for money borrowed or which is evidenced by a note, bond, debenture or similar
instrument for payment of which such Person is liable, (ii) all obligations of
such Person under any conditional sale, title retention or similar agreement in
respect of the deferred or unpaid purchase price of property or services
acquired by such Person, (iii) all Capital Lease Obligations of such Person,
(iv)
634606.8
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all obligations of such Person in respect of letters of credit or bankers'
acceptance issued or created for the account of such Person, (v) all net
obligations of such Person under Interest Rate Agreement Obligations or Currency
Agreement Obligations of such Person, (vi) all liabilities of others of the kind
described in the preceding clauses (i), (ii) or (iii) secured by any Lien on any
property owned by such Person even though such Person has not assumed or become
liable for the payment of such liabilities; provided, however, the amount of
such Indebtedness for purposes of this definition shall be limited to the lesser
of the amount of Indebtedness secured by such Lien or the value of the property
subject to such Lien, (vii) all Disqualified Stock issued by such Person and all
Preferred Stock issued by a Restricted Subsidiary of such Person, and (viii) to
the extent not otherwise included, any Guarantee by such Person of any other
Person's Indebtedness or other obligations described in clauses (i) through
(vii) above. "Indebtedness" of the Corporation and the Restricted Subsidiaries
shall not include (i) trade payables incurred in the ordinary course of
business, and (ii) contingent obligations incurred in connection with the sale
or discount of accounts receivable and similar paper in the ordinary course of
business. The principal amount outstanding of any Indebtedness issued with
original issue discount is the accreted value of such Indebtedness and
Indebtedness shall not include any liability for federal, state, local or other
taxes.
"Initial Purchaser" means First Albany Corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Rate Agreement Obligations" means, with respect to any
Person, the Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement but excluding advances to customers and employees in the
ordinary course of business) to, capital contribution (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others) to, or any purchase or acquisition of capital
stock, bonds, notes, debentures or other similar instruments issued by, such
Person
634606.8
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and shall include the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary. For purposes of the definition of "Unrestricted Subsidiary" below
and the provisions of Section 4.09 of this Indenture, (i) "Investment" shall
include the fair market value of the assets (net of liabilities) of any
Restricted Subsidiary of the Corporation at the time that such Restricted
Subsidiary of the Corporation is designated an Unrestricted Subsidiary and shall
exclude the fair market value of the assets (net of liabilities) of any
Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary of the Corporation and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined by the
Board of Directors in good faith.
"Issue Date" means the date on which the Notes are first issued under
the Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of, or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Maturity Date" means March 15, 2003.
"Net Available Cash" means, with respect to any Asset Sale by any
Person, the aggregate cash or Cash Equivalent proceeds received by such Person
(including any cash payments received by way of deferred payment pursuant to, or
monetization of, a note or installment receivable or otherwise, but only as and
when received) in connection with such Asset Sale, plus the amount of cash and
Cash Equivalents referred to in the provided, however clause of paragraph (a)
(ii) of Section 4.05 of this Indenture, if any, net of (i) the amount of any
Indebtedness (including Disqualified Stock or Preferred Stock of a Subsidiary)
which is required to be repaid by such Person or its Affiliates in connection
with such Asset Sale, plus (ii) all fees, commissions and other expenses
incurred (including without limitation, the fees and expenses of legal counsel
and investment banking, accounting, underwriting and brokerage fees and
expenses) by such Person in connection with such Asset Sale, (iii) provision for
taxes, including income taxes, attributable to the Asset Sale or attributable to
required prepayments or
634606.8
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repayments of Indebtedness with the proceeds of such Asset Sale, (iv) any
amounts reasonably provided by the Corporation or any Restricted Subsidiary of
the Corporation as a reserve against any liabilities associated with such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, (v) any
dividends or distributions or other amounts payable to Persons holding a
beneficial interest in the assets sold or to holders of minority interests in a
Restricted Subsidiary or other entity as a result of such Asset Sale.
"Net Proceeds," with respect to any issuance or sale of Capital Stock,
means the proceeds, in cash, securities or property (with any securities or
property valued at fair market value), of the issuance or sale net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees and expenses incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Noncumulative Redeemable Preferred Stock" means the shares of the
Corporation's 8% Noncumulative Redeemable Preferred Stock outstanding on the
Issue Date, and any refinancing thereof after the Issue Date, provided, however,
that the aggregate liquidation value of any securities issued in any such
refinancing shall not exceed the liquidation value of the Noncumulative
Redeemable Preferred Stock outstanding on the Issue Date.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering" shall have the meaning set forth in the Offering
Memorandum.
"Offering Memorandum" means the offering memorandum dated as of
January 23, 1998 relating to the Offering and sale of the Securities.
"Officer" means the Chairman of the Board, the President, the
Executive Vice President, any Senior Vice President, any Vice President, the
Treasurer or the Secretary of the Corporation.
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"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the
Corporation.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Corporation or the Trustee.
"Permitted Holders" means collectively or individually (i) Edward J.
Bramson and (ii) his "associates" (as defined in Rule 12B-2 under the Exchange
Act, except that a person shall not be an "associate" for purposes of this
Indenture solely because such person comes within the definition of such term in
clause (a) of such Rule) and his Affiliates.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock corporation, limited liability corporation,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Stock" as applied to the Capital Stock of any Person means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over Capital Stock of any other class of such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security in connection with the transaction in
question.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth in Section 2.07.
"Purchase Money Obligation" means any Indebtedness secured by a Lien
on assets related to the business of the Corporation or the Restricted
Subsidiaries, and any additions and accessions thereto, which are purchased or
constructed by the Corporation or any Restricted Subsidiary at any time after
the Issue Date; provided that (i) any security agreement or conditional sales or
other title retention contract pursuant to which the Lien on such assets is
created (collectively a "Security Agreement") shall be entered into within 180
days after the purchase or substantial completion of the construction of such
assets and shall at all times be confined solely to the assets so purchased or
acquired, any additions and accessions thereto and any proceeds therefrom, (ii)
at no time shall the aggregate principal amount of the outstanding Indebtedness
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secured thereby be increased, except in connection with the purchase of
additions and accessions thereto and except in respect of fees and other
obligations in respect of such Indebtedness and (iii)(A) the aggregate
outstanding principal amount of Indebtedness secured thereby (determined on a
per asset basis in the case of any additions and accessions) shall not at the
time such Security Agreement is entered into exceed 100% of the purchase price
to the Corporation or any Restricted Subsidiary of the assets subject thereto or
(B) the Indebtedness secured thereby shall be with recourse solely to the assets
so purchased or acquired, any additions and accessions thereto and any proceeds
therefrom.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means the March 1st or September 1st immediately
preceding an interest payment date specified in the Securities.
"Registration Rights Agreement" means the Registration Rights
Agreement dated on or about the Issue Date between the Company and the Initial
Purchaser for the benefit of themselves and the Holders as the same may be
amended from time to time in accordance with the terms thereof.
"Restricted Investment" means an Investment by the Corporation or a
Restricted Subsidiary in any Subsidiary other than a Restricted Subsidiary.
"Restricted Payment" means (i) any dividend or other distribution
declared or paid on any Capital Stock of the Corporation (other than dividends
or distributions payable solely in Capital Stock (other than Disqualified Stock)
of the Corporation or dividends or distributions payable to the Corporation or
any Restricted Subsidiary and other than pro rata dividends or other
distributions made by a Restricted Subsidiary that is not a Wholly Owned
Subsidiary to minority stockholders (or owners of an equivalent interest in the
case of a Subsidiary that is not a corporation); (ii) any payment to purchase,
redeem or otherwise acquire or retire for value any Capital Stock of the
Corporation; (iii) any voluntary or optional payment to purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated in right of payment to the Notes other than a purchase, redemption,
defeasance or other acquisition or retirement for value that is paid for with
the proceeds of Refinancing Indebtedness that is permitted under Section 4.03 of
this Indenture; or (iv) any Restricted Investment.
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"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Security constitutes a Restricted Security.
"Restricted Subsidiary" means each direct or indirect Subsidiary of
the Corporation other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities" means the Initial Securities and the Exchange Securities
issued under this Indenture.
"Senior Indebtedness" in the case of the Notes means Indebtedness that
is not by its terms expressly subordinate or junior in right of payment to any
other Indebtedness of the Corporation.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X
promulgated pursuant to the Securities Act.
"Subordinated Indebtedness" means Indebtedness (including, without
limitation, secured Indebtedness) of the Corporation which by its express terms
is subordinated or junior in right of payment to the Notes.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person or
any Subsidiary of such Person is a general partner, or (iii) any other Person
(other than a corporation or limited partnership) in which such Person, or one
or more other Subsidiaries of such Person, or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has more than 50% of the
outstanding partnership or similar interests or has the power, by contract or
otherwise, to direct or cause the direction of the policies, management and
affairs thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture.
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"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer or assistant officer of the Trustee
in its Corporate Trust Department or with respect to a particular matter, any
officer to whom such matter is referred because of such officer's knowledge and
familiarity with the particular subject.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America for the payment of which the full faith and credit of
the United States of America is pledged and which are not callable at the
issuer's option.
"Unrestricted Subsidiary" means Ampex Holdings Corporation and any
other Subsidiary of the Corporation designated as such pursuant to and in
compliance with the provisions of Section 4.09 of this Indenture. Any such
designation may be revoked by a Board Resolution of the Corporation delivered to
the Trustee, subject to the provisions of such covenant.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding as to which the holders thereof are entitled under
ordinary circumstances (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees of such Person.
"Wholly Owned Subsidiary" means any Subsidiary with respect to which
all of the outstanding Voting Stock (other than directors' qualifying shares) of
which are owned, directly or indirectly, by the Corporation.
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SECTION 1.02 Other Definitions
Term Defined in Section
"Acquired Person".................................. 4.03
"Agent Members".................................... 2.08
"Bankruptcy Law"................................... 6.01
"Custodian"........................................ 6.01
"Designation"...................................... 4.09
"Event of Default"................................. 6.01
"Excess Proceeds".................................. 4.05
"Global Security".................................. 2.01
"Incur"............................................ 4.03
"Legal Holiday".................................... 10.08
"Offer"............................................ 4.05
"Offer Amount"..................................... 4.05
"Offer Period"..................................... 4.05
"Paying Agent"..................................... 2.03
"Permitted Payments"............................... 4.04
"Physical Securities".............................. 2.01
"Purchase Date".................................... 4.05
"Refinancing"...................................... 4.03
"Refinancing Indebtedness"......................... 4.03
"Registrar"........................................ 2.03
"Restricted Payment"............................... 4.04
"Revocation"....................................... 4.09
"Successor Corporation"............................ 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory
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provisions of the TIA, which are incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Corporation.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect on the Issue Date;
(2) "or" is not exclusive;
(3) "including" means including, without limitation; and
(4) words in the singular include the plural and words in the plural
include the singular.
Article 2
The Securities
SECTION 2.01 Form and Dating. The Initial Securities and the Trustee's
certificate of authentication relating thereto shall be substantially in the
form of Exhibit A hereto. The Exchange Securities and the Trustee's certificate
of authentication relating thereto shall be substantially in the form of Exhibit
B hereto. The Securities may have notations,
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legends or endorsements required by law, stock exchange rule or depository rule
or usage. The Corporation shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication and shall show the date of its authentication.
The additional terms and provisions contained in the forms of
Securities annexed hereto as Exhibits A and B, respectively, shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Corporation and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more global Securities in registered form,
substantially in the form set forth in Exhibit A (the "Global Security"),
deposited with the Trustee, as custodian for the Depository, duly executed by
the Corporation and authenticated by the Trustee as hereinafter provided and
shall bear the legend set forth in Section 2.07 hereof. The aggregate principal
amount of the Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository.
Securities offered and sold in reliance on any other exemption from
registration under the Securities Act other than as described in the preceding
paragraph shall be issued, and Securities offered and sold in reliance on Rule
144A may be issued, in the form of certificated Securities in registered form,
in substantially the form set forth in Exhibit A (the "Physical Securities").
The Physical Securities are sometimes collectively herein referred to as the
"Physical Securities." Physical Securities may initially be registered in the
name of the Depository or a nominee of such Depository and be delivered to such
Depository. Beneficial owners of Physical Securities, however, may request
registration of such Physical Securities in their names or the names of their
nominees.
SECTION 2.02 Execution and Authentication. Two Officers shall sign the
Securities for the Corporation by manual or facsimile signature. The
Corporation's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
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A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and deliver Securities for original
issue from time to time in an aggregate principal amount of up to $50,000,000
upon a written order of the Corporation signed by two Officers or by an Officer
and an Assistant Treasurer or an Assistant Secretary of the Corporation. The
aggregate principal amount of Securities outstanding at any time may not exceed
that amount except as provided in Section 2.10.
The Securities shall be issuable only in registered form and only in
denominations of $1,000 principal amount and any integral multiple thereof.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Corporation to authenticate Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03 Registrar and Paying Agent. The Corporation shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange ("Registrar") and an office or agency where
Securities may be presented for payment ("Paying Agent"). The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Corporation may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Corporation shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Corporation shall
notify the Trustee of the name and address of any such agent. If the Corporation
fails to maintain a Registrar or Paying Agent. the Trustee shall act as such,
and shall be entitled to appropriate compensation in accordance with Section
7.07. The
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Corporation or any Subsidiary or Affiliate may act as Paying Agent, Registrar,
co-registrar or transfer agent.
The Corporation initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04 Paying Agent To Hold Money in Trust. On or prior to each
due date of the principal and interest on any Security, the Corporation shall
deposit with the Paying Agent a sum in immediately available funds sufficient to
pay such principal and interest when due. The Corporation shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee of any default by the Corporation in
making any such payment. If the Corporation or a Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Corporation at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds disbursed
by it. Upon making such payment, the Paying Agent (other than the Corporation)
shall have no further liability for the money delivered to the Trustee.
SECTION 2.05 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Corporation shall furnish to the Trustee at least five Business
Days before each interest payment date and at such other times as the Trustees
may request in writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Securityholders.
SECTION 2.06 Transfer and Exchange. When a Security is presented to
the Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if duly authorized or
accompanied by a written instrument of transfer, by the Holder. The Registrar
may require the assurances set forth in Section 8-402 of the Uniform Commercial
Code that any indorsement is genuine and effective. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Corporation shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Corporation may
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require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges. The Corporation shall not be required to make and the
Registrar need not register transfers or exchanges of Securities selected for
redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
Prior to the due presentation for registration of transfer of any
Security, the Corporation, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the
Corporation, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary. Furthermore, any Holder of a Global
Security shall, by acceptance of such Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depositary (or its agent) and that ownership
of a beneficial interest in the Global Security shall be required to be
reflected in a book entry.
SECTION 2.07 Restrictive Legends. (a) Each Global Security and
Physical Security that constitutes a Restricted Security shall bear the
following legend (the "Private Placement Legend") on the face thereof until the
third anniversary of the Issue Date, unless otherwise agreed by the Corporation
and the Holder thereof:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY
MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACCEPTANCE HEREOF, THE HOLDER (1) REPRESENTS
(A) THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN INSTITUTIONAL ACCREDITED INVESTOR), (2) AGREES THAT IT WILL NOT, WITHIN
THE TIME PERIOD REFERRED TO IN RULE 144(K) UNDER THE SECURITIES ACT AS IN EFFECT
WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY,
EXCEPT (A) TO THE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT
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PRIOR TO SUCH TRANSFER FURNISHES TO THE CORPORATION A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO RESTRICTIONS ON TRANSFER OF
THIS SECURITY, (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (G) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION) AND IN EACH
CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
(b) Each Global Security shall also bear a legend on the face thereof
in substantially the following form:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.07 OF THE INDENTURE.
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SECTION 2.08 Book Entry Provisions for Global Securities. This Section
2.08 shall apply only to the Global Security deposited with the Depository or
its custodian.
(1) So long as the Securities are eligible for book-entry settlement
with the Depository, or unless otherwise required by law, the Global Security
initially shall (i) be registered in the name of the Depository or the nominee
of such Depository, (ii) be delivered to the Trustee as custodian for such
Depository and (iii) bear legends as set forth in Section 2.07.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Corporation, the
Trustee and any agent of the Corporation or the Trustee as the absolute owner of
the Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Corporation, the Trustee or any Agent of the
Corporation or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Security.
(2) Transfers of the Global Security shall be limited to transfers in
whole, but, subject to the immediately succeeding sentence, not in part, to the
Depository, its successors or their respective nominees. Interests of beneficial
owners in the Global Security may be transferred or exchanged for Physical
Securities in accordance with the rules and procedures of the Depository and the
provisions of Section 2.09 hereof. In addition, Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the Global Security if (i) the Depository notifies the Corporation that it is
unwilling or unable to continue as Depository for the Global Security and a
successor depositary is not appointed by the Corporation within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Securities.
(3) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Security to beneficial owners pursuant to
paragraph (2), the Registrar shall
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(if one or more Physical Securities are to be issued) reflect on its books and
records the date and a decrease in the principal amount of the Global Security
in an amount equal to the principal amount of the beneficial interest in the
Global Security to be transferred, and the Corporation shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(4) In connection with the transfer of the beneficial interests in the
entire Global Security to beneficial owners pursuant to paragraph (2), the
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Corporation shall execute, and the Trustee shall,
authenticate and deliver to each beneficial owner identified by the Depository
in exchange for its beneficial interest in the Global Security, an equal
aggregate principal amount of Physical Securities of authorized denominations.
(5) Any Physical Security constituting a Restricted Security delivered
in exchange for a beneficial interest in the Global Security pursuant to
paragraph (2) or (3) shall, except as otherwise provided by paragraphs (1)(a)(x)
and (3) of Section 2.09 hereof, bear the Private Placement Legend.
(6) The owner of a beneficial interest in the Global Security may
grant proxies and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Securities.
SECTION 2.09 Special Transfer Provisions. (1) Transfers to Non-QIB
Institutional Accredited Investors. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to any Institutional Accredited Investor which is not a
QIB:
(a) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the third
anniversary of the Issue Date or (y) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB, the proposed
transferee has delivered to the Registrar a letter substantially in the
form of Exhibit C hereto; and
(b) if the proposed transferor is an Agent Member holding a beneficial
interest in the Global Security, upon
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receipt by the Registrar of (x) the certificate, if any, required by
paragraph (a) above and (y) written instructions given in accordance with
the Depository's and the Registrar's procedures,
whereupon (i) the Registrar shall reflect on its books and records the date and
if the transfer does not involve a transfer of outstanding Physical Securities)
a decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (ii) the Corporation shall execute and the Trustee shall
authenticate and deliver one or more Physical Securities of like tenor and
amount.
(2) Transfers to QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB:
(a) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Security stating, or has otherwise advised the Corporation and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Security stating, or has
otherwise advised the Corporation and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Corporation as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A; and
(b) if the proposed transferee is an Agent Member, and the Securities
to be transferred consist of Physical Securities which after transfer are
to be evidenced by an interest in the Global Security, upon receipt by the
Registrar of written instructions given in accordance with the Depository's
and the Security Registrar's procedures, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of the
Global Security in an amount equal to the principal amount of the
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Physical Securities to be transferred, and the Trustee shall cancel the
Physical Securities so transferred.
(3) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless (i) the requested transfer is after the
third anniversary of the Issue Date, or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Corporation and the Trustee
to the effect that neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provisions of the
Securities Act.
(4) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.08 hereof or this Section
2.09. The Corporation shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
during the Registrar's normal business hours upon the giving of reasonable
written notice to the Registrar.
In connection with any transfer of the Securities, the Trustee, the
Registrar and the Corporation shall be entitled to receive, shall be under no
duty to inquire into, may conclusively presume the correctness of, and shall be
fully protected in relying upon the certificates, opinions and other information
referred to herein (or in the forms provided herein, attached hereto or to the
Securities, or otherwise) received from any Holder and any transferee of any
Security regarding the validity, legality and due authorization of any such
transfer, the eligibility of the transferee to receive such Security and any
other facts and circumstances related to such transfer.
SECTION 2.10 Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Corporation shall
issue and the Trustee
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shall authenticate a replacement Security if the requirements of Section 8-405
of the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Corporation, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Corporation and the Trustee to protect the Corporation, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Corporation and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Corporation.
SECTION 2.11 Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it and those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Corporation or an Affiliate of the Corporation holds the Security.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Corporation receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Corporation or a Subsidiary) holds
in trust, in accordance with this Indenture, on a redemption date or maturity
date money sufficient to pay all amounts payable on that date with respect to
the Securities (or portions thereof) and is not prohibited from paying such
money to the Holders thereof pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
If a Security is called for redemption or if it matures in less than a
year and if the Corporation has satisfied its obligation to pay the Security in
accordance with Article 8 of this Indenture, the Corporation and the Trustee
need not treat the Security as outstanding in determining whether Holders of the
required principal amount of Securities have concurred in any direction, waiver
or consent.
SECTION 2.12 Temporary Securities. Until definitive Securities are
ready for delivery, the Corporation may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the
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Corporation considers appropriate for temporary Securities. Without unreasonable
delay, the Corporation shall prepare and the Trustee shall authenticate
definitive Securities in exchange for temporary Securities.
