exv4w12






EX-4.12




 

 








PENSON WORLDWIDE, INC.




and




[TRUSTEE],




Trustee




INDENTURE




Dated as of                      ___, 20___




Subordinated Debt Securities




 

 






 









 












PENSON WORLDWIDE, INC.

Certain Sections of this Indenture relating to

Sections 3.10 through 3.18, inclusive, of the

Trust Indenture Act of 1939:




	 	 	 	 	 	 	 	 	 
	Trust Indenture	 	 	 	 
	Act Section	 	 	 	Indenture Section
	§ 310
	 	 	 	 	 	 	 	 
	 

	 	(a)(1)
	 	 	 	6.09
	 

	 	(a)(2)
	 	 	 	6.09
	 

	 	(a)(3)
	 	 	 	Not Applicable

	 

	 	(a)(4)
	 	 	 	Not Applicable

	 

	 	(a)(5)
	 	 	 	6.09
	 

	 	(b)
	 	 	 	6.07
	 

	 	 	 	 	 	6.09
	 

	 	(c)
	 	 	 	Not Applicable

	§ 311

	 	(a)
	 	 	 	6.10
	 

	 	(b)
	 	 	 	6.10
	 

	 	(c)
	 	 	 	Not Applicable

	§ 312

	 	(a)
	 	 	 	7.01
	 

	 	 	 	 	 	7.02
	 

	 	(b)
	 	 	 	7.02
	 

	 	(c)
	 	 	 	7.02
	§ 313

	 	(a)
	 	 	 	7.03
	 

	 	(b)
	 	 	 	7.03
	 

	 	(c)
	 	 	 	7.03
	 

	 	(d)
	 	 	 	7.03
	§ 314

	 	(a)
	 	 	 	7.04
	 

	 	(a)(4)
	 	 	 	1.01
	 

	 	 	 	 	 	10.05
	 

	 	(b)
	 	 	 	Not Applicable

	 

	 	(c)(1)
	 	 	 	1.02
	 

	 	(c)(2)
	 	 	 	1.02
	 

	 	(c)(3)
	 	 	 	Not Applicable

	 

	 	(d)
	 	 	 	Not Applicable

	 

	 	(e)
	 	 	 	1.02
	§ 315

	 	(a)
	 	 	 	6.01
	 

	 	(b)
	 	 	 	6.05
	 

	 	(c)
	 	 	 	6.01
	 

	 	(d)
	 	 	 	6.01
	 

	 	(e)
	 	 	 	5.14
	§ 316

	 	(a)
	 	 	 	1.01
	 

	 	(a)(1)(A)
	 	 	 	5.02
	 

	 	 	 	 	 	5.12
	 

	 	 	 	 	 	5.13
	 

	 	(a)(1)(B)
	 	 	 	5.13
	 

	 	(a)(2)
	 	 	 	Not Applicable

	 

	 	(b)
	 	 	 	5.08
	 

	 	(c)
	 	 	 	1.05
	§ 317

	 	(a)(1)
	 	 	 	5.03
	 

	 	(a)(2)
	 	 	 	5.04
	 

	 	(b)
	 	 	 	10.03
	§ 318

	 	(a)
	 	 	 	1.08







NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the
Indenture.








 









 