SECTION 2.13 Cancellation. The Corporation at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee and no one else shall cancel and destroy
(subject to the record retention requirements of the Exchange Act) all
Securities surrendered for transfer, exchange, payment or cancellation and
deliver a certificate of such destruction to the Corporation unless the
Corporation directs the Trustee to deliver canceled Securities to the
Corporation. The Corporation may not issue new Securities to replace Securities
it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.14 Defaulted Interest. If the Corporation defaults in a
payment of interest on the Securities, it shall pay the defaulted interest
(plus, to the extent permitted by applicable law, interest on such defaulted
interest at the rate borne by the Securities plus 1%) in any lawful manner to
the persons who are Securityholders on a subsequent special record date, which
date shall be at least five business days prior to the special payment date. The
Corporation shall fix the special record date and special payment date, which
special record date shall be at least 10 days before the special payment date,
and the Corporation shall promptly mail to each Securityholder a notice that
states the special record date, the special payment date and the amount of
defaulted interest to be paid.
SECTION 2.15 CUSIP Numbers. The Corporation in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
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Article 3
Redemption
SECTION 3.01 Notices to Trustee. If the Corporation elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities Section of this Indenture
pursuant to which the redemption will occur.
The Corporation shall give the notices provided for in this Section at
least 60 days before the redemption date, unless the Trustee consents to a
shorter period. Such notice shall be accompanied by an Officers' Certificate and
an Opinion of Counsel from the Corporation that such redemption will comply with
the conditions contained herein.
If less than all the Securities are to be redeemed, the record date
relating to such redemption shall be selected by the Corporation and given by
notice to the Trustee, which record date shall be not less than 15 days after
the date of notice to the Trustee.
SECTION 3.02 Selection of Securities To Be Redeemed. If less than all
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000, subject to the restriction that
Securities and portions of Securities the Trustee selects shall be in amounts of
$1,000 or a whole multiple of $1,000. Securities in denominations of $1,000 or
less may only be redeemed in whole. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Corporation promptly of the Securities
or portions of Securities to be redeemed.
SECTION 3.03 Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, the Corporation shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
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The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if less than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Corporation defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date;
(7) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed;
and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Corporation's request, the Trustee shall give the notice of
redemption in the Corporation's name and at the Corporation's expense. In such
event the Corporation shall provide the Trustee with the information required by
clauses (1) through (4) and (7).
SECTION 3.04 Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date. Failure to
give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION 3.05 Deposit of Redemption Price. On or prior to the
redemption date, the Corporation shall deposit with the Paying Agent (or if the
Corporation or a Subsidiary is the Paying
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Agent, shall segregate and hold in trust) money, in immediately available funds,
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Corporation to the
Trustee for cancellation.
SECTION 3.06 Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Trustee shall authenticate for the Holder (at the
Corporation's expense) a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
Article 4
Covenants
SECTION 4.01 Payment of Securities. The Corporation shall promptly pay
the principal of and interest on the Securities not later than 11:00 a.m. New
York City time on the dates and in the manner provided in the Securities and in
this Indenture. Principal and interest (including any redemption price) shall be
considered paid on the date due if the Trustee or the Paying Agent (other than
the Corporation or a Subsidiary) holds on such date money in U.S. dollars
sufficient to pay all principal and interest (including any redemption price)
then due and the Trustee or the Paying Agent is not prohibited from paying such
money to the Holders on that date pursuant to the terms of this Indenture.
The Corporation shall pay interest on overdue principal (including any
redemption price) at the rate borne by the Securities plus 1% per annum, and it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful.
SECTION 4.02 SEC Reports. The Corporation shall file with the Trustee
within 15 days after it files them with the SEC copies of the annual report and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe) which
the Corporation is required to file with the SEC pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934. In the event the Corporation is at any
time no longer subject to the reporting requirements of Section 13 or 15(d) of
the Securities and Exchange Act of 1934, it shall continue to file with the SEC
and provide the Trustee with reports containing substantially the same
information as would have been required to be filed with the SEC with respect to
financial statements, management's discussion
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and analysis and a discussion of significant changes in the business and
financial condition of the Corporation had the Corporation continued to have
been subject to such reporting requirements. In such event, such reports shall
be provided at the times the Corporation would have been required to provide
reports had it continued to have been subject to such reporting requirements.
Subsequent to qualification of the Indenture under the TIA, the Corporation also
shall comply with the other provisions of TIA ss 314(a).
SECTION 4.03 Limitation on Indebtedness. (a) The Corporation shall
not, and shall not permit any of its Restricted Subsidiaries to, issue, assume,
guarantee, incur or otherwise become liable for (collectively, "Incur") any
Indebtedness; provided, however, that: (i) the Corporation may Incur
Indebtedness which is expressly subordinate and junior in right of payment to
the Notes; and (ii) the Corporation and its Restricted Subsidiaries may Incur
Indebtedness if, on the date of Incurrence, the Consolidated Coverage Ratio
would be at least equal to 3.00 to 1.00.
(b) Notwithstanding the foregoing paragraph (a), the Corporation and
its Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness of the Corporation represented by the
Securities;
(ii) Existing Indebtedness;
(iii) Indebtedness owed by any Restricted Subsidiary to the
Corporation or to another Restricted Subsidiary, or owed by the
Corporation to any Restricted Subsidiary; provided, however, that any
such Indebtedness shall be at all times held by a Person which is
either the Corporation or a Restricted Subsidiary of the Corporation;
(iv) Indebtedness of the Corporation or any Restricted Subsidiary
arising with respect to Interest Rate Agreement Obligations and
Currency Agreement Obligations Incurred for the purpose of fixing or
hedging interest rate risk or currency risk;
(v) Indebtedness represented by performance, completion,
guarantee, surety and similar bonds provided by the Corporation or any
Restricted Subsidiary in the ordinary course of business;
(vi) Indebtedness Incurred by the Corporation or any of its
Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit or other instruments issued in the
ordinary course of business, including without limitation letters of
credit in respect of workmen's compensation claims or self-insurance
or securing
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obligations of the Corporation or any Restricted Subsidiary under
operating leases; provided that upon drawing of such letters of credit
or other instrument such drawings are reimbursed within 30 days
following demand for reimbursements;
(vii) Indebtedness Incurred in connection with or given in
exchange for the renewal, extension, modification, amendment,
refunding, defeasance, refinancing or replacement (a "refinancing") of
any of the Securities or any Existing Indebtedness or any Indebtedness
issued after the Issue Date and not Incurred in violation of the
Indenture ("Refinancing Indebtedness"); provided, however, that (a)
the principal amount of such Refinancing Indebtedness shall not exceed
the principal amount (or accreted amount, if less) of the Indebtedness
so refinanced at the time outstanding (or obtainable under any
outstanding revolving credit or similar agreement) (plus the premiums
paid in connection therewith and the reasonable expenses incurred in
connection therewith); (b) with respect to Subordinated Indebtedness
being refinanced, the Stated Maturity of the Refinancing Indebtedness
shall be not earlier than the Stated Maturity of the Indebtedness
being refinanced, and such Refinancing Indebtedness shall have an
Average Life at the time such Refinancing Indebtedness is incurred
that is equal to or greater than the remaining Average Life of the
Indebtedness being Refinanced; (c) with respect to Subordinated
Indebtedness of the Corporation being refinanced, such Refinancing
Indebtedness shall rank no more senior than, and shall be at least as
subordinated in right of payment to the Securities as the Indebtedness
being refinanced; and (d) the obligor on such Refinancing Indebtedness
shall be the obligor on the Indebtedness being refinanced or the
Corporation or another Restricted Subsidiary;
(viii) Indebtedness of the Corporation or any Restricted
Subsidiary (a) representing Capital Lease Obligations and (b) in
respect of Purchase Money Obligations for property acquired in the
ordinary course of business, which taken together do not exceed $3
million in aggregate amount at any time outstanding;
(ix) Indebtedness of Foreign Subsidiaries of the Corporation not
to exceed a principal amount outstanding at any time of $5 million in
the aggregate for all Foreign Subsidiaries; and
(x) Guarantees by the Corporation or any Restricted Subsidiary of
Indebtedness of the Corporation or any Restricted Subsidiary that was
permitted to be Incurred pursuant to another provision of this
covenant;
(xi) Indebtedness of a Restricted Subsidiary engaged in providing
lease or similar financing to customers of the
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Corporation or its Restricted Subsidiaries, not exceeding 7.5% of
Consolidated Total Assets; and
(xii) Indebtedness of the Corporation or any Restricted
Subsidiary in addition to that described in clauses (i) through (xi )
above, and any refinancings of such Indebtedness, so long as the
aggregate principal amount of all such Indebtedness Incurred pursuant
to this clause (xii) does not exceed $15 million plus 75% of the
amount by which accounts receivable (net of reserves) of the
Corporation and its Restricted Subsidiaries (as shown in the
Corporation's most recent consolidated balance sheet) exceeds $15
million.
Any Indebtedness of a Person existing at the time such Person becomes
a Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise; an "Acquired Person") shall be deemed to be Incurred by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
SECTION 4.04 Limitation on Restricted Payments. The Corporation will
not, and will not permit any Restricted Subsidiary to, directly or indirectly,
make any Restricted Payment (including any Restricted Investment), unless at the
time of and immediately after giving effect to the proposed Restricted Payment
(with the value of any such Restricted Payment, if other than cash, to be
determined reasonably and in good faith by the Board of Directors of the
Corporation), (i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof, (ii) the Corporation could
Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph
under Section 4.03 and (iii) the aggregate amount of all Restricted Payments
made after the Issue Date shall not exceed the sum of (a) an amount equal to 50%
of the Corporation's aggregate cumulative Consolidated Net Income accrued on a
cumulative basis during the period (treated as one accounting period) beginning
on January 1, 1998 and ending on the last day of the fiscal quarter of the
Corporation immediately preceding the date of such proposed Restricted Payment
(or, if such aggregate cumulative Consolidated Net Income for such period shall
be a deficit, minus 100% of such deficit), plus (b) (x) the aggregate amount of
all Net Proceeds received since the Issue Date by the Corporation from the
issuance and sale (other than to a Restricted Subsidiary) of Capital Stock
(other than Disqualified Stock), and (y) an amount equal to the amount (as shown
on the Corporation's most recent consolidated balance sheet, prepared in
accordance with GAAP) of all Indebtedness or Disqualified Stock that, after the
Issue Date, is converted into or exchanged for Capital Stock of the Corporation
(other than Disqualified Stock) (less the amount of any cash or property
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distributed by the Corporation upon such conversion or exchange), plus (c) the
amount of the net reduction in Investments by the Corporation or its Restricted
Subsidiaries in Unrestricted Subsidiaries resulting from (x) the payment of
dividends or the repayment in cash of the principal of loans or the net proceeds
from the sale of the Capital Stock or assets of such Unrestricted Subsidiaries
or other cash return on such Investment, in each case to the extent received by
the Corporation or any Restricted Subsidiary of the Corporation, (y) the release
or extinguishment of any guarantee of Indebtedness of any Unrestricted
Subsidiary, and (z) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries of the Corporation (valued as provided in the definition of
"Investment"), such aggregate amount of the net reduction in Investments not to
exceed the amount of Restricted Investments previously made by the Corporation
or any Restricted Subsidiary of the Corporation in such Unrestricted
Subsidiaries, which amount was included in the calculation of the amount of
Restricted Payments. For purposes of the foregoing clause (c), the Corporation
shall be deemed to have made a Restricted Investment under the Indenture in an
amount equal to any cash contribution made or subscribed for by the Corporation
on or immediately prior to the Issue Date to one or more Unrestricted
Subsidiaries.
In addition, so long as there is no Default or Event of
Default continuing, the following payments and other actions shall be expressly
permitted notwithstanding anything contained in the covenant described above
(collectively, "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such payment would
have been permitted under the Indenture and such payment shall be
deemed to have been paid on such date of declaration for purposes of
clause (iii) of the preceding paragraph;
(ii) the redemption, repurchase, retirement or other acquisition
of any Capital Stock or any Indebtedness of the Corporation that is
subordinated in right of payment to the Notes in exchange for, or out
of the proceeds of, the substantially concurrent sale (other than to a
Restricted Subsidiary) of Capital Stock of the Corporation (other than
any Disqualified Stock);
(iii) any purchase or defeasance of Subordinated Indebtedness to
the extent required upon a Change of Control or Asset Sale (as defined
herein) by this Indenture or other agreement or instrument pursuant to
which such Subordinated Indebtedness was issued, but only if the
Corporation (x) in the case of a Change of Control, has complied with
its obligations under Section 4.10 or (y) in the case of an
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Asset Sale has applied the Net Available Cash from such Asset Sale in
accordance with the provisions of Section 4.05 of this Indenture;
(iv) any Restricted Investments made with the proceeds of the
substantially concurrent sale of Capital Stock (other than
Disqualified Stock);
(v) Restricted Investments in any Unrestricted Subsidiary engaged
in providing lease or similar financing to customers of the
Corporation and its Restricted Subsidiaries, in an amount such that
the sum of the aggregate amount of Restricted Investments made
pursuant to this clause (v) after the Issue Date and outstanding on
the date of determination does not exceed the greater of $5 million or
7.5% of Consolidated Total Assets;
(vi) the repurchase of Capital Stock of the Corporation
(including options, warrants or other rights to acquire such Capital
Stock) from directors, officers or employees (or their nominees) of
the Corporation or its Subsidiaries pursuant to the terms of an
employee benefit plan or employment agreement or similar arrangement;
provided that an aggregate amount of all such repurchases (net of
repayments or cancellations of indebtedness as a result of such
repurchases) shall not exceed $1 million in any fiscal year;
(vii) the redemption or repurchase of the Corporation's
Noncumulative Redeemable Preferred Stock at a price not to exceed 100%
of liquidation value; provided, however, that the aggregate amount of
all payments pursuant to this clause (vii) shall not exceed 100% of
cumulative Consolidated GAAP Net Income accrued during the period from
January 1, 1998 to the date of payment (treated as one accounting
period); and
(viii) Restricted Payments (other than a dividend or other
distribution declared on any Capital Stock of the Corporation or a
payment to purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Corporation) not to exceed $1 million in the
aggregate.
For purposes of clause (iii) of the first paragraph of this covenant,
Permitted Payments made pursuant to clauses (i), (vi) and (vii) of the
immediately preceding paragraph shall be included (without duplication) as
Restricted Payments made since the Issue Date.
SECTION 4.05 Limitation on Asset Sales. (a) The Corporation will not,
and will not permit any Restricted Subsidiary to, make any Asset Sale unless (i)
the Corporation or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to
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the fair market value of the assets or other property sold or disposed
of in the Asset Sale and (ii) at least 75% of such consideration
consists of either cash or Cash Equivalents, provided, however, that,
at the option of the Corporation, clause (ii) shall not be applicable
to Asset Sales (or portions of Asset Sales) to the extent the
Corporation shall apply cash and Cash Equivalents available from other
sources to make any required Asset Sale Offer as if 75% of such
consideration had consisted of cash and Cash Equivalents.
For the purposes of this covenant, the following will be deemed to be
cash: (x) the assumption by the transferee of Indebtedness of the Corporation or
Indebtedness of any Restricted Subsidiary of the Corporation and the release of
the Corporation or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Sale (in which case the Corporation
shall, without further action, be deemed to have applied such assumed
Indebtedness in accordance with clause (A) of the preceding paragraph) and (y)
securities received by the Corporation or any Restricted Subsidiary of the
Corporation from the transferee that are promptly (and in any event within 120
days) converted by the Corporation or such Restricted Subsidiary into cash.
(b) Within 365 days after any Asset Sale, the Corporation may elect to
apply the Net Available Cash from such Asset Sale to (i) permanently reduce or
redeem any Senior Debt of the Corporation or a Restricted Subsidiary and/or (ii)
make an Investment in, or acquire assets and properties that will be used in the
business of the Corporation and its Restricted Subsidiaries, and (iii) any
balance of such Net Available Cash exceeding $10 million and not applied or
invested as provided in clauses(i) and (ii) within 365 days of such Asset Sale,
will be deemed to constitute "Excess Proceeds" and shall be applied to make an
offer to purchase Securities to the holders of the Securities. Pending the final
application of any such Net Available Cash, the Corporation may temporarily
invest such Net Available Cash in cash or Cash Equivalents.
(c) In the event of an Asset Sale that requires the purchase of
Securities pursuant to clause (b)(iii) above, the Corporation will be required
to purchase Securities tendered pursuant to an offer by the Corporation for the
Securities (the "Offer") at a purchase price of 100% of their principal amount
plus accrued and unpaid interest, if any, to the purchase date in accordance
with the procedures (including prorating in the event of oversubscription) set
forth in Section 4.05(d) below. If the
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aggregate purchase price of the Securities tendered pursuant to the Offer is
less than the Net Available Cash allotted to the purchase of the Securities, the
Corporation will apply the remaining Net Available Cash to general corporate
purposes not prohibited by this Indenture. Upon the consummation of any Asset
Sale Offer, the amount of Excess Proceeds shall be deemed to be reset to zero.
(d) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to the prorationing as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date of not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum will
include (1) the most recently filed Annual report on 10-K (including audited
consolidated financial statements) of the Company, the most recent subsequently
filed Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the
Company filed subsequent to such Quarterly report, other than Current Reports
describing Asset Sale otherwise described in the offering materials (or
corresponding successor reports), (ii) a description of material developments in
the Company's business subsequent to the date of the latest of such reports, and
(iii) if material, appropriate pro forma financial information and all
instructions and materials necessary to tender Securities pursuant to the Offer,
together with the information contained in clause (3)
(2) Not later than the date upon which the written notice of an
Offer is delivered to the Trustee as provided below, the Company shall deliver
to the Trustee an Officers' Certificate as to (i) the amount of the Offer (the
"Offer Amount"), (ii) the allocation of the Net Available Cash from the Asset
Sale pursuant to which such Offer is being made and (iii) the compliance of such
allocation with the provisions of Section 4.05(a). On such date, the Company
shall also irrevocably deposit with the Trustee or with a paying agent (or, if
the Company is acting as its own paying agent, segregate and hold in trust) in
cash or Cash Equivalents maturing on the day prior to the Purchase Date or on
the Purchase Date if funds are immediately available by open of business an
amount equal to the Offer Amount to be held for payment in accordance with the
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provisions of this Section. Upon the expiration of the period for which the
Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee or the Paying Agent for cancellation the Securities or portions thereof
which have been properly tendered to and are to be accepted by the Company. The
Trustee shall, on the Purchase date, mail or deliver payment to each tendering
Holder in the amount of the purchase price. In the event that the aggregate
purchase price of the Securities delivered by the Company to the Trustee is less
than the Offer Amount, the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section.
(3) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business day prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000 or
integral multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for the purchase, the Company will also deliver an
Officers' Certificate stating that such Securities are to accepted by the
Company pursuant to and in accordance with the terms of this Section. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(e) The Corporation will comply, to the extent applicable, with the
requirements of Section 14 (e) of the Exchange Act and any other applicable
securities laws or regulations in connection with the repurchase of Securities
pursuant to this Indenture and will not be deemed to have breached its
obligations under this Indenture by virtue thereof.
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SECTION 4.06 Limitation on Liens. The Corporation will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer
to exist any Lien securing any Indebtedness (other than (1) Indebtedness
described in paragraphs (a) (ii) and (b) (ii), (vii)(to the extent the
Refinanced Indebtedness was secured by a Lien permitted by this Indenture), (xi)
and (xii) of the provisions of Section 4.03 of this Indenture; and (2)
Indebtedness of an Acquired Person existing at the date such Person became a
Restricted Subsidiary, and any refinancing thereof, provided however, that such
Lien is not applicable to any Person or the properties or assets of any Person,
other than the Acquired Person ) on any asset now owned or hereafter acquired,
unless the Notes are equally and ratably secured thereby.
SECTION 4.07 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Corporation will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to (i) pay dividends or make any
other distributions to the Corporation or any other Restricted Subsidiary on its
Capital Stock, or pay any Indebtedness owed to the Corporation or any other
Restricted Subsidiary, make loans or advances to the Corporation or any other
Restricted Subsidiary or (iii) transfer any of its properties or assets to the
Corporation or any other Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of
(1) any agreement or instrument evidencing or governing any Existing
Indebtedness and any refinancings thereof;
(2) applicable law;
(3) any instrument governing Indebtedness or Capital Stock of an
Acquired Person acquired by the Corporation or any of its Restricted
Subsidiaries as in effect at the time of such acquisition or any
refinancing thereof; provided, however, that such restriction is not
applicable to any Person, or the properties or assets of any Person, other
than the Acquired Person;
(4) by reason of customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past practices;
(5) Purchase Money Indebtedness for property acquired in the ordinary
course of business that only impose restrictions on the property so
acquired;
(6) an agreement for the sale or disposition of the Capital Stock or
assets of such Restricted Subsidiary;
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provided, however, that such restriction is only applicable to such
Restricted Subsidiary or assets, as applicable, and such sale or
disposition otherwise is permitted under Section 4.05 of this Indenture;
(7) Refinancing Indebtedness permitted under the Indenture; provided,
however, that the restrictions contained in the agreements governing such
Refinancing Indebtedness are not materially more restrictive in the
aggregate than those contained in the agreements governing the Indebtedness
being refinanced immediately prior to such refinancing;
(8) the Indenture and the Securities; arising or agreed to in the
ordinary course of business, not relating to any Indebtedness, and that do
not, individually or in the aggregate, detract from the value of property
or assets of the Corporation or any Restricted Subsidiary in any manner
material to the Corporation or any Restricted Subsidiary; or
(9) any instrument governing Indebtedness of a Foreign Subsidiary
which is permitted by the terms of the Indenture.
Nothing contained in this Section 4.07 shall prevent the Corporation
or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted in the Section 4.06 covenant or (2)
restricting the sale or other disposition of property or assets of the
Corporation or any of its Restricted Subsidiaries that secure Indebtedness of
the Corporation or any of its Restricted Subsidiaries.
SECTION 4.08 Limitation on Transactions with Affiliates. The
Corporation will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, enter into any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or lease of assets,
property or services) with any Affiliate of the Corporation (other than the
Corporation or a Restricted Subsidiary) unless (1) such transaction or series of
transactions is on terms that are not materially less favorable to the
Corporation or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party, and (2) the Corporation delivers to the Trustee, with respect to
any transaction or series of related transactions involving aggregate payments
in excess of $5.0 million, an Officers' Certificate certifying that such
transaction or series of related transactions has been approved by a majority of
the members of the Board of Directors of the Corporation and evidenced by a
resolution of the Board of
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Directors set forth in an Officers' Certificate. Notwithstanding the foregoing,
this covenant will not apply to
(i) employment agreements, compensation or employee benefit
arrangements, stock options or stock purchase plans or agreements with or
for the benefit of any officer, director or employee of the Corporation
entered into in the ordinary course of business and approved by the Board
of Directors of the Corporation (including loans and stock repurchase
arrangements thereunder, customary fringe benefits and including
reimbursement or advancement of out of pocket expenses, loans to officers,
directors and employees in the ordinary course of business, reasonable fees
paid to directors who are not employees of the Corporation, and director's
and officer's liability insurance and indemnification arrangements);
(ii) any transaction entered into by or among the Corporation or one
of its Restricted Subsidiaries with one or more Restricted Subsidiaries of
the Corporation;
(iii) the sale, discount or other disposition of accounts receivable
or inventory to one or more Unrestricted Subsidiaries engaged in financing
receivables for the benefit of the Corporation or in providing lease or
similar financing to customers of the Corporation;
(iv) any Restricted Payment not prohibited by the provisions of
Section 4.04 of this Indenture;
(v) transactions permitted by, and complying with, the provisions of
Section 5.01 of this Indenture;
(vi) any sale or issuance of Capital Stock (other than Disqualified
Stock) of the Corporation;
(vii) the grant or performance of registration rights with respect to
securities of the Corporation; and
(viii) transactions in which the Corporation or any of its Restricted
Subsidiaries delivers to the Trustee an opinion from an independent
nationally recognized financial advisor stating that such transaction is
fair to the Corporation or such Restricted Subsidiary from a financial
point of view and meets the requirements of clauses (1) and (2) above.
SECTION 4.09 Limitation on Designation of Unrestricted Subsidiaries.
The Corporation will not designate any Subsidiary of the Corporation (other than
a newly created Subsidiary in which no Investment in excess of $1,000 has
previously been made) as an "Unrestricted Subsidiary" under the Indenture (a
"Designation") after the Issue Date unless:
(a) no Default shall have occurred and be continued at the time of or
after giving effect to such Designation; and
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(b) the Corporation would not be prohibited under the Indenture from
making an Investment at the time of Designation in an amount (the
"Designation Amount") equal to the fair market value of such Restricted
Subsidiary on such date.
In the event of any such Designation, the Corporation shall be deemed
to have made an Investment constituting a Restricted Payment pursuant to the
provisions of Section 4.04 of this Indenture for all purposes of the Indenture
in the Designation Amount. Neither the Corporation nor any Restricted Subsidiary
shall at any time (x) provide a Guarantee of or similar undertaking (including
any undertaking, agreement or instrument evidencing such Indebtedness) with
respect to any Indebtedness of an Unrestricted Subsidiary; provided that the
Corporation and its Restricted Subsidiaries may pledge Capital Stock or
Indebtedness of any Unrestricted Subsidiary on a nonrecourse basis such that the
pledgee has no claim whatsoever against the Corporation other than to obtain
such pledged property or (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary, except to the extent permitted
under the provisions of Section 4.04 of this Indenture.
The Corporation may not revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"), unless:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation shall be deemed to have
been incurred at such time and shall have been permitted to be incurred for
all purposes of the Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions delivered to the Trustee certifying compliance with the foregoing
provisions.
SECTION 4.10 Change of Control. (a) Upon a Change of Control, each
Holder shall have the right to require that the Corporation repurchase such
Holder's Securities at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on a record date to receive interest
on the relevant interest payment date), in accordance with the terms
contemplated in Section 4.10(b).
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(b) Within 30 days following any Change of Control, the Corporation
shall mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on a record date to receive interest on the relevant
interest payment date);
(2) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(3) the procedures determined by the Company, consistent with
this Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than three Business Days prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(d) On the purchase date, all Securities to be purchased by the
Company under this Section shall be delivered to the Trustee for cancellation,
and the Company shall pay the purchase price plus accrued and unpaid interest,
if any, to the Holders entitled thereto.
(e) The Corporation shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Corporation shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
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SECTION 4.11 Compliance Certificate; Notice of Defaults. The
Corporation shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Corporation an Officers' Certificate stating that in the
course of the performance by the signers of such Certificate of their duties as
Officers of the Corporation they would normally have knowledge of any Default by
the Corporation and whether or not the signers know of any Default or Event of
Default that occurred during such period. If they do know of such a Default or
Event of Default, the certificate shall describe the Default or Event of
Default, its status and what action the Corporation is taking or proposes to
take with respect thereto.
Promptly after an Officer of the Corporation obtains knowledge of a
Default or Event of Default under this Indenture, the Corporation will deliver
to the Trustee an Officers' Certificate specifying such Default or Event of
Default and what action the Corporation is taking or proposes to take with
respect thereto.
SECTION 4.12 Further Instruments and Acts. The Corporation will, upon
request of the Trustee, execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Article 5
Successor Corporation
SECTION 5.01 When Corporation May Merge or Transfer Assets. The
Corporation shall not consolidate with or merge with or into, or convey or
transfer or lease in one transaction or a series of related transactions, all or
substantially all of its assets to, another Person unless:
(i) the resulting, surviving or transferee Person (the "Successor
Corporation") shall be a Person organized and existing under the laws of
the United States or any State thereof or the District of Columbia, and (if
not the Corporation) shall assume by supplemental indenture all the
obligations of the Corporation under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction, no Default
shall have happened and be continuing;
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(iii) immediately after giving effect to such transaction, the
Corporation would be able to incur an additional $1.00 of Indebtedness
pursuant to Section 4.03(a); and
(iv) the Corporation shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture. The Trustee shall be entitled to rely conclusively
upon such Officers' Certificate and Opinion of Counsel.
The resulting, surviving or transferee Person shall be the successor
Corporation hereunder, and, in the case of any such transfer, the predecessor
Corporation shall be released from its obligations under this Indenture.
Notwithstanding the foregoing clauses (ii), (iii) and (iv), any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its property and assets to the Corporation.
Article 6
Defaults and Remedies
SECTION 6.01 Events of Default. An "Event of Default" occurs if:
(1) the Corporation defaults in the payment of interest on any
Security when the same becomes due and payable, and such default continues
for a period of 30 days;
(2) the Corporation (i) defaults in the payment of the principal of
any Security when the same becomes due and payable at its Stated Maturity,
upon redemption, upon declaration or otherwise; or (ii) fails to redeem or
purchase any securities when required pursuant to the Indenture or the
Securities;
(3) the Corporation fails to observe or perform any of its covenants
or agreements set forth in Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07,
4.08, 4.09, 4.10, 4.11 or 4.12 (other than the failure to purchase
Securities when required under Section 4.05 or Section 4.10) and 5.01
hereof and the Default continues for a period of 30 days after the notice
specified below;
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(4) the Corporation fails to observe or perform any of its covenants
or agreements set forth in the Securities or in this Indenture other than
the covenants and agreements specified in clause (1), (2) or (3) above and
the Default continues for a period of 60 days after the notice specified
below;
(5) a default or event of default (as such term is defined in the
instrument or agreement under which any Indebtedness is issued) occurs
under any instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness of the Corporation or any
Significant Subsidiary (other than Indebtedness of a Restricted Subsidiary
incurred pursuant to Section 4.03)and the holders of such Indebtedness have
accelerated such Indebtedness or any default occurs in the payment of the
principal amount of such Indebtedness at final maturity if the total of all
such Indebtedness which has been so accelerated and all such Indebtedness
which is overdue shall exceed $5,000,000 or its foreign currency equivalent
at the time, and there shall have been a failure to obtain rescission or
annulment of all such accelerations or to pay in full the amount in default
(together with any applicable interest) by the later of the expiration of
any applicable grace period or 10 days after the notice specified below;
(6) any judgment or decree for the payment of money in excess of $5.0
million or its foreign currency equivalent at the time is entered against
the Corporation or any Significant Subsidiary, remains outstanding for a
period of 60 days after the entry of such judgment or decree and is not
discharged, waived or the execution thereof stayed within 10 days after the
notice specified below;
(7) the Corporation or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to insolvency; or
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(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Corporation or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Corporation or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Corporation or
any Significant Subsidiary;
or any similar relief is granted under any foreign laws; and the order or decree
remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4), (5) or (6) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Corporation of the Default and the Corporation does not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".
The Corporation shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (1), (2), (3), (4), (5) or (6) hereof, its status
and what action the Corporation is taking or proposes to take with respect
thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than an Event
of Default specified in Section 6.01(7) or (8) with respect to the Corporation)
occurs and is continuing, the Trustee by notice to the Corporation, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Corporation and the Trustee may declare the principal of and accrued interest on
all the Securities to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Corporation
occurs, the principal of and all accrued interest on the Securities shall
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ipso facto become immediately due and payable without any declaration or other
action on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or Event of Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
in the payment of the principal or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.02 cannot be amended without the
consent of the Securityholders affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.
SECTION 6.05 Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture or, subject to
Section 7.01, that the Trustee determines is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to
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taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06 Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee reasonable security or indemnity against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, provision of
security or indemnity; and
(5) the Holders of a majority of principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07 Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee. If an Event of Default in
payment of interest or principal specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Corporation for the whole amount of principal
and interest remaining unpaid and the amounts provided for in Section 7.07.
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SECTION 6.09 Trustee May File Proofs of Claim. Subject to Section
6.05, the Trustee may file such proofs of claim and other papers or documents
and take other action including participating as a member (voting or otherwise)
of any committee of creditors appointed in the matter as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Corporation, its creditors
or its property and, unless prohibited by law or applicable regulations, may
vote on behalf of the Holders in any election of a trustee in bankruptcy or
other person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and its counsel,
and any other amounts due the Trustee under Section 7.07.
SECTION 6.10 Priorities. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Corporation.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Corporation shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits
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and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
Securities.
SECTION 6.12 Waiver of Stay or Extension Laws. The Corporation (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Corporation
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law; and shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
Article 7
Trustee
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise its rights and powers and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use in the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default known to the
Trustee:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall be read into this
Indenture; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction in
writing received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree with the Corporation.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) The Trustee shall not be deemed to know of any Default (other than
those under Sections 6.01 and 6.02) or other fact or circumstances upon the
occurrence of which it may be require to take action hereunder unless and until
one of its Trust Officers receives written notice of or has actual knowledge
thereof.
(h) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risks or liabilities is not reasonably assured
to it.
(i) Every provision of the Indenture relating to the conduct or
affecting the liability or affording protection to the Trustee shall be subject
to the provisions of this Section and to the applicable provisions of the TIA.
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SECTION 7.02 Rights of Trustee. (a) The Trustee may conclusively rely
on, and shall be protected from acting or refraining from acting based upon, any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall comply with the
provisions of Section 11.05. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Officers' Certificate or
Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers provided that the Trustee's conduct does not constitute negligence or bad
faith.
SECTION 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Corporation or its Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent, Registrar or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Corporation's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Corporation in this Indenture, pursuant to
this Indenture or any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication.
SECTION 7.05 Notice of Default. If a Default or an Event of Default
occurs and is continuing and the Trustee has knowledge of such event, the
Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 90 days after the occurrence thereof, unless such Default or
Event of Default has been cured. Except in the case of a Default in payment of
principal of or interest on any Security, the Trustee may withhold the notice if
and as long as a committee of
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its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders.
SECTION 7.06 Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee if required by TIA ss. 313(a) shall mail to each Securityholder a brief
report dated as of May 15 that complies with TIA ss. 313(a). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Corporation agrees promptly to notify the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07 Compensation and Indemnity. The Corporation shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Corporation shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents and counsel. The Corporation shall indemnify the Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it without negligence or bad faith on its part in connection with
the administration of this trust and the performance of its duties hereunder.
The Trustee shall promptly notify the Corporation promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Corporation
shall not relieve the Corporation of its obligations hereunder. The Corporation
shall defend the claim and the Trustee may have separate counsel and the
Corporation shall pay the fees and expenses of such counsel. The Corporation
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee through negligence or bad faith.
To secure the Corporation's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of and
interest on particular Securities.
The Corporation's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of an Event of Default specified in subsection 6.01(6) or (7),
the expenses are
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intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08 Replacement of Trustee. The Trustee may resign at any
time by so notifying the Corporation. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee in
writing and may appoint a successor Trustee. The Corporation may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring trustee) the Corporation shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Corporation. Immediately after
receiving such acceptance, the retiring Trustee shall transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07, the resignation or removal of the retiring Trustee shall then
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Corporation or
the Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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SECTION 7.09 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a)(1). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b), including the optional provision permitted by the second sentence of
TIA ss. 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA ss. 310(b)(2) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Corporation are outstanding if the requirement for such exclusions set forth
in TIA ss. 310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Corporation.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
Article 8
Satisfaction and Discharge of Indenture
SECTION 8.01 Discharge of Liability on Securities; Defeasance. (a)
When (i) the Corporation delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.08) for cancellation or
(ii) all
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outstanding Securities have become due and payable and the Corporation
irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Securities including interest thereon if any
(other than Securities replaced pursuant to Section 2.08), and if in either case
the Corporation pays all other sums payable hereunder by the Corporation, then
this Indenture shall, subject to Sections 8.01(c) and 8.06, cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Corporation accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Corporation.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, the Corporation at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02 through 4.12 and Section 5.01(a)(iii) and the operation of Sections
6.01(3), 6.01(4), 6.01(5), 6.01(6) and 6.01(7)(with respect to Significant
Subsidiaries) ("covenant defeasance option"). The Corporation may exercise its
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Corporation exercises its legal defeasance option, the
Securities may not be accelerated because of an Event of Default. If the
Corporation exercises its covenant defeasance option, the Securities, may not be
accelerated because of an Event of Default specified in Sections 6.01(3), (4),
(5), (6) and (7) (with respect to Significant Subsidiaries) or because of the
failure of the Corporation to comply with Section 5.01(a)(iii).
Before or after a deposit, the Corporation may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
Upon satisfaction of the conditions set forth herein and upon request
of the Corporation, the Trustee shall acknowledge in writing the discharge of
those obligations that the Corporation terminates.
(c) Notwithstanding clauses (a) and (b) above, the Corporation's
obligations in Sections 2.03, 2.04, 2.05, 2.08, 2.09, 7.07, 7.08, 8.04, 8.05 and
8.06 shall survive until the Securities have been paid in full. Thereafter the
Corporation's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02 Conditions to Defeasance. The Corporation may exercise
its legal defeasance option or its covenant defeasance option only if:
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(1) the Corporation irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal and
interest on the Securities to maturity or redemption, as the case may be;
(2) the Corporation delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts (but not more than such amounts) as will be sufficient to pay
principal and interest when due on all the Securities to maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123 day
period no Event of Default specified in Section 6.01(7) or (8) (without
giving effect to the period of time referred to therein) occurs which is
continuing at the end of the period;
(4) no Default or Event of Default has occurred and is continuing on
the date of such deposit and after giving effect thereto and is not
prohibited by Article 10;
(5) the Corporation delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not constitute,
or is qualified as, a regulated investment Corporation under the Investment
Corporation Act of 1940;
(6) In the case of the legal defeasance option, the Corporation shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Corporation has received from, or there has been published by, the Internal
revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Security holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Corporation
shall have delivered to the Trustee an opinion of Counsel to the effect
that the Securityholders will not
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recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and
(8) the Corporation delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
SECTION 8.03 Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to Section
8.02. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities. Money and securities
so held in trust are not subject to Article 10.
SECTION 8.04 Repayment to Corporation. The Trustee and the Paying
Agent shall promptly turn over to the Corporation upon request any excess money
or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Corporation upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years
and, thereafter, Securityholders entitled to the money must look to the
Corporation for payment as general creditors.
SECTION 8.05 Indemnity for Government Obligations. The Corporation
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Corporation's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8;
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provided, however, that if the Corporation has made any payment of interest on
or principal of any Securities because of the reinstatement of its obligations,
the Corporation shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money or U.S. Government Obligations
held by the Trustee or Paying Agent.
Article 9
Amendments, Supplements and Waivers
SECTION 9.01 Without Consent of Holders. The Corporation and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to add to the covenants of the Corporation for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Corporation;
(5) to comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA; or
(6) to make any change that does not adversely affect the rights of
any Securityholder.
SECTION 9.02 With Consent of Holders. The Corporation may amend or
supplement this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. The Holders of a majority in principal amount of the
Securities may waive any past default or compliance by the Corporation with any
provision of this Indenture or the
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Securities without notice to any Securityholder. However, without the consent of
each Securityholder affected, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the fixed maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time whereby any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Section 6.04 or 6.07 or this Section; or
(7) waive any Default in the payment of principal of or interest on
any Security.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section becomes effective, the
Corporation shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment otherwise
validly adopted under this Section 9.02.
SECTION 9.03 Compliance with Trust Indenture Act. Every amendment to
or supplement of this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 9.04 Revocation and Effect of Consents. A consent to an
amendment, supplement or waiver by a Holder of a Security shall bind the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on the Security. However, any such Holder or
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subsequent Holder may revoke the consent as to such Holder's Security or portion
of the Security if the Trustee receives the notice of revocation before the date
the amendment, supplement or waiver becomes effective. After an amendment,
supplement or waiver becomes effective in accordance with Section 9.01 or 9.02,
it shall bind every Securityholder.
The Corporation may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05 Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Corporation or the Trustee so
determines, the Corporation in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall sign any
amendment, supplement or waiver authorized pursuant to this Article if the
amendment, supplement or waiver does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may but need
not sign it. In signing such amendment, supplement or waiver the Trustee shall
be entitled to receive an indemnity satisfactory to it and to receive, and
(subject to Section 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment, supplement or
waiver is authorized or permitted by this Indenture.
SECTION 9.07 Payment for Consent. Neither the Corporation nor any
Affiliate of the Corporation shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid to all Holders that so
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consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
Article 10
Miscellaneous
SECTION 10.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 10.02 Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by
first-class mail addressed as follows:
if to the Corporation:
Ampex Corporation
500 North Broadway
Redwood City, California 94063
if to the Trustee:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 11704
Attention: Corporate Trust Administration
The Corporation or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
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SECTION 10.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Corporation, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
SECTION 10.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Corporation to the Trustee to take any action
or refrain from taking any action under this Indenture, the Corporation shall
furnish to the Trustee upon the Trustee's request:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 10.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
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 statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such covenant or condition has been complied with.
SECTION 10.06 When Treasury Securities Disregarded. In determining
whether the Holders of the required principal
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amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Corporation or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Corporation shall be disregarded and deemed not to be outstanding, except that
for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Securities which the Trustee
knows are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 10.07 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 10.08 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 10.09 Governing Law. The laws of the State of New York shall
govern this Indenture and the Securities without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
SECTION 10.10 No Recourse Against Others. No director, officer,
employee or stockholder, as such, of the Corporation shall have any liability
for any obligations of the Corporation under the Securities or this Indenture or
for any claim based on, or in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder shall waive and
release all such liability.
SECTION 10.11 Successors. All agreements of the Corporation in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
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SECTION 10.12 Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
AMPEX CORPORATION,
By: /s/ CRAIG L. MCKIBBEN
--------------------------
Title: Vice President
IBJ SCHRODER BANK & TRUST COMPANY,
Trustee
By: /s/ TERENCE RAWLINS
-------------------------------
Title: Assistant Vice President
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EXHIBIT A
[RESTRICTIVE LEGENDS IF APPLICABLE]
[OID LEGEND IF APPLICABLE]
CUSIP NO. ____
[FORM OF FACE OF SECURITY]
No.
$
AMPEX CORPORATION
12% Senior Note Due 2003
Ampex Corporation, a Delaware corporation, promises to pay to
___________________________________, or registered assigns, the principal sum of
________________________ Dollars on March 15, 2003.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 1998.
Record Dates: March 1 and September 1, commencing September 1, 1998.
Additional provisions of this Security are set forth on the following
pages of this Security.
Dated:
AMPEX CORPORATION,
By:
President
Assistant Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
[SEAL]
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee, certifies that this is
one of the Securities referred to
in the Indenture.
by
-----------------------------------
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
12% Senior Note Due 2003
1. Interest
Ampex Corporation, a Delaware corporation ("Corporation"), promises to
pay interest on the principal amount of this Security at the rate per annum
shown above. The Corporation will pay interest in cash to Holders of record at
the close of business on the March 1st and September 1st immediately preceding
the interest payment date on March 15 and September 15 of each year, commencing
September 15, 1998. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
_____________ 15, 1998. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. Method of Payment
The Corporation will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the close
of business on the March 1 or September 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Corporation will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Corporation may pay principal
and interest by check payable in such money. It may mail an interest check to a
Holder's registered address. At its option, the Corporation may pay principal
and interest by wire transfer to an account designated in writing by the Holder.