TABLE OF CONTENTS




	 	 	 	 	 	 
	 	 	 	 	 	Page
	 
	 	 	 	 	 
	ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	1
	Section 1.01
	 	Definitions	 	 	1
	Section 1.02
	 	Compliance Certificates and Opinions	 	 	8
	Section 1.03
	 	Form of Documents Delivered to Trustee	 	 	9
	Section 1.04
	 	No Adverse Interpretation of Other Agreements	 	 	9
	Section 1.05
	 	Acts of Holders; Record Dates	 	 	9
	Section 1.06
	 	Notices, Etc., to Trustee, Company	 	 	11
	Section 1.07
	 	Notice to Holders; Waiver	 	 	12
	Section 1.08
	 	Conflict with Trust Indenture Act	 	 	12
	Section 1.09
	 	Effect of Headings and Table of Contents	 	 	13
	Section 1.10
	 	Successors and Assigns	 	 	13
	Section 1.11
	 	Separability Clause	 	 	13
	Section 1.12
	 	Benefits of Indenture	 	 	13
	Section 1.13
	 	Governing Law	 	 	13
	Section 1.14
	 	Legal Holidays	 	 	13
	Section 1.15
	 	Waiver of Jury Trial	 	 	13
	Section 1.16
	 	Force Majeure	 	 	13
	ARTICLE II SECURITY FORMS
	 	 	14
	Section 2.01
	 	Forms Generally	 	 	14
	Section 2.02
	 	Form of Face of Security	 	 	14
	Section 2.03
	 	Form of Reverse of Security	 	 	16
	Section 2.04
	 	Form of Legend for Global Securities	 	 	21
	Section 2.05
	 	Form of Trustee’s Certificate of Authentication	 	 	21
	ARTICLE III THE SECURITIES
	 	 	22
	Section 3.01
	 	Amount Unlimited; Issuable in Series	 	 	22
	Section 3.02
	 	Denominations	 	 	25
	Section 3.03
	 	Execution, Authentication, Delivery and Dating	 	 	25
	Section 3.04
	 	Temporary Securities	 	 	26
	Section 3.05
	 	Registration, Registration of Transfer and Exchange	 	 	27






i









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 
	 	 	 	 	 	Page
	 
	 	 	 	 	 
	Section 3.06
	 	Mutilated, Destroyed, Lost and Stolen Securities	 	 	28
	Section 3.07
	 	Payment of Interest; Interest Rights Preserved	 	 	29
	Section 3.08
	 	Persons Deemed Owners	 	 	30
	Section 3.09
	 	Cancellation	 	 	30
	Section 3.10
	 	Computation of Interest	 	 	31
	Section 3.11
	 	CUSIP Numbers	 	 	31
	ARTICLE IV SATISFACTION AND DISCHARGE
	 	 	31
	Section 4.01
	 	Satisfaction and Discharge of Indenture	 	 	31
	Section 4.02
	 	Application of Trust Money	 	 	32
	ARTICLE V REMEDIES
	 	 	32
	Section 5.01
	 	Events of Default	 	 	32
	Section 5.02
	 	Acceleration of Maturity; Rescission and Annulment	 	 	34
	Section 5.03
	 	Collection of Indebtedness and Suits for Enforcement by Trustee	 	 	35
	Section 5.04
	 	Trustee May File Proofs of Claim	 	 	35
	Section 5.05
	 	Trustee May Enforce Claims Without Possession of Securities	 	 	36
	Section 5.06
	 	Application of Money Collected	 	 	36
	Section 5.07
	 	Limitation on Suits	 	 	37
	Section 5.08
	 	Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert	 	 	37
	Section 5.09
	 	Restoration of Rights and Remedies	 	 	37
	Section 5.10
	 	Rights and Remedies Cumulative	 	 	37
	Section 5.11
	 	Delay or Omission Not Waiver	 	 	38
	Section 5.12
	 	Control by Holders	 	 	38
	Section 5.13
	 	Waiver of Past Defaults	 	 	38
	Section 5.14
	 	Undertaking for Costs	 	 	38
	Section 5.15
	 	Waiver of Usury, Stay or Extension Laws	 	 	39
	ARTICLE VI THE TRUSTEE
	 	 	39
	Section 6.01
	 	Duties of Trustee	 	 	39
	Section 6.02
	 	Rights of Trustee	 	 	40