3. Paying Agent and Registrar
Initially, IBJ Schroder Bank & Trust Company, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Corporation
may appoint and change any Paying Agent, Registrar or co-registrar without prior
notice to any holder, but will promptly notify the Trustee of any change. The
Corporation or any of its Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
634606.8
2
<PAGE>
4. Indenture
The Corporation issued the Securities under an Indenture dated as of
January 28, 1998 ("Indenture"), between the Corporation and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
The Securities are subject to all such terms, and Securityholders are referred
to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the Corporation
limited to $50,000,000 aggregate principal amount (subject to Section 2.10 of
the Indenture). The Indenture imposes certain limitations on the payment of
dividends and other distributions by the Corporation and certain of its
Subsidiaries, the sale or transfer of assets, the sale or transfer of shares of
stock of certain of its Subsidiaries, the incurrence of debt by the Corporation
and certain of its Subsidiaries and transactions with affiliates.
5. Optional Redemption
The Corporation may not redeem the Securities prior to March 15, 2000.
On or after March 15, 2000, the Corporation may redeem the Securities at any
time as a whole, or from time to time in part, at the following redemption
prices (expressed as percentages of principal amount) plus accrued interest to
the redemption date:
Optional
Redemption
Period Price
------ ----------
Through March 14, 2001 106%
March 15, 2001 through March 14, 2002 104%
March 15, 2002 through September 14,2002 102%
September 15, 2002 and thereafter 100%
In addition, at any time prior to March 15, 2000, the Company may, at
its option, redeem up to 35% of the aggregate principal amount of the Securities
originally issued with the net cash proceeds of one or more Equity Offerings (as
defined in the Indenture), at 112% of the aggregate principal amount of the
Securities being redeemed plus accrued and unpaid interest, if any, to the date
of redemption. Any such redemption with the
634606.8
3
<PAGE>
proceeds for Equity Offering shall be made not more than 90 days after the date
of any such Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at the Holder's registered address. If money sufficient to pay the redemption
price and accrued interest on all Securities to be redeemed on the redemption
date is deposited with the Paying Agent prior to the redemption date, on and
after such date interest ceases to accrue on such Securities or portions of
them. Securities in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or before an interest payment date. The
Indenture imposes certain restrictions on the transfer of the Securities in
violation of the Securities Act.
8. Persons Deemed Owners
The registered holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Corporation at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Corporation (unless abandoned property law designates another person) and
not to the Trustee for payment.
634606.8
4
<PAGE>
10. Satisfaction and Discharge of Indenture
On the terms and subject to certain conditions specified in the
Indenture, the Corporation will be discharged from the Indenture and the
Securities (other than certain specified provisions) or will be discharged from
certain covenants under the Indenture and the Securities upon deposit with the
Trustee of moneys or U.S. Government Obligations sufficient to pay at maturity
or upon redemption all Securities not previously delivered to the Trustee for
cancellation, including principal and accrued interest and all other sums then
payable by the Corporation under the Indenture.
11. Amendment, Supplement, Waiver
Subject to certain exceptions, (i) the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in principal amount outstanding of the Securities, and (ii) any past
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions, without the consent of any
Securityholder, the Corporation and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities
or to make any change that does not adversely affect the rights of any
Securityholder.
12. Defaults and Remedies
Each of the following is an Event of Default: default for 30 days in
payment of any interest on the Securities; default in payment of any principal
of the Securities when the same becomes due and payable at stated maturity, upon
redemption, upon declaration or otherwise; failure by the Corporation for 30
days after notice to the Corporation by the Trustee or to the Corporation and
the Trustee by the Holders of at least 25% aggregate principal amount of the
Securities to comply with certain covenants and agreements in the Indenture
relating to the payment of dividends and other distributions by the Corporation
and Subsidiaries, the sale or transfer of assets, the incurrence of debt by the
Corporation and Subsidiaries, transactions with affiliates and certain mergers,
consolidations and transfers of assets; failure by the Corporation for 60 days
after notice to the Corporation by the Trustee or to the Corporation and the
Trustee by the Holders of at least 25% aggregate in principal amount of the
Securities to comply with certain other covenants
634606.8
5
<PAGE>
and agreements in the Indenture and the Securities; certain payment defaults
with respect to other indebtedness of the Corporation or certain of its
Subsidiaries, or other defaults resulting in the acceleration of such other
indebtedness, where the aggregate of such indebtedness exceeds $5,000,000; and
certain events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Holders of at least 25% in principal amount of the Securities
may declare the principal of and accrued interest on all the Securities to be
due and payable immediately. Securityholders may not enforce the Indenture or
the Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Corporation
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Corporation or its affiliates and may otherwise deal with the
Corporation or its affiliates with the same rights it would have if it were not
Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Corporation and the Trustee shall not have any liability for any obligations of
the Corporation under the Securities or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent on the other side of this
Security.
634606.8
6
<PAGE>
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Corporation has caused CUSIP numbers to
be printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Security holders. No representation
is made as to the accuracy of such numbers either as printed on the Securities
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Corporation will furnish to any Securityholder upon written
request and without charge to such Holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to: Ampex
Corporation, 500 North Broadway, Redwood City, California 94063, Attention of
Secretary.
18. Registration Rights
Pursuant to the Registration Rights Agreement described in the
Indenture, the Corporation will be obligated to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for the Corporation's 12% Senior Notes due 2003 (the "Exchange
Securities"), which will have been registered under the Securities Act, in like
principal amount and having terms identical in all material respects to the
Initial Securities. The Holders of the Initial notes shall be entitled to
receive certain additional interest in the event the exchange offer is not
consummated in accordance with the Registration Rights Agreement.
634606.8
7
<PAGE>
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the third anniversary of the Issue Date, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with such transfer and that such transfer is:
(Check One)
(1) _____ to the Corporation or a subsidiary thereof; or
(2) _____ to a "qualified institutional buyer" in compliance with Rule 144A
under the Securities Act of 1933, as amended; or
(3) _____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) _____ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) _____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) _____ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) _____ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
Registered Holder thereof, provided, that if box (3), (4), (5) or (7) is
checked, the Corporation or the Trustee may require, prior to registering any
such transfer of the Notes, in its sole discretion, such written legal opinions,
certifications (including an investment letter in the case of box (3) or (4),
and other information as the Trustee,
634606.8
8
<PAGE>
Registrar or the Corporation has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended.
If none of the foregoing boxes is checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any
person other than the Holder hereof unless and until the conditions
to any such transfer of registration set forth herein and in the
Indenture shall have been satisfied.
(Sign exactly as name appears on
the other side of this Security)
Signature
Guarantee:
-----------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:
------------ ------------------------------------
NOTICE: To be executed by an
executive officer
634606.8
9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Corporation pursuant to
Section 4.05 or 4.10 of the Indenture, check the Box: { }
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.05 or 4.10 of the Indenture, state the amount:
$-------------
Date: Your Signature:
------------------ --------------------------
(Sign exactly as your name appears
on the other side of this Note)
By:
--------------------------------
NOTICE: To be signed by an
executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar program.
634606.8
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
-------------------------------------------------------
(insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of the Corporation.
The agent may substitute another to act for him.
Date: Signature(s):
------------------
---------------------------
Sign exactly as your name
appears on the other side
of this Security
Signature Guarantee:
------------------
634606.8
<PAGE>
EXHIBIT B
[RESTRICTIVE LEGENDS IF APPLICABLE]
[OID LEGEND IF APPLICABLE]
CUSIP NO. ____
[FORM OF FACE OF SECURITY]
No.
$
AMPEX CORPORATION
12% Senior Note Due 2003, Series B
Ampex Corporation, a Delaware corporation, promises to pay to
_______________________________, or registered assigns, the principal sum of
_____________________ Dollars on March 15, 2003.
Interest Payment Dates: March 15 and September 15, commencing
September 1, 1998.
Record Dates: March 1 and September 1, commencing September 1, 1998.
Additional provisions of this Security are set forth on the following
pages of this Security.
Dated:
AMPEX CORPORATION,
By:
President
Assistant Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
[SEAL]
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee, certifies that this is
one of the Securities referred to
in the Indenture.
by
-----------------------------------
Authorized Signatory
634606.8
<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
12% Senior Note Due 2003, Series B
1. Interest
Ampex Corporation, a Delaware corporation ("Corporation"), promises to
pay interest on the principal amount of this Security at the rate per annum
shown above. The Corporation will pay interest in cash to Holders of record at
the close of business on the March 1st and September 1st immediately preceding
the interest payment date on March 15 and September 15 of each year, commencing
September 15, 1998. Interest on the Securities will accrue from the last
interest payment date on which interest was paid on the security surrendered in
exchange hereof, or if no interest has been paid on such security, from the date
interest begins to accrue on such security. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
2. Method of Payment
The Corporation will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the close
of business on the March 1 or September 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Corporation will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Corporation may pay principal
and interest by check payable in such money. It may mail an interest check to a
Holder's registered address. At its option, it may pay principal and interest by
wire transfer to an account designated in writing by the Holder.
3. Paying Agent and Registrar
Initially, IBJ Schroder Bank & Trust Company, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Corporation
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Corporation or any of its Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
634606.8
2
<PAGE>
4. Indenture
The Corporation issued the Securities under an Indenture dated as of
January 28, 1998 ("Indenture"), between the Corporation and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
The Securities are subject to all such terms, and Securityholders are referred
to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the Corporation
limited to $50,000,000 aggregate principal amount (subject to Section 2.10 of
the Indenture). The Indenture imposes certain limitations on the payment of
dividends and other distributions by the Corporation and certain of its
Subsidiaries, the sale or transfer of assets, the sale or transfer of shares of
stock of certain of its Subsidiaries, the incurrence of debt by the Corporation
and certain of its Subsidiaries and transactions with affiliates.
5. Optional Redemption
The Corporation may not redeem the Securities prior to March 15, 2000.
On or after March 15, 2000, the Corporation may redeem the Securities at any
time as a whole, or from time to time in part, at the following redemption
prices (expressed as percentages of principal amount) plus accrued interest to
the redemption date:
Optional
Redemption
Period Price
------ ----------
Through March 14, 2001 106%
March 15, 2001 through March 14, 2002 104%
March 15, 2002 through September 14,2002 102%
September 15, 2002 and thereafter 100%
In addition, at any time prior to March 15, 2000, the Company may, at
its option, redeem up to 35% of the aggregate principal amount of the Securities
originally issued with the net cash proceeds of one or more Equity Offerings (as
defined in the Indenture), at 112% of the aggregate principal amount of the
Securities being redeemed plus accrued and unpaid interest, if any, to the date
of redemption. Any such redemption with the proceeds for Equity Offering shall
be made not more than 90 days after the date of any such Equity Offering.
634606.8
3
<PAGE>
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at the Holder's registered address. If money sufficient to pay the redemption
price and accrued interest on all Securities to be redeemed on the redemption
date is deposited with the Paying Agent prior to the redemption date, on and
after such date interest ceases to accrue on such Securities or portions of
them. Securities in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1.000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or before an interest payment date. The
Indenture imposes certain restrictions on the transfer of the Securities in
violation of the Securities Act.
8. Persons Deemed Owners
The registered holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Corporation at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Corporation (unless abandoned property law designates another person) and
not to the Trustee for payment.
10. Satisfaction and Discharge of Indenture
On the terms and subject to certain conditions specified in the
Indenture, the Corporation will be discharged from the Indenture and the
Securities (other than certain
634606.8
4
<PAGE>
specified provisions) or will be discharged from certain covenants under the
Indenture and the Securities upon deposit with the Trustee of moneys or U.S.
Government Obligations sufficient to pay at maturity or upon redemption all
Securities not previously delivered to the Trustee for cancellation, including
principal and accrued interest and all other sums then payable by the
Corporation under the Indenture.
11. Amendment, Supplement, Waiver
Subject to certain exceptions, (i) the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in principal amount outstanding of the Securities, and (ii) any past
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions, without the consent of any
Securityholder, the Corporation and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities
or to make any change that does not adversely affect the rights of any
Securityholder.
12. Defaults and Remedies
Each of the following is an Event of Default: default for 30 days in
payment of any interest on the Securities; default in payment of any principal
of the Securities when the same becomes due and payable at stated maturity, upon
redemption, upon declaration or otherwise; failure by the Corporation for 30
days after notice to the Corporation by the Trustee or to the Corporation and
the Trustee by the Holders of at least 25% aggregate principal amount of the
Securities to comply with certain covenants and agreements in the Indenture
relating to the payment of dividends and other distributions by the Corporation
and Subsidiaries, the sale or transfer of assets, the incurrence of debt by the
Corporation and Subsidiaries, transactions with affiliates and certain mergers,
consolidations and transfers of assets; failure by the Corporation for 60 days
after notice to the Corporation by the Trustee or to the Corporation and the
Trustee by the Holders of at least 25% aggregate in principal amount of the
Securities to comply with certain other covenants and agreements in the
Indenture and the Securities; certain payment defaults with respect to other
indebtedness of the Corporation or certain of its Subsidiaries, or other
defaults resulting in the acceleration of such other indebtedness, where the
aggregate of such indebtedness exceeds $5,000,000; and certain events of
bankruptcy or insolvency. If an Event of
634606.8
5
<PAGE>
Default occurs and is continuing, the Holders of at least 25% in principal
amount of the Securities may declare the principal of and accrued interest on
all the Securities to be due and payable immediately. Securityholders may not
enforce the Indenture or the Securities except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Securities unless it receives
reasonable indemnity or security. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default or Event of Default (except a Default in
payment of principal or interest) if it determines that withholding notice is in
their interest.
13. Trustee Dealings with the Corporation
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Corporation or its affiliates and may otherwise deal with the
Corporation or its affiliates with the same rights it would have if it were not
Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Corporation and the Trustee shall not have any liability for any obligations of
the Corporation under the Securities or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
15. Authentication
This Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent on the other side of this
Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
634606.8
6
<PAGE>
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Corporation has caused CUSIP numbers to
be printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Security holders. No representation
is made as to the accuracy of such numbers either as printed on the Securities
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Corporation will furnish to any Securityholder upon written
request and without charge to such Holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to: Ampex
Corporation, 500 North Broadway, Redwood City, California 94063, Attention of
Secretary.
634606.8
7
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Corporation pursuant to
Section 4.05 or 4.10 of the Indenture, check the Box: { }
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.05 or 4.10 of the Indenture, state the amount:
$-------------
Date: Your Signature:
----------------- ------------------------
(Sign exactly as
your name appears on the
other side of this Note)
By:
----------------------------------
NOTICE: To be signed by an
executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar program.
634606.8
8
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
-------------------------------------------------------
(insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Security on the books of the Corporation.
The agent may substitute another to act for him.
Date: Signature(s):
-----------------
---------------------------
Sign exactly as your name
appears on the other side
of this Security
Signature Guarantee:
---------------
634606.8
9
<PAGE>
EXHIBIT C
Form of Letter To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
----------, ----
[ ]
New York, New York
Attention: Corporate Trust Department
Re: Amex Corporation (the "Company")
12% Senior Notes
due 2003 (the "Notes")
--------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $ aggregate principal
amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated January 23, 1998 relating to the Notes
and such other information as we deem necessary in order to make our
investment decision. We acknowledge that we have read and agreed to
the matters stated in the section entitled "Transfer Restrictions" of
the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the
Indenture dated as of January 28, 1998 relating to the Notes (the
"Indenture") and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes except in compliance
with, such restrictions and conditions and the Securities Act of 1933,
as amended (the "Securities Act").
3. We understand that the Notes have not been registered under
the Securities Act, and that the Notes may not be offered or sold
except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell any Notes within three
years after the original issuance of the Notes, we will do so only (A)
to the Company or any subsidiary thereof, (B) inside the United States
in accordance with Rule 144A under the Securities Act
634606.8
<PAGE>
to a "qualified institutional buyer" (as defined herein), (C) inside
the United States to an "institutional accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you a signed
letter substantially in the form of this letter, (D) outside the
United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if available), or (F)
pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any person purchasing any of
the Notes from us a notice advising such purchaser that resales of the
Notes are restricted as stated herein.
4. We understand that, on any proposed resale of any Notes, we
will be required to furnish to you and the Company such certification,
written legal opinions and other information as you and the Company
may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its
investment, as the case may be.
6. We are acquiring the Notes purchased by us for our own account
or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
634606.8
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You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
------------------------------
Authorized Signature
634606.8
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EXHIBIT 4.2
- --------------------------------------------------------------------------------
WARRANT AGREEMENT
BETWEEN
AMPEX CORPORATION
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
Dated as of January 28, 1998
- --------------------------------------------------------------------------------
672637.5
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TABLE OF CONTENTS
DEFINITIONS..................................................................1
ARTICLE I....................................................................2
Section 1.1 Appointment of Warrant Agent........................2
Section 1.2 Form of Warrant Certificates........................2
Section 1.3 Execution of Warrant Certificates...................2
Section 1.4 Issuance and Distribution of Warrant Certificates...3
Section 1.5 Restrictive Legends.................................3
ARTICLE II...................................................................5
Section 2.1 Exercise Price......................................5
Section 2.2 Registration of Warrant Shares and Exercisability
of Warrants.........................................5
Section 2.3 Procedure for Exercise of Warrants..................5
Section 2.4 Issuance of Warrant Shares..........................6
Section 2.5 Certificates for Unexercised Warrants...............6
Section 2.6 Reservation of Warrant Shares.......................6
Section 2.7 Disposition of Proceeds.............................6
ARTICLE III..................................................................7
Section 3.1 Adjustment of Exercise Price........................7
Section 3.2 No Adjustments to Exercise Price....................9
Section 3.3 Adjustment of Number of Shares......................9
Section 3.4 Reorganizations.....................................9
Section 3.5 Verification of Computations.......................10
Section 3.6 Exercise Price Less Than Par Value.................10
Section 3.7 Notice of Certain Actions..........................10
Section 3.8 Certificate of Adjustments.........................11
Section 3.9 Warrant Certificate Amendments.....................11
Section 3.10 Fractional Shares..................................11
ARTICLE IV..................................................................12
Section 4.1 Rights of Warrant Holders..........................12
Section 4.2 Lost, Stolen, Mutilated or Destroyed
Warrant Certificates...............................12
ARTICLE V...................................................................13
Section 5.1 Split Up, Combination, Exchange and Transfer of
Warrant Certificates...............................13
Section 5.2 Cancellation of Warrant Certificates...............13
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ARTICLE VI..................................................................14
Section 6.1 Payment of Taxes and Charges.......................14
Section 6.2 Resignation or Removal of Warrant Agent............14
Section 6.3 Notice of Appointment..............................15
Section 6.4 Merger of Warrant Agent............................15
Section 6.5 Company Responsibilities...........................15
Section 6.6 Certification for the Benefit of Warrant Agent.....15
Section 6.7 Liability of Warrant Agent.........................16
Section 6.8 Use of Attorneys, Agents and Employees.............16
Section 6.9 Indemnification....................................16
Section 6.10 Acceptance of Agency...............................17
Section 6.11 Changes to Agreement...............................17
Section 6.12 Assignment.........................................17
Section 6.13 Successor to Company...............................17
Section 6.14 Notices............................................17
Section 6.15 Defects in Notice..................................18
Section 6.16 Governing Law......................................18
Section 6.17 Standing...........................................19
Section 6.18 Headings...........................................19
Section 6.19 Counterparts.......................................19
Section 6.20 Conflict of Interest...............................19
Section 6.21 Availability of the Agreement......................19
Section 6.22 Entire Agreement...................................19
EXHIBIT A - FORM OF WARRANT CERTIFICATE...................................(21)
672637.5
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WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of January 28, 1998, between AMPEX CORPORATION,
a Delaware corporation (the "Company"), and AMERICAN STOCK TRANSFER& TRUST
COMPANY (the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company has sold, pursuant to a Confidential Offering
Memorandum, dated January 23, 1998, $30,000,000 aggregate principal amount of
its 12% Senior Notes due March 15, 2003 (the "Notes"), together with warrants to
purchase shares up to 1,020,000 of the Company's Class A Common Stock, par value
$0.01 per share, at an exercise price of $2.25 per share (the "Warrants"); and
WHEREAS, the Company desires the Warrant Agent, and the Warrant Agent
agrees, to enter into this Agreement, and to act on behalf of the Company in
connection with the issuance, transfer, exchange, replacement and surrender of
the Warrants; and
WHEREAS, the Company and the Warrant Agent desire to set forth in this
Warrant Agreement, among other things, the form and provisions of the Warrant
Certificates and the terms and conditions under which they may be issued,
transferred, exchanged, replaced and surrendered in connection with the exercise
of the Warrants;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
DEFINITIONS
"Business Day" means each day other than a Saturday, Sunday, or a day in
which banking institutions are not required to be opened in the State of New
York.
"Class A Common Stock" shall mean the Class A Common Stock of the Company,
$0.01 par value per share.
"Company Order" shall mean a written order from the Company executed by an
officer of the Company regarding the issuance and delivery of Warrant
Certificates.
"Exercise Deadline" shall mean not later than 5:00 p.m. on March 15, 2003.
"Exercise Price" shall have the meaning set forth in Section 2.1 hereof.
672637.5
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"Officers' Certificate" means a certificate signed by any two of the
Chairman of the Board, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Secretary, an Assistant Secretary or the Controller
of the Company.
"Registration Rights Agreement" shall mean that certain registration rights
agreement, of even date herewith, relating to the Warrants and the Warrant
Shares.
"Securities Act" shall mean the Securities Act of 1993, as amended from
time to time, or any successor statute, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
"Warrant Certificates" shall mean the Warrant Certificates issuable
hereunder.
"Warrant Shares" shall mean the shares of Class A Common Stock issuable
upon the exercise of any Warrant.
"Warrants" shall mean the Warrants issuable hereunder.
ARTICLE I
Distribution of Warrant Certificates
Section 1.1 Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act on behalf of the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment in accordance with the terms hereof.
Section 1.2 Form of Warrant Certificates. The Warrant Certificates shall be
issued in registered form only and shall be in the form of Exhibit A attached
hereto. In addition, the Warrant Certificates may have such letters, numbers or
other marks of identification or designation and such legends, summaries, or
endorsements stamped, printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as, in any particular case, may be required, in the opinion of
counsel for the Company, to comply with any law or with any rule or regulation
of any regulatory authority or agency, or to conform to customary usage,
provided, however, that no such change shall be made which affects the duties or
obligations of the Warrant Agent without the consent of the Warrant Agent.
Section 1.3 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by its Chairman or President or any
Vice President and attested to by its Secretary or Assistant Secretary, either
manually or by facsimile signature printed thereon. The Warrant Certificates
shall be manually countersigned and dated the date
672637.5
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of countersignature by the Warrant Agent and shall not be valid for any purpose
unless so countersigned and dated. In case any authorized officer of the Company
who shall have signed any of the Warrant Certificates shall cease to be such
officer of the Company either before or after delivery thereof by the Company to
the Warrant Agent, the signature of such person on such Warrant Certificates
shall be valid nevertheless and such Warrant Certificate may be countersigned by
the Warrant Agent, and issued and delivered to the person entitled to receive
the Warrant represented thereby with the same force and effect as though the
person who signed such Warrant Certificates had not ceased to be such officer of
the Company.
Section 1.4 Issuance and Distribution of Warrant Certificates. The Company
shall deliver to the Warrant Agent an adequate supply of Warrant Certificates
executed on behalf of the Company as described in Section 1.3 hereof. Upon
receipt of a written Company Order, the Warrant Agent shall within five (5)
business days complete and countersign Warrant Certificates and representing the
total number of Warrants to be issued and shall thereafter deliver such Warrant
Certificates in accordance with such Company Order.
Section 1.5 Restrictive Legends.
(a) The Warrant Certificates and the Warrant Shares issued upon exercise of
the Warrants (the "Securities") shall bear a legend substantially in the form
set forth below:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGIS TERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURI TIES ACT"), AND ACCORDINGLY
MAY NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH
IN THE FOLLOWING SEN TENCE. BY ITS ACCEPTANCE HEREOF, THE HOLDER (1) REPRESENTS
(A) THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(K) UNDER THE SECURITIES ACT AS IN
EFFECT WITH RESPECT TO SUCH TRANSFER, Re-SELL OR OTHERWISE TRANSFER THIS
SECURITY, EXCEPT (A) TO THE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE CORPORATION A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATE-
MENT UNDER THE SECURITIES ACT OR (G) IN ACCORDANCE WITH ANOTHER
672637.5
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EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON
AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION) AND IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
(b) The Warrant Certificates and the Warrant Shares issued upon the
exercise of the Warrants shall not be required to bear the legend set forth
above if such security shall be issued upon:
(1) the transfer or exchange of such a Security or Securities and
contemporaneously therewith the Company shall have delivered to the Warrant
Agent an opinion of counsel reasonably satisfactory to the Warrant Agent,
in substance reasonably satisfactory to the Warrant Agent, to the effect
that such Security to be issued upon such transfer or exchange may be so
issued without such legend; such an opinion shall be delivered by the
Company, at its expense, as soon as practicable after its receipt of a
written request therefor from the holder of any Security to be transferred
or exchanged, in the event that, at the time of such transfer or exchange,
(A) such security shall have been registered under the Securities Act, the
registration statement in connection therewith shall have been declared
effective and such security shall have been disposed of pursuant to such
effective registration statement; or (B) such security shall have been sold
in compliance with Rule 144 or Rule 144A (or any similar provision then in
force) under the Securities Act in such a manner that resale of such
security will not require registration under the Securities Act; or
(2) the transfer or exchange of a Security or Securities not
bearing such legend.
(c) The Warrant Shares shall also bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED PURSUANT TO
THE RESTATED CERTIFICATE OF INCORPORATION OF THE ISSUER TO THE EFFECT THAT
THE VOTING RIGHTS OF CERTAIN HOLDERS OF THE CORPORATION'S SECURITIES MAY BE
NULLIFIED IN THE EVENT OF AN INQUIRY OR DETERMINATION BY THE U.S.
DEPARTMENT OF DEFENSE REGARDING FOREIGN OWNERSHIP OF THE CORPORATION AND
ITS POSSIBLE EFFECTS ON NATIONAL SECURITY."
672637.5
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ARTICLE II
Warrant Exercise Price and
Exercise of Warrants
Section 2.1 Exercise Price. Subject to Section 2.4 hereof, each Warrant
Certificate shall, when signed by the Chairman or President or any Vice
President and attested to by the Secretary or Assistant Secretary of the Company
and countersigned by the Warrant Agent, entitle the registered holder thereof to
purchase from the Company one share of Class A Common Stock for each Warrant, at
a purchase price of $2.25 per share (the "Exercise Price") or such adjusted
number of shares at such adjusted purchase price as may be established from time
to time pursuant to the provisions of Article III hereof, payable in full in
accordance with Section 2.3 hereof, at the time of exercise of the Warrant.
Except as the context otherwise requires, the term "Exercise Price" as used in
this Agreement shall mean the purchase price of one Warrant Share pursuant to
the Warrant Certificates reflecting all appropriate adjustments made in
accordance with the provisions of Article III hereof.
Section 2.2 Registration of Warrant Shares and Exercisability of Warrants.
Pursuant to and in accordance with the Registration Rights Agreement the Company
shall use its best efforts to secure the effective registration of the Warrants
and the Warrant Shares under the Securities Act and to register or qualify such
Warrants and Warrant Shares under applicable state laws and to maintain such
registration or qualification in effect and to keep available for delivery a
prospectus that meets the requirements of Section 10 of the Securities Act for
the period specified in the Registration Rights Agreement. Promptly after a
registration statement under the Securities Act covering the Warrants and the
aforementioned Warrant Shares has become effective, or such other action as
contemplated hereby and as may be required has been taken, as the case may be,
the Company shall cause notice thereof together with a copy of the prospectus
covering the Warrants and the aforementioned Warrant Shares to be mailed to each
registered holder of a Warrant Certificate and to the Warrant Agent.
Section 2.3 Procedure for Exercise of Warrants. Warrants may be exercised
at any time, prior to the Exercise Deadline, by surrendering the Warrant
Certificates representing such Warrants to the Warrant Agent at the principal
office of its stock transfer department ("Principle Office"), with the form of
Election to Purchase duly completed and executed, with signatures guaranteed by
a member firm of a national securities exchange, a commercial bank (not a
savings bank or a savings and loan association) or trust company located in the
United States or a member of the National Association of Securities Dealers,
Inc. ("Signatures Guaranteed"), accompanied by payment in full, as set forth
below, to the Warrant Agent for the account of the Company of the Exercise Price
of such Warrant Certificate in effect at the time of such exercise, together
with such taxes as are specified in Section 6.1 hereof, as set forth below, for
each Warrant Share with respect to which such Warrants are being exercised. Such
Exercise Price and taxes shall be paid in full by cash, certified check,
cashier's check or money order, payable in United States currency to the order
of the Warrant Agent, or by any
672637.5
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combination of the foregoing. The date on which Warrants are exercised in
accordance with this Section 2.3 is sometimes referred to herein as the "Date of
Exercise" of such Warrants. Upon receiving notice that any Warrants are proposed
to be exercised, the Warrant Agent will provide a notice of exercise to the
Company (the "Exercise Notice"). Such Exercise Notice shall set forth the name
of the registered holder, the number of Warrants to be exercised, the number of
shares to be issued, the Date of Exercise, the method of payment and the Warrant
Certificate number.
Section 2.4 Issuance of Warrant Shares. As soon as practicable after the
Date of Exercise of any Warrants and within five (5) business days after
receiving a Notice of Exercise, the Company shall issue, or cause its transfer
agent to issue a certificate or certificates for the number of full Warrant
Shares to which such holder is entitled, registered in accordance with the
instructions set forth in the Election to Purchase. All Warrant Shares issued
upon the exercise of any Warrants shall be validly authorized and issued, fully
paid and non-assessable, and free from all taxes, liens and charges created by
the Company in respect of the issue thereof. Each person in whose name any such
certificate for Warrant Shares is issued shall for all purposes be deemed to
have become the holder of record of the Common Stock represented thereby on the
Date of Exercise of the Warrants resulting in the issuance of such shares,
irrespective of the date of issuance or delivery of such certificate for Warrant
Shares. The Warrant Agent shall not bear any responsibility with respect to the
issuance of Warrant Shares.
Section 2.5 Certificates for Unexercised Warrants. In the event that fewer
than all of the Warrants represented by a Warrant Certificate are exercised, the
Warrant Agent shall execute and mail, by first-class mail, within fifteen (15)
days of the Date of Exercise, to the registered holder of such Warrant
Certificate, or such other person as shall be designated in the Election to
Purchase, a new Warrant Certificate representing the number of Warrants not
exercised.
Section 2.6 Reservation of Warrant Shares. The Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants a number
of its authorized but unissued shares or treasury shares, or both, of Class A
Common Stock that will be sufficient to permit the exercise in full of all
outstanding Warrants.
Section 2.7 Disposition of Proceeds. The Warrant Agent shall account
promptly to the Company with respect to Warrants exercised and shall
concurrently deliver to the Company all funds (after payment of the Warrant
Agent's fees and expenses) received upon exercise of Warrants.
672637.5
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ARTICLE III
Adjustments, Notice Provisions and Restrictions
on Issuance of Additional Securities
Section 3.1 Adjustment of Exercise Price. Subject to the provisions of this
Article III, the Exercise Price in effect from time to time shall be subject to
adjustment, as follows:
(a) In case the Company shall (i) declare a dividend or make a distribution
on the outstanding shares of its Common Stock in shares of its Common Stock,
(ii) subdivide or reclassify the outstanding shares of its Common Stock into a
greater number of shares, or (iii) combine or reclassify the outstanding shares
of its Common Stock into a smaller number of shares, the Exercise Price in
effect immediately after the record date for such dividend or distribution or
the effective date of such subdivision, combination or reclassification shall be
adjusted so that it shall equal the price determined by multiplying the Exercise
Price in effect immediately prior thereto by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding immediately before
such dividend, distribution, subdivision, combination or reclassification, and
of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such dividend, distribution, subdivision,
combination or reclassification. Any shares of Common Stock of the Company
issuable in payment of a dividend shall be deemed to have been issued
immediately prior to the record date for such dividend for purposes of
calculating the number of outstanding shares of Common Stock of the Company
under Subsections 3.1(b) and 3.1(c) hereof. Such adjustment shall be made
successively whenever any event specified above shall occur.
(b) In case the Company shall fix a record date for the issuance of rights,
options, warrants or convertible or exchangeable securities to all holders of
its Common Stock entitling them (for a period expiring within forty-five (45)
days after such record date) to subscribe for or purchase shares of its Common
Stock at a price per share less than the Current Market Price (as such term is
defined in Subsection 3.1(d) hereof) on such record date the Exercise Price
shall be adjusted immediately thereafter so that it shall equal the price
determined by multiplying the Exercise Price in effect immediately prior thereto
by a fraction, of which the numerator shall be the number of shares of Common
Stock outstanding on such record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so offered would purchase at the Current Market Price per share, and of which
the denominator shall be the number of shares of Common Stock outstanding on
such record date plus the number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that any such rights,
options, warrants or convertible or exchangeable securities are not so issued or
expire unexercised, the Exercise Price then in effect shall be readjusted to the
Exercise Price which would then be in effect if such unissued or unexercised
rights, options, warrants or convertible or exchangeable securities had not been
issuable.
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(c) In case the Company shall fix a record date for the making of a
distribution to all holders of shares of its Common Stock (i) of shares of any
class other than its Common Stock or (ii) of evidences of its indebtedness or
(iii) of assets (excluding cash dividends or distributions (other than
extraordinary cash dividends or distributions), and dividends or distributions
referred to in Subsection 3.1(a) hereof) or (iv) of rights, options, warrants or
convertible or exchangeable securities (excluding those rights, options,
warrants or convertible or exchangeable securities referred to in Subsection
3.1(b) hereof), then in each such case the Exercise Price in effect immediately
thereafter shall be determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, of which the numerator shall be the
total number of shares of Common Stock outstanding on such record date
multiplied by the Current Market Price (as such term is defined in Subsection
3.1(d) hereof) per share on such record date, less the aggregate fair market
value as determined in good faith by the Board of Directors of the Company of
said shares or evidences of indebtedness or assets or rights, options, warrants
or convertible or exchangeable securities so distributed, and of which the
denominator shall be the total number of shares of Common Stock outstanding on
such record date multiplied by such Current Market Price per share. Such
adjustment shall be made successively whenever such a record date is fixed. In
the event that such distribution is not so made, the Exercise Price then in
effect shall be readjusted to the Exercise Price which would then be in effect
if such record date had not been fixed.
(d) For the purpose of any computation under Subsection 3.1 (b) hereof, the
"Current Market Price" per share at any date (the "Computation Date") shall be
as follows: (i) if the Class A Common Stock is listed on a national securities
exchange or quoted on a national quotation system, the Current Market Price
shall be deemed to be the average of the daily closing prices of the Class A
Common Stock for the twenty (20) consecutive Trading Days ending on the Trading
Day before such date; provided, however, that if there shall have occurred prior
to the Computation Date any event described in Subsection 3.1(a) or 3.1(b) which
shall have become effective with respect to market transactions at any time (the
"Market-Effect Date") on or after the beginning of such 20-day period, the
Closing Price for each Trading Day preceding the Market-Effect Date shall be
adjusted, for purposes of calculating such average, by multiplying such Closing
Price by a fraction the numerator of which is the Exercise Price as in effect
immediately prior to the Computation Date and the denominator of which is the
Exercise Price as in effect immediately prior to the Market-Effect Date, it
being understood that the purpose of this proviso is to ensure that the effect
of such event on the market price of the Class A Common Stock shall, as nearly
as possible, be eliminated in order that the distortion in the calculation of
the Current Market Price may be minimized; (ii) if there is no public market for
the Class A Common Stock, the highest price at which shares of Class A Common
Stock are offered for sale in a public offering registered pursuant to the
Securities Act or in an arms-length private offering, if any such offering is
pending (unless such offer is revoked prior to such sale) on the date of
determination of Current Market Price; or (iii) if there is no public market for
Class A Common Stock and no such offering is pending, the fair market value per
share of Class A Common Stock as
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determined in good faith by the Company's Board of Directors; provided, however,
that if the Class A Common Stock shall no longer be traded on the National
Market System of the National Association of Securities Dealers, Inc. or any
other national securities exchange, the term "Class A Common Stock" shall mean
the class or series of Common Stock which is so traded. As used herein the term
"Trading Days" with respect to Class A Common Stock means (i) if the Class A
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 Class A Common Stock is listed or
admitted for trading on any national securities exchange, days on which such
national securities exchange is open for business.
Section 3.2 No Adjustments to Exercise Price. No adjustment in the Exercise
Price in accordance with the provisions of Subsection 3.1 (a), (b) or (c))
hereof need be made unless such adjustment would amount to a change of at least
1% in such Exercise Price of the Warrant Certificates; provided, however, that
the amount by which any adjustment is not made by reason of the provisions of
this Section 3.2 shall be carried forward and taken into account at the time of
any subsequent adjustment in the Exercise Price.
Section 3.3 Adjustment of Number of Shares. Upon each adjustment of the
Exercise Price pursuant to Subsection 3.1(a), (b) or (c) hereof, each Warrant
shall thereupon evidence the right to purchase that number of Warrant Shares
(calculated to the nearest hundredth of a share) obtained by multiplying the
number of Warrant Shares purchasable immediately prior to such adjustment upon
exercise of the Warrant by the Exercise Price in effect immediately prior to
such adjustment and dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment. In the event that the Exercise Price
may not be adjusted due to the provisions of Section 3.6 hereof, the number of
Warrant Shares purchasable upon the exercise of each Warrant shall be adjusted
hereunder as if the Exercise Price had been so adjusted.
Section 3.4 Reorganizations. In case of any capital reorganization, other
than in the cases referred to in Section 3.1 hereof, or the consolidation or
merger of the Company with or into another corporation (other than a merger or
consolidation in which the Company is the continuing corporation and which does
not result in any reclassification of the outstanding shares of Common Stock or
the conversion of such outstanding shares of Common Stock into shares of other
stock or other securities or property), or the sale or conveyance of the
property of the Company as an entirety or substantially as an entirety
(collectively such actions being hereinafter referred to as "Reorganizations"),
there shall thereafter be deliverable upon exercise of any Warrant (in lieu of
the number of Warrant Shares theretofore deliverable) the number of shares of
stock or other securities or property to which a holder of the number of Warrant
Shares which would otherwise have been deliverable upon the exercise of such
Warrant would have been entitled upon such Reorganization if such Warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization,
672637.5
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appropriate adjustment, as determined in good faith by the Board of Directors of
the Company, shall be made in the application of the provisions herein set forth
with respect to the rights and interests of Warrant holders so that the
provisions set forth herein shall thereafter be applicable, as nearly as
possible, in relation to any shares or other property thereafter deliverable
upon exercise of Warrants. Any such adjustment shall be made by and set forth in
a supplemental agreement prepared by the Company or any successor thereto,
between the Company, or any successor thereto, and the Warrant Agent and shall
for all purposes hereof conclusively be deemed to be an appropriate adjustment.
The Company shall not effect any such Reorganization, unless upon or prior to
the consummation thereof the successor corporation, or if the Company shall be
the surviving corporation in any such Reorganization and is not the issuer of
the shares of stock or other securities or property to be delivered to holders
of shares of the Common Stock outstanding at the effective time thereof, then
such issuer, shall assume by written instrument the obligation to deliver to the
registered holder of any Warrant Certificate such shares of stock, securities,
cash or other property as such holder shall be entitled to purchase in
accordance with the foregoing provisions.
Section 3.5 Verification of Computations. The Company shall select a firm
of independent public accountants, which selection may be changed from time to
time, to verify each computation and/or adjustment made in accordance with this
Article III. The certificate, report or other written statement of any such firm
shall be conclusive evidence of the correctness of any computation made under
this Article III. Promptly upon its receipt of such certificate, report or
statement from such firm of independent public accountants, the Company shall
deliver a copy thereof to the Warrant Agent.
Section 3.6 Exercise Price Less Than Par Value. The Exercise Price shall
not be adjusted below the par value per share of the Common Stock for the
purpose of making any adjustment as may be required pursuant to this Article
III.
Section 3.7 Notice of Certain Actions. In the event the Company shall:
(a) declare any dividend payable in stock to the holders of its Common
Stock or make any other distribution in property other than cash to the holders
of its Common Stock; or
(b) offer to the holders of its Common Stock rights to subscribe for or
purchase any shares of any class of stock or any other rights or options; or
(c) effect any reclassification of its Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock) or any capital reorganization or any consolidation or
merger (other than a merger in which no distribution of securities or other
property is made to holders of Common Stock), or any sale, transfer or other
disposition of its property, assets and business substantially as an entirety,
or the liquidation, dissolution or winding up of the Company; then, in each such
case, the Company shall cause notice of such proposed action to be mailed to the
Warrant Agent at least
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thirty (30) days prior to such action. Such notice shall specify the date on
which the books of the Company shall close, or a record be taken, for
determining holders of Common Stock entitled to receive such stock dividend or
other distribution or such rights or options, or the date on which such
reclassification, reorganization, consolidation, merger, sale, transfer, other
disposition, liquidation, dissolution, winding up or exchange shall take place
or commence, as the case may be, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to receive securities or
other property deliverable upon such action, if any such date has been fixed.
The Company shall cause copies of such notice to be mailed to each registered
holder of a Warrant Certificate. Such notice shall be mailed in the case of any
action covered by paragraph (a) or (b) of this Section 3.7, at least ten (10)
days prior to the record date for determining holders of the Common Stock for
purposes of receiving such payment or offer, and in the case of any action
covered by paragraph (c) of this Section 3.7, at least ten (10) days prior to
the earlier of the date upon which such action is to take place or any record
date to determine holders of Common Stock entitled to receive such securities or
other property.
Section 3.8 Certificate of Adjustments. Whenever any adjustment is to be
made pursuant to this Article III, the Company shall prepare an Officers'
Certificate setting forth such adjustment to be mailed to the Warrant Agent, to
each other transfer agent for the Common Stock and to each registered holder of
a Warrant Certificate at least fifteen (15) days prior thereto, such notice to
include in reasonable detail (i) the events precipitating the adjustment, (ii)
the computation of any adjustments, and (iii) the Exercise Price and the number
of Warrant Shares or the securities or other property purchasable upon exercise
of each Warrant after giving effect to such adjustment. Such Officers'
Certificate shall be accompanied by the accountant's verification required by
Section 3.5 hereof. The Warrant Agent shall be fully protected in relying on any
such Officers' Certificate and on any adjustment therein contained, and shall
not be deemed to have knowledge of any such adjustment unless and until it shall
have received such an Officers' Certificate.
Section 3.9 Warrant Certificate Amendments. Irrespective of any adjustments
pursuant to this Article III, Warrant Certificates theretofore or thereafter
issued need not be amended or replaced, but certificates thereafter issued shall
bear an appropriate legend or other notice of any adjustments; provided the
Company may, at its option, issue new Warrant Certificates evidencing Warrants
in such form as may be approved by its Board of Directors to reflect any
adjustment in the Exercise Price and number of Warrant Shares purchasable under
the Warrant Certificates and deliver the same to the Warrant Agent in
substitution for existing Warrant Certificates.