ii









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 
	 	 	 	 	 	Page
	 
	 	 	 	 	 
	Section 6.03
	 	Individual Rights of Trustee	 	 	42
	Section 6.04
	 	Trustee’s Disclaimer	 	 	42
	Section 6.05
	 	Notice of Default	 	 	42
	Section 6.06
	 	Compensation and Indemnity	 	 	42
	Section 6.07
	 	Replacement of Trustee	 	 	43
	Section 6.08
	 	Successor Trustee by Merger, Etc	 	 	44
	Section 6.09
	 	Eligibility; Disqualification	 	 	45
	Section 6.10
	 	Preferential Collection of Claims against Company	 	 	45
	ARTICLE VII HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
	 	 	45
	Section 7.01
	 	Company to Furnish Trustee Names and Addresses of Holders	 	 	45
	Section 7.02
	 	Preservation of Information; Communications to Holders	 	 	45
	Section 7.03
	 	Reports by Trustee	 	 	46
	Section 7.04
	 	Reports by Company	 	 	46
	ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	46
	Section 8.01
	 	Company May Merge, Etc., Only on Certain Terms	 	 	46
	Section 8.02
	 	Successor Corporation Substituted	 	 	47
	ARTICLE IX SUPPLEMENTAL INDENTURES
	 	 	47
	Section 9.01
	 	Supplemental Indentures Without Consent of Holders	 	 	47
	Section 9.02
	 	Supplemental Indentures with Consent of Holders	 	 	48
	Section 9.03
	 	Execution of Supplemental Indentures	 	 	50
	Section 9.04
	 	Effect of Supplemental Indentures	 	 	50
	Section 9.05
	 	Conformity with Trust Indenture Act	 	 	50
	Section 9.06
	 	Reference in Securities to Supplemental Indentures	 	 	50
	ARTICLE X COVENANTS
	 	 	50
	Section 10.01
	 	Payment of Securities	 	 	50
	Section 10.02
	 	Maintenance of Office or Agency	 	 	50
	Section 10.03
	 	Money for Securities Payments to Be Held in Trust	 	 	51
	Section 10.04
	 	Corporate Existence	 	 	52






iii









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 
	 	 	 	 	 	Page
	 
	 	 	 	 	 
	Section 10.05
	 	Compliance Certificate; Notice of Default	 	 	52
	ARTICLE XI REDEMPTION OF SECURITIES
	 	 	53
	Section 11.01
	 	Applicability of Article	 	 	53
	Section 11.02
	 	Election to Redeem; Notice to Trustee	 	 	53
	Section 11.03
	 	Selection by Trustee of Securities to Be Redeemed	 	 	53
	Section 11.04
	 	Notice of Redemption	 	 	54
	Section 11.05
	 	Deposit of Redemption Price	 	 	54
	Section 11.06
	 	Securities Payable on Redemption Date	 	 	55
	ARTICLE XII SINKING FUNDS
	 	 	55
	Section 12.01
	 	Applicability of Article	 	 	55
	Section 12.02
	 	Satisfaction of Sinking Fund Payments with Securities	 	 	55
	Section 12.03
	 	Redemption of Securities for Sinking Fund	 	 	56
	ARTICLE XIII DEFEASANCE AND COVENANT DEFEASANCE
	 	 	56
	Section 13.01
	 	Company’s Option to Effect Defeasance or Covenant Defeasance	 	 	56
	Section 13.02
	 	Defeasance and Discharge	 	 	56
	Section 13.03
	 	Covenant Defeasance	 	 	57
	Section 13.04
	 	Conditions to Defeasance or Covenant Defeasance	 	 	57
	Section 13.05
	 	Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions	 	 	59
	Section 13.06
	 	Reinstatement	 	 	59
	ARTICLE XIV CONVERSION OF SECURITIES
	 	 	60
	Section 14.01
	 	Applicability; Conversion Privilege and Conversion Price	 	 	60
	Section 14.02
	 	Exercise of Conversion Privilege	 	 	60
	Section 14.03
	 	Fractions of Shares	 	 	61
	Section 14.04
	 	Adjustment of Conversion Price	 	 	61
	Section 14.05
	 	Notice of Adjustments of Conversion Price	 	 	65
	Section 14.06
	 	Notice of Certain Corporate Action	 	 	65
	Section 14.07
	 	Company to Reserve Common Stock	 	 	66
	Section 14.08
	 	Taxes on Conversions	 	 	66






iv









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 
	 	 	 	 	 	Page
	 
	 	 	 	 	 
	Section 14.09
	 	Covenant as to Common Stock	 	 	67
	Section 14.10
	 	Cancellation of Converted Securities	 	 	67
	Section 14.11
	 	Provisions in Case of Consolidation, Merger or Sale of Assets	 	 	67
	Section 14.12
	 	Responsibility of Trustee	 	 	68
	ARTICLE XV SUBORDINATION OF SECURITIES
	 	 	68
	Section 15.01
	 	Securities Subordinate to Senior Indebtedness	 	 	68
	Section 15.02
	 	Payment Over of Proceeds Upon Dissolution, Etc	 	 	68
	Section 15.03
	 	Prior Payment to Senior Indebtedness Upon Acceleration of Securities	 	 	69
	Section 15.04
	 	No Payment When Senior Indebtedness in Default	 	 	70
	Section 15.05
	 	Payment Permitted If No Default	 	 	70
	Section 15.06
	 	Subrogation to Rights of Holders of Senior Indebtedness	 	 	70
	Section 15.07
	 	Provisions Solely to Define Relative Rights	 	 	71
	Section 15.08
	 	Trustee to Effectuate Subordination	 	 	71
	Section 15.09
	 	No Waiver of Subordination Provisions	 	 	71
	Section 15.10
	 	Notice to Trustee	 	 	71
	Section 15.11
	 	Reliance on Judicial Order or Certificate of Liquidating Agent	 	 	72
	Section 15.12
	 	Trustee Not Fiduciary for Holders of Senior Indebtedness	 	 	72
	Section 15.13
	 	Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee’s Rights	 	 	73
	Section 15.14
	 	Article Applicable to Paying Agents	 	 	73
	Section 15.15
	 	Certain Conversions Deemed Payment	 	 	73
	Section 15.16
	 	Trust Moneys Not Subordinated	 	 	73







v











 





     INDENTURE, dated as of                            , 20___, between PENSON
WORLDWIDE, INC., a Delaware corporation (herein called the “Company”), having its principal office
at 1700 Pacific Avenue, Suite 1400, Dallas, Texas 75201, and [TRUSTEE], as trustee (herein called
the “Trustee”).



RECITALS OF THE COMPANY




     The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured debentures, notes or other evidences of
indebtedness (herein called the “Securities”), to be issued in one or more series as in this
Indenture provided.



     All things necessary to make this Indenture a valid and legally binding agreement of the
Company, in accordance with its terms, have been done.



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



     For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:



ARTICLE I




DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION




     Section 1.01 Definitions.



     For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:



          (1) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;




          (2) all other terms used herein which are defined in the Trust Indenture Act, either directly
or by reference therein, have the meanings assigned to them therein;




          (3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with United States generally accepted accounting principles, and, except as otherwise
herein expressly provided, the term “generally accepted accounting principles” with respect to any
computation required or permitted hereunder shall mean such accounting principles as are generally
accepted at the date of such computation;




          (4) the words “Article” and “Section” refer to an Article and Section, respectively, of this
Indenture;




1









 








          (5) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other subdivision; and




          (6) certain terms used principally in Articles VI, X, and XIII, are defined in those Articles.




     “Act”, when used with respect to any Holder, has the meaning specified in Section 1.05.



     “Add On Securities” has the meaning specified in Section 3.01.



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.



     “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal or state law for the relief
of debtors.



     “Board of Directors” means either the board of directors of the Company or any duly authorized
committee of that board.



     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the Trustee.