Section 3.10 Fractional Shares. The Company shall not be required upon the
exercise of any Warrant to issue fractional Warrant Shares which may result from
adjustments in accordance with this Article III to the Exercise Price or number
of Warrant Shares purchasable under each Warrant. If more than one Warrant is
exercised at one time by the same registered holder, the number of full Warrant
Shares which shall be deliverable shall be computed based
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on the number of shares deliverable in exchange for the aggregate number of
Warrants exercised. With respect to any final fraction of a Warrant Share called
for upon the exercise of any Warrant or Warrants, the Company shall pay a cash
adjustment to the registered holders of the Warrants in respect of such final
fraction in an amount equal to the same fraction of the Closing Price of a
Warrant Share, as determined by the Company on the basis of the Closing Price
per share of Class A Common Stock on the business day next preceding the date of
such exercise. The registered holder of each Warrant Certificate, by his
acceptance of the Warrant Certificate, shall expressly waive any right to
receive any fractional Warrant Share upon exercise of the Warrants. All
calculations under this Section 3.10 shall be made to the nearest hundredth of a
share.
ARTICLE IV
Other Provisions Relating to Rights of
Registered Holders of Warrant Certificates
Section 4.1 Rights of Warrant Holders. No Warrant Certificate shall entitle
the registered holder thereof to any of the rights of a stockholder of the
Company, including, without limitation, the right to vote, to receive dividends
and other distributions, to receive any notice of, or to attend, meetings of
stockholders or any other proceedings of the Company.
Section 4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If
any Warrant Certificate shall be mutilated, lost, stolen or destroyed, the
Company in its discretion may direct the Warrant Agent to execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Warrant
Certificate, or in lieu of or in substitution for a lost, stolen or destroyed
Warrant Certificate, a substitute Warrant Certificate, but only upon receipt of
evidence of such loss, theft or destruction of such Warrant Certificate, and of
the ownership thereof, and indemnity, if requested by either the Company or the
Warrant Agent, all satisfactory to the Company and the Warrant Agent. Applicants
for such substitute Warrant Certificates shall also comply with such other
reasonable regulations and pay such other reasonable charges incidental thereto
as the Company or Warrant Agent may prescribe. Any such new Warrant Certificate
shall constitute an original contractual obligation of the Company, whether or
not the allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall
be at any time enforceable by anyone.
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ARTICLE V
Split Up, Combination, Exchange, Transfer
and Cancellation of Warrant Certificates
Section 5.1 Split Up, Combination, Exchange and Transfer of Warrant
Certificates. Warrant Certificates, subject to the provisions of Section 5.2
hereof, may be split up, combined or exchanged for other Warrant Certificates of
the same type representing a like aggregate number of Warrants or may be
transferred in whole or in part. Any holder desiring to split up, combine or
exchange a Warrant Certificate or Warrant Certificates shall make such request
in writing delivered to the Warrant Agent at its Principal Office and shall
surrender the Warrant Certificate or Warrant Certificates so to be split up,
combined or exchanged at said office. Subject to any applicable laws, rules or
regulations restricting transferability, any restriction on transferability that
may appear on a Warrant Certificate in accordance with the terms hereof, or any
"stop-transfer" instructions the Company may give to the Warrant Agent to
implement any such restrictions (which instructions the Company is expressly
authorized to give), transfers of outstanding Warrant Certificates may be
effected by the Warrant Agent from time to time upon the books of the Company to
be maintained by the Warrant Agent for that purpose, upon a surrender of the
Warrant Certificate to the Warrant Agent at its Principal Office, with the form
of Assignment thereon duly executed and with Signatures Guaranteed. Upon any
such surrender for split up, combination, exchange or transfer, the Warrant
Agent shall execute and deliver to the person entitled thereto a Warrant
Certificate or Certificates, as the case may be, as so requested. The Warrant
Agent may require the holder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split up,
combination, exchange or transfer of Warrant Certificates prior to the issuance
of any new Warrant Certificate.
Section 5.2 Cancellation of Warrant Certificates. Any Warrant Certificate
surrendered upon the exercise of Warrants or for split up, combination, exchange
or transfer, or purchased or otherwise acquired by the Company, shall be
canceled and shall not be reissued by the Company; and, except as provided in
Section 2.5 hereof in case of the exercise of less than all of the Warrants
evidenced by a Warrant Certificate or in Section 5.1 hereof in case of a split
up, combination, exchange or transfer, no Warrant Certificate shall be issued
hereunder in lieu of such canceled Warrant Certificate. Any Warrant Certificate
so canceled shall be destroyed by the Warrant Agent unless otherwise directed by
the Company.
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ARTICLE VI
Provisions Concerning the Warrant Agent and Other Matters
Section 6.1 Payment of Taxes and Charges. The Company will from time to
time promptly pay to the Warrant Agent, or make provisions satisfactory to the
Warrant Agent for the payment of, all taxes and charges that may be imposed by
the United States or any state upon the Company or the Warrant Agent in
connection with the issuance or delivery of Warrant Shares upon the exercise of
any Warrants, provided, however, any additional transfer taxes in connection
with the issuance of Warrant Certificates or Certificates for Warrant Shares in
any name other than that of the registered holder of the Warrant Certificate
surrendered shall be paid by such registered holder; and, in such case, the
Company shall not issue or deliver any Warrant Certificate or Certificates for
Warrant Shares and the Warrant Agent shall not be required to deliver any
Warrant Certificates or Warrant Shares until such taxes shall have been paid or
it has been established to the Company's and the Warrant Agent's satisfaction
that no tax is due. The Warrant Agent shall have no duty to determine if any tax
is due.
Section 6.2 Resignation or Removal of Warrant Agent. The Warrant Agent may
resign its duties and be discharged from all further duties and liabilities
hereunder after giving at least thirty (30) days notice in writing to the
Company, except that such shorter notice may be given as the Company shall, in
writing, accept as sufficient; provided, however, that if the Warrant Agent
believes a conflict of interest may arise, the Warrant Agent may resign
immediately upon notice to the Company, and such resignation shall be
immediately effective if such action is taken following the occurrence of an
Event of Default under the Indenture. Upon comparable notice to the Warrant
Agent, the Company may remove the Warrant Agent. If the office of Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company
shall appoint in writing a new Warrant Agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after it has been notified
in writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the registered holder of any Warrant Certificate, then the
registered holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent. Any new Warrant Agent,
whether appointed by the Company or by such a court, shall be a bank which has a
combined capital and surplus of at least $10,000,000 and which is a member of
the Federal Reserve System. Any new Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to the Company, an instrument accepting such
appointment under substantially the same terms and conditions as are contained
herein. If for any reason it becomes necessary or expedient to have the former
Warrant Agent execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and shall be legally
and validly executed and delivered by the former Warrant Agent.
Section 6.3 Notice of Appointment. Not later than five (5) Business Days
prior to the effective date of the appointment of a new Warrant Agent, the
Company shall cause notice
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thereof to be mailed to the former Warrant Agent and the transfer agent for the
Common Stock, and shall forthwith cause a copy of such notice to be mailed to
each registered holder of a Warrant Certificate. Failure to mail such notice, or
any defect contained therein, shall not affect the legality or validity of the
appointment of the successor Warrant Agent.
Section 6.4 Merger of Warrant Agent. Any company into which the Warrant
Agent may be merged or with which it may be consolidated or any company
resulting from any merger or consolidation to which the Warrant Agent shall be a
party, shall be the successor Warrant Agent under this Agreement without further
act, provided that such company would be eligible for appointment as a successor
Warrant Agent under the provisions of Section 6.2 hereof. Any such successor
Warrant Agent may adopt the prior countersignature of any predecessor Warrant
Agent and distribute Warrant Certificates countersigned but not distributed by
such predecessor Warrant Agent, or may countersign the Warrant Certificate in
its own name.
Section 6.5 Company Responsibilities. The Company agrees that it shall (i)
pay the Warrant Agent reasonable remuneration for its services as Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenses,
advances, and expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder (including fees and expenses of its counsel);
(ii) provide the Warrant Agent, upon request, with sufficient funds to pay any
cash or taxes due pursuant to this Agreement; and (iii) perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all further and other acts, instruments and assurances as may
reasonably be required by the Warrant Agent for the carrying out or performing
by the Warrant Agent of the provisions of this Agreement. In no case shall the
Warrant Agent be required to advance its own funds for any purpose under this
Agreement.
Section 6.6 Certification for the Benefit of Warrant Agent. Whenever in the
performance of its duties under this Agreement the Warrant Agent shall deem it
necessary or desirable that any matter be proved or established or that any
instructions with respect to the performance of its duties hereunder be given by
the Company prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established, or such instructions may be
given, by a certificate or instrument signed by the Chairman, the President, a
Vice President, the Secretary, Assistant Secretary or the Treasurer of the
Company and delivered to the Warrant Agent. Such certificate or instrument may
be conclusively relied upon by the Warrant Agent for any action or refusal to
act taken or suffered in good faith by it under the provisions of this
Agreement, without further investigation; but in its discretion the Warrant
Agent may in lieu thereof accept other evidence of such matter or may require
such further or additional evidence as it may deem reasonable including, without
limitation, an opinion of counsel to the Company. In addition, the Warrant Agent
may consult with counsel of its choice, and any opinion of such counsel shall be
full and complete authorization to the Warrant
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Agent in respect of any action taken or omitted to be taken in good faith, in
reliance on such opinion.
Section 6.7 Liability of Warrant Agent. The Warrant Agent shall be liable
hereunder solely for direct damages resulting from its own gross negligence or
willful misconduct, provided, further, that the Warrant Agent shall not be
liable for any special or consequential damages in connection with any liability
hereunder. The Warrant Agent shall act hereunder solely as an agent for the
Company and its duties shall be determined solely by the provisions hereof,
provided, however, that nothing contained herein shall preclude the Warrant
Agent from serving as the Transfer Agent to the Company's Common Stock. The
Warrant Agent shall not be liable for or by reason of any of the statements of
fact or recitals contained in this Agreement or in the Warrant Certificates
(except its countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only. The Warrant Agent will not incur any liability or responsibility
to the Company or to any holder of any Warrant Certificate for any action taken,
or any failure to take action, in reliance on any notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument reasonably
believed by the Warrant Agent to be genuine and to have been signed, sent or
presented by the proper party or parties. The Warrant Agent shall not be under
any responsibility in respect of the validity of this Agreement or the execution
and delivery thereof by the Company or in respect of the validity or execution
of any Warrant Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Warrant Certificate; nor shall it be
responsible for the making of any adjustment required under the provisions of
Article III hereof or responsible for the manner, method or amount of any such
adjustment or the facts that would require any such adjustment; nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares or other securities to be
issued pursuant to this Agreement or any Warrant Certificate or as to whether
any Warrant Shares or other securities will when issued be validly authorized
and issued and fully paid and non-assessable.
Section 6.8 Use of Attorneys, Agents and Employees. The Warrant Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys, agents or
employees.
Section 6.9 Indemnification. The Company hereby irrevocably indemnifies the
Warrant Agent and saves it harmless against any and all losses, expenses or
liabilities, including judgments, costs and counsel fees and expenses arising
out of or in connection with its agency under this Agreement, except as a direct
result of the gross negligence or willful misconduct of the Warrant Agent.
Section 6.10 Acceptance of Agency. The Warrant Agent hereby accepts the
agency established by this Agreement and agrees to perform the same upon the
terms and conditions herein set forth.
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Section 6.11 Changes to Agreement. The Company, when authorized by its
Board of Directors, and the Warrant Agent, together, with the written consent of
the registered holder or holders of at least a majority of the outstanding
Warrants may amend or supplement this Agreement. The Warrant Agent may, without
the consent or concurrence of any registered holder of a Warrant Certificate, by
supplemental agreement or otherwise, join with the Company in making any changes
or corrections in this Agreement that the Company shall have been advised by
counsel (i) are required to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest error herein
contained, (ii) add to the covenants and agreements of the Company or the
Warrant Agent in this Agreement such further covenants and agreements thereafter
to be observed, or (iii) result in the surrender of any right or power reserved
to or conferred upon the Company or the Warrant Agent in this Agreement, but
which changes or corrections do not or will not adversely affect, alter or
change the rights, privileges or immunities of the registered holders of Warrant
Certificates. The Warrant Agent may conclusively rely on a certificate of the
Company regarding any such changes.
Section 6.12 Assignment. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns.
Section 6.13 Successor to Company. The Company will not merge or
consolidate with or into any other corporation or sell or otherwise transfer its
property, assets and business substantially as an entirety to a successor
corporation, unless the corporation resulting from such merger, consolidation,
sale or transfer (if not the Company) shall expressly assume, by supplemental
agreement satisfactory in form and substance to the Warrant Agent and delivered
to the Warrant Agent, the due and punctual performance and observance of each
and every covenant and condition of this Agreement to be performed and observed
by the Company.
Section 6.14 Notices. Any notice or demand required by this Agreement to be
given or made by the Warrant Agent or by the registered holder of any Warrant
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:
Ampex Corporation
590 Madison Avenue
New York, NY 10022
Attn: Chief Financial Officer
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With a copy to:
Battle Fowler LLP
Park Avenue Tower
75 East 55th Street
New York, NY 10022
Attn: David D. Griffin, Esq.
Any notice or demand required by this Agreement to be given or made by the
registered holder of any Warrant Certificate or by the Company to or on the
Warrant Agent shall be sufficiently given or made if sent by first-class or
registered mail, postage prepaid, addressed (until another address is filed in
writing with the Company by the Warrant Agent), as follows:
American Stock Transfer & Trust Company
40 Wall Street
46th Floor
New York, New York 10005
Attn: Mr. Wilbert Myles
Any notice or demand required by this Agreement to be given or made by the
Company or the Warrant Agent to or on the registered holder of any Warrant
Certificate shall be sufficiently given or made, whether or not such holder
receives the notice, three (3) days after mailing if sent by first-class or
registered mail, postage prepaid, addressed to such registered holder at his
last address as shown on the books of the Company maintained by the Warrant
Agent. Otherwise, such notice or demand shall be deemed given when received by
the party entitled thereto.
Section 6.15 Defects in Notice. Failure to file any certificate or notice
or to mail any notice, or any defect in any certificate or notice pursuant to
this Agreement shall not affect in any way the rights of any registered holder
of a Warrant Certificate or the legality or validity of any adjustment made
pursuant to Article III hereof, or any transaction giving rise to any such
adjustment, or the legality or validity of any action taken or to be taken by
the Company.
Section 6.16 Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be governed by the laws of the State of New York without
regard to principles of conflicts of laws thereof.
Section 6.17 Standing. Nothing in this Agreement expressed and nothing that
may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
Company, the Warrant Agent, and the registered holders of the Warrant
Certificates any right, remedy or claim under or by reason of this Agreement or
of any covenant, condition, stipulation, promise or agreement contained herein;
and all covenants, conditions, stipulations, promises and agreements contained
in this
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Agreement shall be for the sole and exclusive benefit of the Company and the
Warrant Agent and their successors, and the registered holders of the Warrant
Certificates.
Section 6.18 Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 6.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
Section 6.20 Conflict of Interest. The Warrant Agent and any stockholder,
director, officer or employee of the Warrant Agent may buy, sell or deal in any
of the Warrant Certificates or other securities of the Company or have a
pecuniary interest in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though the Warrant Agent were not Warrant Agent under this Agreement,
including, without limitation, acting as Trustee, Registrar or Paying Agent
under the Indenture. Nothing herein shall preclude the Warrant Agent from acting
in any other capacity for the Company, including, without limitation, as
Transfer Agent to the Common Stock.
Section 6.21 Availability of the Agreement. The Company shall keep copies
of this Agreement available for inspection by holders of Warrants during normal
business hours. Copies of this Agreement may be obtained upon written request
addressed to the Company at the address set forth in Section 6.14 hereof.
Section 6.22 Entire Agreement. This Agreement, including the Exhibits
referred to herein and the other writings specifically identified herein or
contemplated hereby, is complete, reflects the entire agreement of the parties
with respect to its subject matter, and supersedes all previous written or oral
negotiations, commitments and writings.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto under their respective corporate seals as of the day and year first above
written.
AMPEX CORPORATION
By: /s/ CRAIG L. MCKIBBEN
------------------------------------
Name: Craig L. McKibben
Title: Vice President
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Warrant Agent
By: /s/ HERBERT J. LEMMER
------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
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EXHIBIT A
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY MAY
NOT BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACCEPTANCE HEREOF, THE HOLDER (1) REPRESENTS (A)
THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED
IN RULE 501(a)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT, WITHIN THE
TIME PERIOD REFERRED TO IN RULE 144(K) UNDER THE SECURITIES ACT AS IN EFFECT
WITH RESPECT TO SUCH TRANSFER, RE-SELL OR OTHERWISE TRANSFER THIS SECURITY,
EXCEPT (A) TO THE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
TO THE CORPORATION A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (G) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE CORPORATION) AND IN EACH CASE, IN ACCORDANCE WITH
APPLICABLE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
No.
Certificate for Warrants
NOT EXERCISABLE AFTER 5:00 P.M.,
NEW YORK CITY TIME, ON MARCH 15, 2003
CUSIP NO. 032092 11 6
AMPEX CORPORATION
CLASS A COMMON STOCK PURCHASE WARRANT CERTIFICATE
THIS CERTIFIES that ___________ or its registered assigns is the registered
holder (the "Registered Holder") of __________( ) Warrants, each of which
represents the right to purchase one fully paid and non-assessable share of
Class A Common Stock, par value $0.01 per share (the "Common Stock"), of Ampex
Corporation, a Delaware corporation (the "Company"), at any time, but not after
the Expiration Date hereinafter referred to (the "Exercise Period"), at the
initial exercise price (the "Exercise Price") equal to $2.25 per share, by
surrendering this Warrant Certificate, with the Election to Purchase on the
reverse hereof duly executed with signatures guaranteed by a member firm of a
national securities exchange, a commercial bank (not a savings bank or a savings
and loan association) or a trust company located in the United States, or a
member of the National Association of Securities Dealers, Inc. ("Signatures
Guaranteed"), at the office maintained for that purpose (the "Principal Office")
by American Stock Transfer & Trust Company or its successor as warrant agent
(any such warrant agent being herein called the "Warrant Agent") and by paying
in full the Exercise Price, plus transfer taxes, if any. Payment of the Exercise
Price may be made at the option of the holder hereof by cash, certified check,
cashier's check or money order payable to the order of the Warrant Agent or by
any combination thereof, and upon compliance with and subject to the conditions
set forth herein and in the Warrant Agreement hereinafter referred to.
No Warrant may be exercised after 5:00 P.M., New York City time, on March
15, 2003 (the "Expiration Date"). All Warrants evidenced hereby shall thereafter
become void, subject to the terms of the Warrant Agreement hereinafter referred
to.
Prior to the Expiration Date, subject to any applicable laws, rules or
regulations restricting transferability and to any restriction on
transferability that may appear on this Warrant Certificate or in the agreement
pursuant to which this Warrant was issued and in accordance with the terms of
the Warrant Agreement hereinafter referred to, the Registered Holder shall be
entitled to transfer this Warrant Certificate, in whole or in part, upon
surrender of this Warrant Certificate at the Principal Office of the Warrant
Agent with the Assignment on the reverse hereof with Signatures Guaranteed. Upon
any such transfer, a new Warrant Certificate or Warrant Certificates
representing the same aggregate number of Warrants will be issued in accordance
with instructions in the form of assignment.
Upon the exercise of less than all of the Warrants evidenced by this
Warrant Certificate, there shall be issued to the Registered Holder a new
Warrant Certificate in respect of the Warrants not exercised and delivered as
set forth in the Election to Purchase.
Prior to the Expiration Date, the Registered Holder shall be entitled to
exchange this Warrant Certificate, with or without other Warrant Certificates,
for another Warrant Certificate or Warrant Certificates for the same aggregate
number of Warrants, upon surrender of this Warrant Certificate at the Principal
Office of the Warrant Agent as set forth in the Warrant Agreement. Upon certain
events provided for in the Warrant Agreement hereinafter referred to, the
Exercise Price and the number of shares of Common Stock issuable upon the
exercise of each Warrant are required to be adjusted. No fractional shares will
be issued upon the exercise of Warrants. As to any final fraction of a share
which the Registered Holder of one or more Warrant Certificates, the rights
under which are exercised in the same transaction, would otherwise be entitled
to purchase upon such exercise, the Company shall pay the cash value thereof
determined as provided in the Warrant Agreement hereinafter referred to.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement dated as of January 28, 1998 (the "Warrant Agreement"), between the
Company and the Warrant Agent and is subject to the terms and provisions
contained in said Warrant Agreement, to all of which terms and provisions the
Registered Holder consents by acceptance hereof. All capitalized terms not
defined herein shall have the meaning set forth in the Warrant Agreement.
This Warrant Certificate shall not entitle the Registered Holder to any of
the rights of a stockholder of the Company, including, without limitation, the
right to vote, to receive dividends and other distributions, or to attend or
receive any notice of meetings of stockholders or any other proceedings of the
Company.
This Warrant Certificate shall not be valid for any purpose until it shall
have been countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its facsimile Corporate Seal.