     “Business Day”, when used with respect to any Place of Payment, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of
Payment are authorized or obligated by law or executive order to close.



     “Capital Lease Obligation” means, at any time any determination thereof is made, the amount of
the liability in respect of a capital lease that would at such time be so required to be
capitalized on the balance sheet in accordance with generally accepted accounting principles.



     “Commission” means the U.S. Securities and Exchange Commission, from time to time constituted,
created under the Exchange Act or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.



     “Common Stock” includes any stock of any class of the Company which has no preference in
respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the
Company. However, subject to the provisions of Section 3.01(21) and (22) and Section 14.11, shares
issuable on conversion of Securities shall include only shares of the class designated as Common
Stock of the Company at the date of this instrument or shares of any class or classes resulting
from any reclassification or reclassifications thereof and which



2









 







have no preference in respect of dividends or of amounts payable in the event of any voluntary
or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to
redemption by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such reclassifications.



     “Company” means the Person named as the “Company” in the first paragraph of this instrument
until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Person.



     “Company Request” or “Company Order” means a written request or order signed in the name of
the Company by its [Chairman of the Board, a Vice Chairman of the Board, its Chief Executive
Officer, its President, its Chief Operating Officer or a Vice President, and by its Chief Financial
Officer, Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary], and delivered
to the Trustee.



     “Constituent Person” has the meaning specified in Section 14.11.



     “Conversion Agent” means the transfer agent for the Company’s Common Stock, which as of the
date hereof is Continental Stock Transfer & Trust Co., or such other Person as the Company may name
from time to time.



     “Corporate Trust Office” means the principal office of the Trustee at which at any particular
time its corporate trust business shall be administered, which office as of the date hereof is
located at [ • ], Attn: [ • ], or such other address as the Trustee may designate from time to time
by notice to the Holders and the Company, or the principal corporate trust office of any successor
Trustee.



     “Corporation” means a corporation, association, company, joint-stock company or business
trust.



     “Covenant Defeasance” has the meaning specified in Section 13.03.



     “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.



     “Defaulted Interest” has the meaning specified in Section 3.07.



     “Defeasance” has the meaning specified in Section 13.02.



     “Defeasible Series” has the meaning specified in Section 13.01.



     “Depositary” means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depositary for such Securities as contemplated by Section 3.01.



     “Event of Default” has the meaning specified in Section 5.01.



3









 





     “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time,
and any statute successor thereto.



     “GAAP” means generally accepted accounting principles in the United States set forth in the
statements and pronouncements of the Financial Accounting Standards Board, and, to the extent not
superseded thereby, the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants or in such other statements by such other entity
as have been adopted by a significant segment of the accounting profession.



     “Global Security” means a Security that evidences all or part of the Securities of any series
and is authenticated and delivered to, and registered in the name of, the Depositary for such
Securities or a nominee thereof.



     “Guarantee” or “guarantee” by any Person means any obligation, contingent or otherwise, of
such Person guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, and including, without limitation, any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase property, securities or services for the purpose
of assuring the holder of such Indebtedness of the payment of such Indebtedness, or (iii) to
maintain working capital, equity capital or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness (and “Guaranteed”,
“Guaranteeing” and “Guarantor” shall have meanings correlative to the foregoing); provided,
however , that the Guarantee by any Person shall not include endorsements by such Person
for collection or deposit, in either case, in the ordinary course of business.



     “Hedging Obligations” means, with respect to any Person, the Obligations of such Person under
interest rate swap agreements, interest rate cap agreements, and interest rate collar agreements,
and other agreements or arrangements designed to protect such Person against fluctuations in
interest rates.



     “Holder” means a Person in whose name a Security is registered in the Security Register.



     “Indebtedness” means, with respect to any Person, any indebtedness of such Person, whether or
not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect thereof) or representing
Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property
or representing any Hedging Obligations, except any such balance that constitutes an accrued
expense or trade payable, and all deferrals, renewals, extensions and refundings of obligations of
any of the foregoing, if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, and also includes, to the extent not otherwise included, the
Guarantee of any indebtedness of such Person or any other Person.



4









 





     “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument, and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively. The term “Indenture”
shall also include the terms of particular series of Securities established as contemplated by
Section 3.01.



     “Interest”, when used with respect to an Original Issue Discount Security which by its terms
bears interest only at Maturity, means interest payable at Maturity.



     “Interest Payment Date” shall be defined by the terms of the Security established in
accordance with Section 3.01.



     “Maturity”, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.



     “Notice of Default” means a written notice of the kind specified in Section 6.05.



     “Obligations” means any principal, premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation governing any
Indebtedness.



     “Officer’s Certificate” means a certificate signed by the [Chairman of the Board, a Vice
Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Accounting Officer, a Vice President, the Chief Financial Officer, the Treasurer or an
Assistant Treasurer, the Secretary or an Assistant Secretary], of the Company, and delivered to the
Trustee.



     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company
and who shall be acceptable to the Trustee.



     “Original Issue Discount Security” means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.02.



     “Outstanding”, when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture, except:



          (1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;




          (2) Securities for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such Securities are




5









 







to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;




          (3) Securities as to which Defeasance has been effected pursuant to Section 13.02; and




          (4) Securities which have been paid pursuant to Section 3.06 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;



provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (A) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon acceleration of the
Maturity thereof to such date pursuant to Section 5.02, (B) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the U.S. dollar
equivalent, determined in the manner provided as contemplated by Section 3.01 on the date of
original issuance of such Security, of the principal amount (or, in the case of an Original Issue
Discount Security, the U.S. dollar equivalent on the date of original issuance of such Security of
the amount determined as provided in Clause (A) above) of such Security, and (C) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not
the Company or any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.




     “Paying Agent” means any Person authorized by the Company to pay the principal of or any
premium or interest on any Securities on behalf of the Company.



     “Person” means any individual, corporation, partnership, joint venture, limited liability
company, joint stock company, trust, unincorporated organization or government or any agency or
political subdivision thereof.



     “Place of Payment”, when used with respect to the Securities of any series, means the place or
places where the principal of and any premium and interest on the Securities of that series are
payable, as specified pursuant to Section 3.01.



     “Predecessor Security” of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 3.06 in



6









 







exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.



     “Prospectus” means a Prospectus of the Company relating to the offering from time to time of
the Securities.



     “Redemption Date”, when used with respect to any Security to be redeemed, means the date fixed
for such redemption by or pursuant to this Indenture.



     “Redemption Price”, when used with respect to any Security to be redeemed, means the price at
which it is to be redeemed pursuant to Article XI of this Indenture.



     “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 3.01.



     “Responsible Officer”, when used with respect to the Trustee, means any officer within the
corporate trust department of the Trustee, including any vice president, assistant vice president,
assistant treasurer, trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge
of and familiarity with the particular subject and who shall have direct responsibility for the
administration of this Indenture.



     “Securities” has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.



     “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.



     “Security Register” and “Security Registrar” have the respective meanings specified in Section
3.05.



     “Senior Indebtedness” means the principal of (and premium, if any), accrued interest
(including interest accruing on or after the filing in bankruptcy or reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and other amounts owing with respect to
all Indebtedness of the Company (including Indebtedness of others guaranteed by the Company) other
than the Securities, in any such case whether outstanding on the date of this Indenture or the date
Securities of any series are issued hereunder or thereafter created, incurred or assumed, unless in
any case in the instrument creating or evidencing any such Indebtedness or obligation or pursuant
to which the same is outstanding it is provided that such Indebtedness or obligation is not
superior in right of payment to the Securities, or it is provided that such obligation is
subordinated to senior indebtedness to substantially the same extent as the Securities are
subordinated to Senior Indebtedness.