AMPEX CORPORATION
By:
--------------------------------------
Name:
Seal Title:
Attest:
- ------------------------------
Assistant Secretary AMERICAN STOCK TRANSFER
& TRUST COMPANY, as Warrant Agent
Countersigned:
By:
--------------------------------------
Dated: Authorized Signature
672637.5
-21-
<PAGE>
Form of Election To Purchase
The undersigned hereby irrevocably elects to exercise ____ of the Warrants
represented by this Warrant Certificate and to purchase the shares of Common
Stock issuable upon the exercise of said Warrants, and requests that
Certificates for such shares be issued and delivered as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME)
- --------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
- --------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:---------------------------------------------------------------------
(NAME)
at------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of Warrants hereby exercised is less than all the Warrants
represented by this Warrant Certificate, the undersigned requests that a new
Warrant Certificate representing the number of full Warrants not exercised be
issued and delivered as set forth above.
In full payment of the exercise price with respect to the Warrants
exercised and transfer taxes, if any, the undersigned hereby tenders payment of
$_______ by cash, certified check, cashiers check or money order payable to
the order of the Warrant Agent.
Date:
--------------, ---- ----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
Signature Guaranteed:
Assignment
FOR VALUE RECEIVED, the undersigned hereby irrevocably sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned
represented by the within Warrant Certificate, with respect to the number of
Warrants set forth below:
Name of Assignee Address No. of Warrants
- ---------------- ------- ---------------
and does hereby irrevocably constitute and appoint_______________________,
Attorney, to make such transfer on the books of Ampex Corporation maintained for
that purpose, with full power of substitution in the premises.
Date:
--------------, ---- ----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
Signature Guaranteed:
74007.c1
672637.5
-22-
<PAGE>
EXHIBIT 4.3
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
January 28, 1998
First Albany Corporation
One Penn Plaza
New York, New York 10119
Dear Sirs:
Ampex Corporation, an Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Initial Purchaser"), upon the terms set forth in a
purchase agreement dated January 26, 1998 (the "Purchase Agreement"),
$30,000,000 aggregate principal amount of its 12% Senior Notes due 2003 (the
"Securities") which Securities shall be issued pursuant to an Indenture dated as
of January 28, 1998 (the "Indenture") between the Company and IBJ Schroder Bank
& Trust Company, as trustee (the "Trustee"). Unless otherwise indicated,
capitalized terms used but not specifically defined herein have the respective
meanings ascribed thereto in the Purchase Agreement. As an inducement to the
Initial Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to your obligations thereunder, the Company agrees with you, for the
benefit of the holders of the Securities (including the Initial Purchaser) (the
"Holders"), as follows:
1. Registered Exchange Offer. The Company shall prepare and, not later
than 60 days following the date on which the original Securities were sold to
the Initial Purchaser pursuant to the Purchase Agreement (the "Issue Date"),
shall file with the Securities and Exchange Commission (the "Commission") a
registration statement (the "Exchange Offer Registration Statement") on an
appropriate form under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the
Holders to issue and deliver to such Holders, in exchange for the Securities, a
like aggregate principal amount of debt securities of the Company (the "Exchange
Securities") identical in all material respects to the Securities, except for
the transfer restrictions, registration rights and liquidated damages relating
to the Securities, shall use its reasonable efforts to cause the Exchange Offer
Registration Statement to become effective under the Securities Act no later
than 150 days after the Issue Date and to be consummated no later than 180 days
after the Issue Date, and shall keep the Exchange Offer Registration Statement
effective for not less than 20 business days (or longer, if required by
applicable law) commencing the date notice of the Exchange Offer is mailed to
the Holders (such period being called the "Exchange Offer Registration Period").
The Exchange Securities will be issued under the Indenture or an indenture (the
"Exchange Securities Indenture") between the Company and the Trustee or such
other bank or trust company reasonably satisfactory to you, as trustee (the
"Exchange Securities Trustee"), such indenture to be identical in all material
respects to the Indenture except for the transfer restrictions relating to the
Securities (as described above).
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not (i) an "affiliate" of the Company within the meaning of Rule 405 of the
Securities Act or (ii) an Exchanging Dealer (as defined below) not complying
with
675677.3
<PAGE>
the requirements of the next sentence, (b) acquires the Exchange Securities in
the ordinary course of such Holder's business and (c) has no arrangements or
understandings with any person to participate in the distribution of the
Exchange Securities) and to trade such Exchange Securities from and after their
receipt without any limitations or restrictions, except as provided herein,
under the Securities Act and without material restrictions under the securities
laws of the several states of the United States. The Company, the Initial
Purchaser and each Exchanging Dealer acknowledge that, pursuant to current
interpretations of Section 5 of the Securities Act by the Commission's staff,
(i) each Holder which is a broker-dealer electing to exchange Securities,
acquired for its own account as a result of market making activities or other
trading activities, for Exchange Securities (an "Exchanging Dealer"), is
required to deliver a prospectus containing the information set forth in Annex A
hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section, and in Annex C hereto
in the "Plan of Distribution" section of such prospectus in connection with a
sale of any such Exchange Securities received by such Exchanging Dealer pursuant
to the Registered Exchange Offer and (ii) if the Initial Purchaser elects to
sell Exchange Securities acquired in exchange for Securities constituting any
portion of an unsold allotment it is required to deliver a prospectus containing
the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in connection with such a sale.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus
forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for
not less than 20 business days commencing the date
notice of the Exchange Offer is mailed to the
Holders (or longer if required by applicable law);
(c) utilize the services of a Depositary for the
Registered Exchange Offer with an address in the
Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities
at any time prior to the close of business, New
York time, on the last business day on which the
Registered Exchange Offer shall remain open;
(e) notify each Holder that any Security not
tendered by such Holder in the Registered Exchange
Offer will remain outstanding and continue to
accrue interest, but will not retain rights under
this Agreement; and
(f) otherwise comply in all respects with all laws
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(a) accept for exchange all Securities tendered
and not validly withdrawn pursuant to the
Registered Exchange Offer;
675677.3
-2-
<PAGE>
(b) deliver to the Trustee for cancellation all
Securities so accepted for exchange; and
(c) issue and cause the Trustee or the Exchange
Securities Trustee, as the case may be, promptly
to authenticate and deliver to each Holder of
Securities, Exchange Securities equal in principal
amount to the Securities of such Holder so
accepted for exchange.
The Company shall make available for a period of 90 days after the
consummation of the Registered Exchange Offer, a copy of a prospectus which
meets the requirements of the Securities Act and forms part of the Exchange
Offer Registration Statement to any broker-dealer for use in connection with any
resale of any Exchange Securities.
Interest on each Exchange Security issued pursuant to the Registered
Exchange Offer will accrue from the last interest payment date on which interest
was paid on the Securities surrendered in exchange therefor or, if no interest
has been paid on the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Exchange Securities within the meaning of the Securities Act
and (iii) such Holder is not an "affiliate" of the Company within the meaning of
Rule 405 of the Securities Act, or if it is an affiliate, it will comply with
the registration and prospectus delivery requirements of the Securities Act to
the extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include, as of the consummation of the Registered
Exchange Offer, an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) applicable interpretations of the staff
of the Commission do not permit the Company to effect the Registered Exchange
Offer as contemplated by Section 1 hereof, or (ii) any Holder either (A) is not
eligible to participate in the Registered Exchange Offer or (B) participates in
the Registered Exchange Offer and does not receive freely transferrable Exchange
Securities in exchange for tendered Securities or (iii) for any other reason the
Registered Exchange Offer is not consummated within 180 days after the Issue
Date the following provisions shall apply:
(a) The Company shall as promptly as practicable file with the
Commission and thereafter shall use its best efforts to cause to be declared
effective a shelf registration statement on an appropriate form under the
675677.3
-3-
<PAGE>
Securities Act relating to the offer and sale of the Transfer Restricted
Securities (as defined below) by the Holders from time to time in accordance
with the methods of distribution set forth in such registration statement
(hereafter, a "Shelf Registration Statement" and, together with any Exchange
Offer Registration Statement, a "Registration Statement"); provided, however,
that no Holder of Securities or Exchange Securities (other than the Initial
Purchaser) shall be entitled to have Securities or Exchange Securities held by
it covered by such Shelf Registration Statement unless such Holder agrees in
writing to be bound by all the provisions of this Agreement applicable to such
Holder.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be usable by Holders for a period of two
years from the Issue Date (subject to extension pursuant to this Section 2(b))or
such shorter period that will terminate when all the Securities and Exchange
Securities covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement (in any such case, such period being called
the "Shelf Registration Period"). The Company shall be deemed not to have used
its reasonable best efforts to keep the Shelf Registration Statement effective
during the requisite period if it voluntarily takes any action that would result
in Holders of Securities or Exchange Securities covered thereby not being able
to offer and sell such Securities or Exchange Securities during that period,
unless such action is required by applicable law; provided, however, that the
foregoing shall not apply to actions taken by the Company in good faith and for
valid business reasons (not including avoidance of its obligations hereunder),
including, without limitation, the acquisition or divestiture of assets, so long
as the Company within 120 days thereafter complies with the requirements of
Section 4(i) hereof. Any such period during which the Company fails to keep the
Shelf Registration Statement effective and usable for offers and sales of
Securities and Exchange Securities is referred to as a "Suspension Period." A
Suspension Period shall commence on and include the date that the Company gives
notice that the Shelf Registration Statement is no longer effective or the
prospectus included therein is no longer usable for offers and sales of
Securities and Exchange Securities and shall end on the date when each Holder of
Securities and Exchange Securities covered by such registration statement either
receives the copies of the supplemented or amended prospectus contemplated by
Section 4(i) hereof or is advised in writing by the Company that use of the
prospectus may be resumed. If one or more Suspension Periods occur, the two-year
time period referenced above shall be extended by the number of days included in
each such Suspension Period.
(c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto (in
either case, other than with respect to information included therein in reliance
upon or in conformity with written information furnished to the Company by or on
behalf of any Holder specifically for use therein (the "Holders' Information"))
does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) any prospectus forming
part of any Shelf Registration Statement, and any supplement to such prospectus
(in either case, other than with respect to Holders' Information), does not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
675677.3
-4-
<PAGE>
3. Additional Interest. (a) The parties hereto agree that the Holders
of Securities will suffer damages for which there is no adequate remedy at law
if the Company fails to fulfill its obligations under Section 1 or Section 2, as
applicable, and that it would not be feasible to ascertain the extent of such
damages. Accordingly, if (i) the applicable Registration Statement is not filed
with the Commission on or prior to 60 days after the Issue Date, (ii) the
Exchange Offer Registration Statement is not declared effective within 150 days
after the Issue Date, (iii) the Registered Exchange Offer is not consummated or
a Shelf Registration Statement has not been declared effective on or prior to
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of the Commission's Staff, if later, within 45 days after
publication of the change in law or interpretation), or (iv) if after either the
Exchange Offer Registration Statement or the Shelf Registration Statement is
declared effective, such Registration Statement ceases to be effective or usable
(at any time that the Company is obligated to maintain the effectiveness
thereof) without being succeeded within 60 days by an additional Registration
Statement filed and declared effective (each such event referred to in clauses
(i) through (iii), a "Registration Default"), then the interest rate borne by
the Securities shall be increased by one-half of one percent per annum following
such 60-day period in the case of clause (i) above, following such 150-day
period in the case of clause (ii) above or following such 180-day period in the
case of clause (iii) above. Upon (x) the filing of the Exchange Offer
Registration Statement after the 60-day period described in clause (i) above,
(y) the effectiveness of the Exchange Offer Registration Statement after the
150-day period described in clause (ii) above or (z) the consummation of the
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 180-day period described in clause
(iii) above, the interest rate borne by the Securities from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate if the Company is otherwise in compliance with this
Section; provided, however, that if, after any such reduction in interest rate,
a different event specified in clause (i), (ii) or (iii) above occurs, the
interest rate may again be increased and thereafter reduced pursuant to the
foregoing provisions.
Pending the announcement of a material corporate transaction, if the
Company issues a notice that the Shelf Registration Statement is unusable, or
such a notice is required under applicable securities laws to be issued by the
Company and the aggregate number of days in any consecutive twelve-month period
for which all such notices are issued or required to be issued exceeds 60 days
in the aggregate, then the interest rate borne by the Securities will be
increased by one-half of one percent per annum following the date that such
Shelf Registration Statement ceases to be usable beyond the 60-day period
permitted above. Upon the Company declaring that the Shelf Registration
Statement is usable after the period of time described in the preceding
sentence, the interest rate borne by the Securities will be reduced to the
original interest rate if the Company is otherwise in compliance with this
Section; provided, however, that if after any such reduction in interest rate
the Shelf Registration Statement again ceases to be usable beyond the period
permitted above, the interest rate may again be increased and thereafter reduced
pursuant to the foregoing provisions. "Transfer Restricted Securities" means
each Security or Exchange Security until (i) the date on which such Security or
Exchange Security has been exchanged for a freely transferrable Exchange
Security in the Registered Exchange Offer, (ii) the date on which such Security
or Exchange Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iii) the
date on which such Security or Exchange Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is salable pursuant to Rule
144(k) under the Securities Act.
675677.3
-5-
<PAGE>
(b) The Company shall notify the Trustee within one business day after
each and every date on which an event occurs in respect of which additional
interest is required to be paid. The Company shall pay the additional interest
due on the Transfer Restricted Securities by depositing with the Paying Agent
(as defined in the Indenture) (which shall not be the Company for these
purposes) for the Transfer Restricted Securities, in trust, for the benefit of
the Holders, prior to 10:00 a.m. on the next interest payment date specified by
the Indenture (or such other indenture), sums sufficient to pay the additional
interest then due. Any amounts of additional interest due pursuant to clauses
(a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable to the Holders of
affected Notes in cash semi-annually on each interest payment date specified by
the Indenture (or such other indenture) to the record holders entitled to
receive the interest payment to be made on such date commencing with the first
such date occurring after any such additional interest commences to accrue. The
amount of additional interest will be determined by multiplying the applicable
additional interest rate by the principal amount of the affected Securities of
such Holders, multiplied by a fraction, the numerator of which is the number of
days such additional interest rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months and, in the
case of a partial month, the actual number of days elapsed), and the denominator
of which is 360.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to you, prior to the filing thereof
with the Commission, a copy of the Registration Statement and each amendment
thereof and each supplement, if any, to the prospectus included therein and, in
the event that the Initial Purchaser (with respect to any portion of an unsold
allotment from the original offering) is participating in the Registered
Exchange Offer or the Shelf Registration, shall use reasonable efforts to
reflect in each such document, when so filed with the Commission, such comments
as you reasonably may propose; (ii) if applicable, include the information set
forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of the prospectus forming a part
of the Exchange Offer Registration Statement, and include the information set
forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and (iii) if requested by the Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K under the
Securities Act, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement.
(b) The Company shall advise you and, if requested by the Holders, but
only as to events set forth in clauses (i) and (ii) below, the Holders and, if
requested by you, confirm such advice in writing (which advice pursuant to
clauses (ii)-(iv) hereof shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment
thereto has been filed with the Commission and when such
Registration Statement or any post-effective amendment
thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus
included therein or for additional information;
675677.3
-6-
<PAGE>
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Securities or the Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(iv) of the happening of any event that requires the making
of any changes in any Registration Statement or the
prospectus so that, as of such date, the statements therein
are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Holder so requests in writing, all exhibits (including those
incorporated by reference).
(d) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use in accordance with
applicable law of the prospectus or any amendment or supplement thereto by each
of the selling Holders of Transfer Restricted Securities in connection with the
offering and sale of the Transfer Restricted Securities covered by the
prospectus or any amendment or supplement thereto.
(e) The Company will furnish to each Exchanging Dealer or the Initial
Purchaser, as applicable, which so requests, without charge, at least one copy
of the Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Exchanging
Dealer or Initial Purchaser, as applicable, so requests in writing, all exhibits
(including those incorporated by reference) except those previously filed by
EDGAR.
(f) The Company will, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer or the Initial Purchaser, as
applicable, without charge, as many copies of the prospectus included within the
coverage of the Exchange Offer Registration Statement and any amendment or
supplement thereto as such Exchanging Dealer or the Initial Purchaser, as
applicable, may reasonably request for delivery by (i) such Exchanging Dealer in
connection with a sale of Exchange Securities received by it pursuant to the
Registered Exchange Offer or (ii) the Initial Purchaser in connection with a
sale of Exchange Securities received by it in exchange for Securities
constituting any portion of an unsold allotment; and the Company consents to the
use in accordance with applicable law of the prospectus or any amendment or
supplement thereto by any such Exchanging Dealer or the Initial Purchaser, as
applicable, as aforesaid.
(g) Prior to any public offering of Securities or Exchange Securities
pursuant to any Registration Statement, the Company will use its reasonable best
efforts to register or qualify or cooperate with the Holders of Securities
included therein and its counsel in connection with the registration or
qualification of such securities for offer and sale under the securities or
675677.3
-7-
<PAGE>
blue sky laws of such jurisdictions as any such Holder reasonably requests in
writing and do any and all other acts or things necessary or advisable to enable
the offer and sale in such jurisdictions of the Securities or Exchange
Securities covered by such Registration Statement; provided, however, that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process or to taxation in any such jurisdiction
where it is not then so subject.
(h) The Company will cooperate with the Holders of Securities or
Exchange Securities to facilitate the timely preparation and delivery of
certificates representing Securities or Exchange Securities to be sold pursuant
to any Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request in writing
prior to sales of Securities or Exchange Securities pursuant to such
Registration Statement.
(i) If (i) any event contemplated by paragraphs (b)(ii) through (iv)
above occurs during the period in which the Company is required to maintain an
effective Registration Statement or (ii) any Suspension Period remains in effect
more than 120 days after the occurrence thereof, the Company will promptly
prepare a post-effective amendment to the Registration Statement or a supplement
to the related prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Securities or purchasers of Exchange
Securities from a Holder, the prospectus will not include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(j) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities or
Exchange Securities, as the case may be, and provide the applicable trustee with
printed certificates for the Securities or Exchange Securities, as the case may
be, in a form eligible for deposit with The Depository Trust Company, or any
successor depository.
(k) The Company will use its best efforts to comply with all
applicable rules and regulations of the Commission and will make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act; provided that in no event
shall such earnings statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of the applicable Registration Statement, which statements shall cover such
12-month period.
(l) The Company will cause the Indenture or the Exchange Securities
Indenture, as the case may be, to be qualified under the Trust Indenture Act as
required by applicable law in a timely manner.
(m) The Company may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Transfer Restricted Securities as the Company may from time to time reasonably
require for inclusion in such Registration Statement, and the Company may
exclude from such registration the Transfer Restricted Securities of any Holder
that
675677.3
-8-
<PAGE>
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
(n) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (iv) hereof, such
Holder will discontinue disposition of such Transfer Restricted Securities and
use of the applicable prospectus until such Holder's receipt of copies of the
supplemental or amended prospectus contemplated by Section 4(i) hereof, or until
advised in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed. If the Company shall give any notice under Section
4(b)(ii) through (iv) during the period that the Company is required to maintain
an effective Registration Statement (the "Effectiveness Period"), such
Effectiveness Period shall be extended by the number of days during such period
from and including the date of the giving of such notice to and including the
date when each seller of Transfer Restricted Securities covered by such
Registration Statement shall have received (x) the copies of the supplemental or
amended prospectus contemplated by Section 4(i) (if an amended or supplemental
prospectus is required) or (y) the Advice (if no amended or supplemental
prospectus is required).
(o) The Company will cooperate with each seller of Transfer Restricted
Securities covered by any Registration Statement and their respective counsel in
connection with any filings required to be made with the NASD.
(p) The Company will use its best efforts to take all other steps
necessary to effect the registration of the Transfer Restricted Securities
covered by a Registration Statement contemplated hereby.
5. Registration Expenses.
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Exchange Offer Registration Statement or a Shelf Registration Statement is
filed or becomes effective, including, without limitation, (i) all registration
and filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an underwritten offering
and (B) fees and expenses of compliance with state securities or Blue Sky laws,
(ii) printing expenses, including, without limitation, expenses of printing
certificates for Securities or Exchange Securities in a form eligible for
deposit with The Depository Trust Company and of printing prospectuses if the
printing of prospectuses is requested by the managing underwriter or
underwriters, if any, by the Holders of a majority in aggregate principal amount
of the Securities included in any Registration Statement or sold by any
Exchanging Dealer, as the case may be, (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company, (v) fees and
disbursements of the Company's independent certified public accountants
(including, without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance by or incident to
such performance), (vi) rating agency fees, if any, and any fees associated with
making the Securities or Exchange Securities eligible for trading through The
Depository Trust Company, (vii) Securities Act liability insurance, if the
Company desires such insurance, (viii) fees and expenses of all other persons
retained by the Company, (ix) internal expenses of the Company (including,
without limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties), (x) the expense of any annual
audit, (ix) the fees and expenses incurred in connection with the listing of the
675677.3
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securities to be registered on any securities exchange or any inter-dealer
quotation system, if applicable, and (xii) the expenses relating to printing,
word processing and distributing all Registration Statements, underwriting
agreements, securities sales agreements, indentures and any other documents
necessary in order to comply with this Agreement.
(b) The Company shall (i) reimburse the Holders of the Securities
being registered in a Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Securities to be included in such Registration Statement and (ii) reimburse
out-of-pocket expenses (other than legal expenses) of Holders of Securities
incurred in connection with the registration and sale of the Securities pursuant
to a Shelf Registration Statement or in connection with the exchange of
Securities pursuant to the Exchange Offer. In addition, the Company shall
reimburse the Initial Purchaser for the reasonable fees and expenses of one
counsel in connection with the Exchange Offer which shall be Brown & Wood LLP.