7









 





     “Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” of the
Company within the meaning of clauses (1) and (2) of Rule 1-02(w) under Regulation S-X promulgated
by the Commission.



     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 3.07.



     “Stated Maturity”, when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable.



     “Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is
owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock”
means stock which ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of any contingency.



     “Trust Indenture Act” means the U.S. Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed; provided, however, that in the event the U.S.
Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent
required by any such amendment, the U.S. Trust Indenture Act of 1939 as so amended.



     “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to
the Securities of any series shall mean each Trustee with respect to Securities of that series.



     “U.S. Government Obligations” has the meaning specified in Section 13.04.



     Section 1.02 Compliance Certificates and Opinions.



     Upon any application or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act, together with an Officer’s Certificate
stating that all conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with. Each such certificate or opinion
shall be given in the form of an Officer’s Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.



     Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (including certificates provided for in Section 10.05) shall include:



8









 





          (1) a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;




          (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 each such individual, he or she has made such
examination or investigation as is necessary to enable him or her 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, in the opinion of each such individual, such condition or
covenant has been complied with.




     Section 1.03 Form of Documents Delivered to Trustee.



     In any case where several matters are required to be certified to by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.



     Any certificate or opinion of an officer of the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company or any Subsidiary of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.



     Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.



     Section 1.04 No Adverse Interpretation of Other Agreements. This Indenture may not be
used to interpret another indenture, loan or debt agreement of the Company or any Subsidiary of the
Company. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.



     Section 1.05 Acts of Holders; Record Dates.



     Any request, demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such Holders in
person or by agent duly appointed in writing; and, except as herein otherwise expressly provided,



9









 







such action shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of the Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.



     The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him or her the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact
and date of the execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee deems sufficient.



     The ownership of Securities shall be proved by the Security Register.



     Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made upon such Security.



     The Company may, in the circumstances permitted by the Trust Indenture Act, set any day as the
record date for the purpose of determining the Holders of Outstanding Securities of any series
entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given or taken by Holders of Securities
of such series. With regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date (or their duly appointed agents),
and only such Persons, shall be entitled to give or take the relevant action, whether or not such
Holders remain Holders after such record date. With regard to any action that may be given or
taken hereunder only by Holders of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration date after which no such action
purported to be given or taken by any Holder shall be effective hereunder unless given or taken on
or prior to such expiration date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents). On or prior to any
expiration date set pursuant to this paragraph, the Company may, on one or more occasions at its
option, extend such date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any such expiration date, any action
identical to, or, at any time, contrary to or different from, the action or purported action to
which such expiration date relates, in which event the Company may set a new record date in respect
thereof pursuant to this paragraph. Nothing in this paragraph shall be construed to render
ineffective any action taken at any time by the Holders (or their duly appointed agents) of the
requisite principal amount of Outstanding Securities of the



10









 







relevant series on the date such action is so taken. Notwithstanding the foregoing or the
Trust Indenture Act, the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration, request or direction referred
to in the next paragraph.



     The Trustee may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of
Default, (ii) any declaration of acceleration referred to in Section 5.02, if an Event of Default
with respect to Securities of such series has occurred and is continuing and the Trustee shall not
have given such a declaration to the Company, (iii) any request to institute proceedings referred
to in Section 5.07(2) or (iv) any direction referred to in Section 5.12, in each case with respect
to Securities of such series. Promptly after any record date is set pursuant to this paragraph,
the Trustee shall notify the Company and the Holders of Outstanding Series of such series of any
such record date so fixed and the proposed action. The Holders of Outstanding Securities of such
series on such record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that, unless such notice,
declaration, request or direction shall have become effective by virtue of Holders of the requisite
principal amount of Outstanding Securities of such series on such record date (or their duly
appointed agents) having joined therein on or prior to the 90th day after such record date, such
notice, declaration, request or direction shall automatically and without any action by any Person
be cancelled and of no further effect. Nothing in this paragraph shall be construed to prevent a
Holder (or a duly appointed agent thereof) from giving, before or after the expiration of such
90-day period, a notice, declaration, request or direction contrary to or different from, or, after
the expiration of such period, identical to, the notice, declaration, request or direction to which
such record date relates, in which event the Trustee may set a new record date in respect thereof
pursuant to this paragraph. Nothing in this paragraph shall be construed to render ineffective any
notice, declaration, request or direction of the type referred to in this paragraph given at any
time to the Trustee and the Company by Holders (or their duly appointed agents) of the requisite
principal amount of Outstanding Securities of the relevant series on the date such notice,
declaration, request or direction is so given.