6. Indemnification. (a) In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Exchanging Dealer or the Initial Purchaser, as
applicable, the Company shall indemnify and hold harmless each Holder and
Exchanging Dealer, and each of their directors, officers, agents and employees
and each person, if any, who controls such Holder or Exchanging Dealer within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and the directors, officers, agents and employees of such controlling
persons against any and all loss, liability, claim and damage whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplements thereto or the omission
or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and shall reimburse each Holder promptly upon demand for
any and all expenses (including, subject to Section 6(c) hereof, the fees and
disbursements of counsel chosen by the indemnified party), reasonably incurred
as such expenses are incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental or
regulatory agency or body, commenced or threatened, or any claim based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission; provided, however, that (i) this indemnity shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with Holders' Information and (ii) this
indemnity with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any related preliminary prospectus shall not
enure to the benefit of any indemnified party from whom the person asserting any
such loss, claim, damage or liability received Securities or Exchange Securities
if such persons did not receive a copy of the final prospectus at or prior to
the confirmation of the sale of such Securities or Exchange Securities to such
person in any case where such delivery is required by the Securities Act and the
untrue statement or omission of material fact contained in the related
preliminary prospectus was corrected in the final prospectus unless such failure
to deliver the final prospectus was a result of noncompliance by the Company
with Sections 4(c), 4(d), 4(e) or 4(f).
(b) In the event of a Shelf Registration Statement, each Holder and
Exchanging Dealer agrees to indemnify and hold harmless the Company, its
directors, officers, agents and employees and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
675677.3
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of the Exchange Act and the directors, officers, agents and employees of such
controlling persons against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 6(a) hereof, as
incurred, arising out of or based upon any untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment or supplement thereto) in reliance on and in conformity with
Holders' Information furnished to the Company by such Holder or Exchanging
Dealer; provided, however, that no such Holder or Exchanging Dealer shall be
liable for any indemnity claims hereunder in excess of the amount of net
proceeds received by such Holder or Exchanging Dealer from the sale of
Securities or Exchange Securities pursuant to the Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any claim or action commenced against
it in respect of which indemnity may be sought hereunder, enclosing a copy of
all papers properly served on such indemnified party; provided, however, that
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any obligation that it may have pursuant to this Section except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; provided further, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability that it may have to an indemnified party otherwise than on account of
this indemnity agreement. If any such claim or action shall be brought against
an indemnified party, the indemnified party shall notify the indemnifying party
thereof, and the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof; provided, however,
that an indemnified party will have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based on the written advice
of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based on
the written advice of counsel to the indemnified party) between the indemnified
party and indemnifying party (in which case the indemnifying party will not have
the right to direct the defense of such action on behalf of the indemnified
party) or (4) the indemnifying party has not in fact employed counsel to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel for the indemnified party will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent, but if settled with its written
consent or if there be a final judgment of the plaintiff in any such
675677.3
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<PAGE>
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional written release in form
and substance satisfactory to the indemnified party of such indemnified party
from all liability on claims that are the subject matter of such proceeding, and
does not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of such indemnified party.
(d) If a claim by an indemnified party for indemnification under this
Section 6 is unenforceable even though the express provisions hereof provide for
indemnification in such case, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any losses shall be deemed to include, subject
to the limitations set forth in Section 6(c) herein, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, an indemnifying party that is a
holder of Transfer Restricted Securities or Exchange Securities shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Transfer Restricted Securities or Exchange Securities sold by
such indemnifying party and distributed to the public were offered to the public
exceeds the amount of any damages that such indemnifying party would have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act)
shall be entitled to any contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of at least a majority in aggregate
principal amount of the Securities and the Exchange Securities, taken as a
single class. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of the Holders of Securities or Exchange Securities whose Securities or
Exchange Securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be
675677.3
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<PAGE>
given by Holders of at least a majority in aggregate principal amount of the
Securities or Exchange Securities being sold by such Holders pursuant to such
Registration Statement. Notwithstanding the provisions of this Section 7(a), (i)
this Agreement may be amended, without consent of any Holder of the Securities
or Exchange Securities, by written agreement signed by the Company and the
Initial Purchaser, to cure any ambiguity, correct or supplement any provision of
this Agreement that may be inconsistent with any other provision of this
Agreement or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with other
provisions of this Agreement and (ii) this Agreement may be amended, modified or
supplemented, and waivers and consents to departures from the provisions hereof
may be given, by written agreement signed by the Company and the Initial
Purchaser to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate to
comply with applicable law (including any interpretation of the Staff of the
SEC) or any change therein.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 7(b),
which address initially is, with respect to each Holder, the address
of such Holder maintained by the Registrar under the Indenture;
(2) if to you, initially at your address set forth in the Purchase
Agreement; and
(3) if to the Company, initially at the address of the Company set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(c) Successors And Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopies) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law; Submission to Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
675677.3
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<PAGE>
(g) No Inconsistent Agreements. The Company has not and shall not, on
or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the holders of Transfer Restricted
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company has not previously entered into any agreement which remains in
effect granting any registration rights with respect to any of its debt
securities to any person. Without limiting the generality of the foregoing,
without the written consent of the holders of at least a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities, the
Company shall not grant to any person the right to request the Company to
register any debt securities of the Company under the Securities Act unless the
rights so granted are not in conflict or inconsistent with the provisions of the
Agreement.
(h) No Piggyback on Registrations. Neither the Company, nor any of its
security holders (other than the holders of Transfer Restricted Securities in
such capacity) shall have the right to include any securities of the Company in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.
(i) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Remedies. In the event of a breach by the Company, or by any
holder of Transfer Restricted Securities, of any of their obligations under this
Agreement, each holder of Transfer Restricted Securities or the Company, as the
case may be, in addition to being entitled to exercise all rights granted by
law, including recovery of damages (other than the recovery of damages for a
breach by the Company of its obligations under Sections 1 or 2 hereof for which
liquidated damages have been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The Company
and each holder of Transfer Restricted Securities agree that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agree that,
in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate.
675677.3
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Very truly yours,
AMPEX CORPORATION
By: /s/ CRAIG L. MCKIBBEN
-------------------------
Name: Craig L. McKibben
Title: Vice President
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written:
FIRST ALBANY CORPORATION
By: /s/ Frank P. Lunn
----------------------------
Name: Frank P. Lunn
Title: Senior Vice President
675677.3
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<PAGE>
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 90 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
675677.3
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<PAGE>
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
675677.3
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<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 90 days after the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until _______________,
199_, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.(1)
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
- -----------
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
675677.3
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ANNEX D
|_| CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
---------------------------------------
Address:
---------------------------------------
---------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
675677.3
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<PAGE>
EXHIBIT 4.4
WARRANT AND WARRANT SHARE
REGISTRATION RIGHTS AGREEMENT
January 28, 1998
First Albany Corporation
One Penn Plaza
New York, NY 10119
Dear Sirs:
Ampex Corporation, an Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Initial Purchaser"), upon the terms set forth in a
purchase agreement dated January 26, 1998 (the "Purchase Agreement"), warrants
(the "Warrants") to purchase up to 1,020,000 shares of Class A Common Stock, par
value $.01 per share, of the Company (the "Warrant Stock" and, together with the
Warrants, the "Securities"), offered in connection with the sale of $30,000,000
aggregate principal amount of its 12% Senior Notes due 2003 (the "Notes"). The
Securities shall be issued pursuant to a Warrant Agreement, dated as of January
28, 1998 (the "Warrant Agreement"), between the Company and American Stock
Transfer & Trust Company, as warrant agent (the "Warrant Agent"). Unless
otherwise indicated, capitalized terms used but not specifically defined herein
have the respective meanings ascribed thereto in the Purchase Agreement. As an
inducement to the Initial Purchaser to enter into the Purchase Agreement and in
satisfaction of a condition to your obligations thereunder, the Company agrees
with you, for the benefit of the holders of the Securities (including the
Initial Purchaser) (the "Holders"), as follows:
1. Shelf Registration. The Company, as promptly as practicable, but
not later than 60 days following the date on which the original Securities were
sold to the Initial Purchaser pursuant to the Purchase Agreement (the "Issue
Date"), shall file with the Securities and Exchange Commission (the
"Commission") and thereafter shall use its best efforts to cause to be declared
effective no later than 120 days following the Issue Date a shelf registration
statement (the "Shelf Registration Statement") on an appropriate form under the
Securities Act relating to the offer and sale of the Securities by the Holders
from time to time in accordance with the methods of distribution set forth in
such Shelf Registration Statement; provided, however, that no Holder of
Securities(other than the Initial Purchaser) shall be entitled to have
Securities held by it covered by such Shelf Registration Statement unless such
Holder agrees in writing to be bound by all the provisions of this Agreement
applicable to such Holder.
(a) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be usable by Holders until the earlier of (i)
such time as all warrants have been exercised and (ii) the second anniversary of
the Issue Date, subject to extension pursuant to this Section 1(a) (in any such
case, such period being called the "Shelf Registration Period"). The Company
shall be deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of Securities covered thereby not
being able to exercise, offer and sell such Securities during that period,
unless such action is required by applicable law; provided, however, that the
foregoing shall not apply to actions taken by the Company in good faith and for
valid business reasons (not including avoidance of its obligations hereunder),
including, without limitation, the acquisition or divestiture of assets, so long
676304.2
<PAGE>
as the Company within 120 days thereafter complies with the requirements of
Section 2(g) hereof. Any such period during which the Company fails to keep the
Shelf Registration Statement effective and usable for the exercise, offer and
sale of Securities is referred to as a "Suspension Period." A Suspension Period
shall commence on and include the date that the Company gives notice that the
Shelf Registration Statement is no longer effective or the prospectus included
therein is no longer usable for offers and sales of Securities and shall end on
the date when each Holder of Securities covered by such registration statement
either receives the copies of the supplemented or amended prospectus
contemplated (the "Prospectus Supplement," together with the Shelf Registration
Statement, the "Registration Statement") by Section 2(g) hereof or is advised in
writing by the Company that use of the prospectus may be resumed. If one or more
Suspension Periods occur, the Shelf Registration Period shall be extended by the
number of days included in each such Suspension Period.
(b) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
the Prospectus Supplement thereto relating to the Securities complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto and
such Prospectus Supplement (in either case, other than with respect to
information included therein in reliance upon or in conformity with written
information furnished to the Company by or on behalf of any Holder specifically
for use therein (the "Holders' Information")) does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any Shelf
Registration Statement, and any Prospectus Supplement (in either case, other
than with respect to Holders' Information), does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
2. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to you, prior to the filing thereof
with the Commission, a copy of the Registration Statement and each amendment
thereof, if any, to the prospectus included therein and, in the event that the
Initial Purchaser (with respect to any portion of an unsold allotment from the
original offering) is participating in the Shelf Registration, shall use
reasonable efforts to reflect in each such document, when so filed with the
Commission, such comments as you reasonably may propose; and (ii) if requested
by the Initial Purchaser, include the information required by Items 507 or 508
of Regulation S-K under the Securities Act, as applicable, in the prospectus
forming a part of the Registration Statement.
(b) The Company shall advise you and, if requested by the Holders, but
only as to events set forth in clauses (i) and (ii) below, the Holders and, if
requested by you, confirm such advice in writing (which advice pursuant to
clauses (ii)-(iv) hereof shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment
thereto has been filed with the Commission and when such
Registration Statement or any post-effective amendment
thereto has become effective;
676304.2
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(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus
included therein or for additional information;
(iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iv) of the happening of any event that requires the making
of any changes in any Registration Statement or the
prospectus so that, as of such date, the statements therein
are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Company will furnish to each Holder of Securities included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits (including those incorporated by
reference).
(d) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the prospectus
(including each preliminary prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto (including the Prospectus
Supplement) as such Holder may reasonably request; and the Company consents to
the use in accordance with applicable law of the prospectus or any amendment or
supplement thereto by each of the Holders exercising Warrants and each of the
selling Holders of the Securities in connection with the offering and sale of
the Securities covered by the prospectus or any amendment or supplement thereto.
(e) Prior to any public offering of Securities pursuant to any
Registration Statement, the Company will use its reasonable best efforts to
register or qualify or cooperate with the Holders of Securities included therein
and its counsel in connection with the registration or qualification of such
securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holder reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities covered by such Registration Statement;
provided, however, that the Company will not be required to qualify generally to
do business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to taxation in
any such jurisdiction where it is not then so subject.
(f) The Company will cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names as
Holders may request in writing prior to sales of Securities pursuant to such
Registration Statement.
(g) If (i) any event contemplated by paragraphs (b)(ii) through (iv)
above occurs during the period in which the Company is required to maintain
676304.2
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an effective Registration Statement or (ii) any Suspension Period remains in
effect more than 120 days after the occurrence thereof, the Company will
promptly prepare a post-effective amendment to the Registration Statement or a
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to purchasers of the Securities from a Holder, the
prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(h) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities, as the
case may be, and provide the applicable trustee with printed certificates for
the Securities, as the case may be, in a form eligible for deposit with The
Depository Trust Company, or any successor depository.
(i) The Company will use its best efforts to comply with all
applicable rules and regulations of the Commission and will make generally
available to its security holders as soon as practicable after the effective
date of the applicable Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act; provided that in no event
shall such earnings statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of the applicable Registration Statement, which statements shall cover such
12-month period.
(j) The Company may require each Holder of Securities to be sold
pursuant to any Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of such Securities as the
Company may from time to time reasonably require for inclusion in such
Registration Statement, and the Company may exclude from such registration the
Securities of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(k) In the case of a Shelf Registration Statement, each Holder of
Securities to be registered pursuant thereto agrees by acquisition of such
Securities that, upon receipt of any notice from the Company pursuant to Section
2(b)(ii) through (iv) hereof, such Holder will discontinue disposition of such
Securities and use of the applicable prospectus until such Holder's receipt of
copies of the supplemental or amended prospectus contemplated by Section 2(a)
hereof, or until advised in writing (the "Advice") by the Company that the use
of the applicable prospectus may be resumed. If the Company shall give any
notice under Section 2(b)(ii) through (iv) during the period that the Company is
required to maintain an effective Registration Statement (the "Effectiveness
Period"), such Effectiveness Period shall be extended by the number of days
during such period from and including the date of the giving of such notice to
and including the date when each seller of Securities covered by such
Registration Statement shall have received (x) the copies of the supplemental or
amended prospectus contemplated by Section 2(a) (if an amended or supplemental
prospectus is required) or (y) the Advice (if no amended or supplemental
prospectus is required).
(l) The Company will cooperate with the Holder of Securities covered
by any Registration Statement and their respective counsel in connection with
any filings required to be made with the NASD.
(m) The Company will use its best efforts to take all other steps
necessary to effect the registration of the Securities covered by a Registration
676304.2
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Statement contemplated hereby.
3. Registration Expenses.
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Shelf Registration Statement is filed or becomes effective, including,
without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the NASD
in connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws, (ii) printing expenses,
including, without limitation, expenses of printing certificates for Securities
in a form eligible for deposit with The Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Securities included in any Registration Statement,(iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) fees and disbursements of the Company's independent
certified public accountants (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance by or incident to such performance), (vi) rating agency fees, if
any, and any fees associated with making the Securities or Exchange Securities
eligible for trading through The Depository Trust Company, (vii) Securities Act
liability insurance, if the Company desires such insurance, (viii) fees and
expenses of all other persons retained by the Company, (ix) internal expenses of
the Company (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(x) the expense of any annual audit, (ix) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange or any inter-dealer quotation system, if applicable, and (xii) the
expenses relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement.
(b) The Company shall reimburse (i) the Holders of the Securities
being registered in a Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel (in addition to appropriate local
counsel) chosen by the Holders of a majority of the Securities to be included in
such Registration Statement, (ii) out-of-pocket expenses (other than legal
expenses) of Holders of Securities incurred in connection with the registration
and sale of the Securities pursuant to a Shelf Registration Statement and (iii)
reasonable legal fees and expenses, if any, of the Initial Purchaser relating to
the Shelf Registration Statement and any amendment or supplement thereto.
4. Indemnification. (a) In the event of a Shelf Registration
Statement, the Company shall indemnify and hold harmless each Holder, and each
of their directors, officers, agents and employees and each person, if any, who
controls such Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act and the directors, officers, agents and employees
of such controlling persons against any and all loss, liability, claim and
damage whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or in any amendment or supplements
thereto or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and shall reimburse
each Holder promptly upon demand for any and all expenses (including, subject to
Section 4(c) hereof, the fees and
676304.2
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<PAGE>
disbursements of counsel chosen by the indemnified party), reasonably incurred
as such expenses are incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental or
regulatory agency or body, commenced or threatened, or any claim based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission; provided, however, that (i) this indemnity shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with Holders' Information and (ii) this
indemnity with respect to any untrue statement or alleged untrue statement or
omission or alleged omission in any related preliminary prospectus shall not
enure to the benefit of any indemnified party from whom the person asserting any
such loss, claim, damage or liability received Securities if such persons did
not receive a copy of the final prospectus at or prior to the confirmation of
the sale of such Securities to such person in any case where such delivery is
required by the Securities Act and the untrue statement or omission of material
fact contained in the related preliminary prospectus was corrected in the final
prospectus unless such failure to deliver the final prospectus was a result of
noncompliance by the Company with Sections 2(c) or 2(d).
(b) In the event of a Shelf Registration Statement, each Holder agrees
to indemnify and hold harmless the Company, its directors, officers, agents and
employees and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act and the
directors, officers, agents and employees of such controlling persons against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 4(a) hereof, as incurred, arising out of or based
upon any untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment or supplement
thereto) in reliance on and in conformity with Holders' Information furnished to
the Company by such Holder; provided, however, that no such Holder shall be
liable for any indemnity claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Securities pursuant to the
Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any claim or action commenced against
it in respect of which indemnity may be sought hereunder, enclosing a copy of
all papers properly served on such indemnified party; provided, however, that
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any obligation that it may have pursuant to this Section except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; provided further, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability that it may have to an indemnified party otherwise than on account of
this indemnity agreement. If any such claim or action shall be brought against
an indemnified party, the indemnified party shall notify the indemnifying party
thereof, and the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 4 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof; provided, however,
that an indemnified party will have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in
676304.2
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writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on the written advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on the written advice of counsel to the
indemnified party) between the indemnified party and indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel for the indemnified party will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm of attorneys (in addition to any local counsel)
at any one time for all such indemnified party or parties. Each indemnified
party, as a condition of the indemnity agreements contained in Sections 4(a) and
4(b), shall use all reasonable efforts to cooperate with the indemnifying party
in the defense of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its written
consent, but if settled with its written consent or if there be a final judgment
of the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional written
release in form and substance satisfactory to the indemnified party of such
indemnified party from all liability on claims that are the subject matter of
such proceeding, and does not include a statement as to or an admission of
fault, culpability or failure to act by or on behalf of such indemnified party .
(d) If a claim by an indemnified party for indemnification under this
Section 4 is unenforceable even though the express provisions hereof provide for
indemnification in such case, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses in such proportion
as is appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any losses shall be deemed to include, subject
to the limitations set forth in Section 6(c) herein, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
676304.2
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Notwithstanding the provisions of this Section, an indemnifying party that is a
holder of Securities shall not be required to contribute any amount in excess of
the amount by which the total price at which the Securities sold by such
indemnifying party and distributed to the public were offered to the public
exceeds the amount of any damages that such indemnifying party would have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act)
shall be entitled to any contribution from any person who was not guilty of such
fraudulent misrepresentation.
5. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of at least a majority of the
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of the Holders of Securities whose Securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Securities being sold by such Holders pursuant to such
Registration Statement. Notwithstanding the provisions of this Section 5(a), (i)
this Agreement may be amended, without consent of any Holder of the Securities,
by written agreement signed by the Company and the Initial Purchaser, to cure
any ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement and (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company and the Initial Purchaser to the extent that any
such amendment, modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with applicable law
(including any interpretation of the Staff of the SEC) or any change therein.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 5(b),
which address initially is, with respect to each Holder, the address
of such Holder maintained by the Warrant Agreement under the Warrant
Agreement;
(2) if to you, initially at your address set forth in the Purchase
Agreement; and
(3) if to the Company, initially at the address of the Company set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(c) Successors And Assigns. This Agreement shall be binding upon
676304.2
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the Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopies) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) Governing Law; Submission to Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
(g) No Inconsistent Agreements. The Company has not and shall not,
during the term of this Agreement, enter into any agreement that is inconsistent
with the rights granted to the holders of Securities in this Agreement or
otherwise conflicts with the provisions hereof. Without limiting the generality
of the foregoing, without the written consent of the holders of at least a
majority of the then outstanding Transfer Restricted Securities, the Company
shall not grant to any person the right to request the Company to register any
equity securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.
(h) No Piggyback on Registrations. Neither the Company, nor any of its
security holders (other than the holders of the Securities in such capacity)
shall have the right to include any securities of the Company in any Shelf
Registration other than the Securities.
(i) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Remedies. In the event of a breach by the Company, or by any
holder of Securities, of any of their obligations under this Agreement, each
holder of Securities or the Company, as the case may be, in addition to being
entitled to exercise all rights granted by law, including recovery of damages
will be entitled to specific performance of its rights under this Agreement. The
Company and each holder of Securities agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
676304.2
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
Very truly yours,
AMPEX CORPORATION
By: /s/ CRAIG L. MCKIBBEN
-------------------------
Name: Craig L. McKibben
Title: Vice President
The foregoing Agreement is hereby confirmed
And accepted as of the date first above written:
FIRST ALBANY CORPORATION
By: /s/ FRANK P. LUNN
----------------------------
Name: Frank P. Lunn
Title: Senior Vice President
676304.2
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