     Without limiting the foregoing, a Holder entitled hereunder to give or take any action
hereunder with regard to any particular Security may do so with regard to all or any part of the
principal amount of such Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such principal amount.



     Section 1.06 Notices, Etc., to Trustee, Company.



     Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with:



          (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing (via facsimile or first class mail, postage
prepaid) to or with the Trustee at its Corporate Trust Office, or




11









 








          (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously furnished in writing to
the Trustee by the Company.




     Section 1.07 Notice to Holders; Waiver. Where this Indenture provides for notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and delivered electronically or mailed, first-class postage prepaid, to
each Holder affected by such event, at his or her address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such waiver shall be the
equivalent of the acknowledgement of receipt of such notice. Waivers of notice by Holders shall be
filed with the Trustee, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.



     Section 1.08 Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act
to be a part of and govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be. Wherever this Indenture refers to a provision of
the Trust Indenture Act, such provision is incorporated by reference in and made a part of this
Indenture.



     The following Trust Indenture Act terms used in this Indenture have the following meanings:



     “commission” means the Commission;



     “indenture securities” means the Securities;



     “indenture security holder” means a Holder;



     “indenture to be qualified” means this Indenture;



     “indenture trustee” or “institutional trustee” means the Trustee; and



     “obligor on the indenture securities” means the Company and any other obligor on the
Securities.



     All other Trust Indenture Act terms used in this Indenture that are defined by the Trust
Indenture Act, referenced to another statute or defined by any Commission Rule and not otherwise
defined herein have the meanings defined to them thereby.



12









 





     Section 1.09 Effect of Headings and Table of Contents. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.



     Section 1.10 Successors and Assigns. All covenants and agreements in this Indenture
by the Company shall bind its successors and assigns, whether so expressed or not.



     Section 1.11 Separability Clause. In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.



     Section 1.12 Benefits of Indenture. Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.



     Section 1.13 Governing Law. This Indenture and the Securities shall be governed by
and construed in accordance with the law of the State of New York, but without regard to principles
of conflicts of laws.



     Section 1.14 Legal Holidays. In any case where any Interest Payment Date, Redemption
Date or Stated Maturity of any Security or the last date on which a Holder has the right to convert
his or her Securities shall not be a Business Day at any Place of Payment, then (notwithstanding
any other provision of this Indenture or of the Securities (other than a provision of the
Securities of any series which specifically states that such provision shall apply in lieu of this
Section)) payment of interest or principal (and premium, if any) or conversion of the Securities
need not be made at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, or on such last day for conversion,
provided that no interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.



     Section 1.15 Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE
TRANSACTION CONTEMPLATED HEREBY.



     Section 1.16 Force Majeure. In no event shall the Trustee be responsible or liable
for any failure or delay in the performance of its obligations hereunder arising out of or caused
by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications
or computer (software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.



13









 





ARTICLE II




SECURITY FORMS




     Section 2.01 Forms Generally.



     The Securities of each series shall be in substantially the form set forth in this Article, or
in such other form as shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities, as evidenced by
their execution of the Securities. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall
be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 3.03 for the
authentication and delivery of such Securities.



     The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.



     Section 2.02 Form of Face of Security.



PENSON WORLDWIDE, INC.




			
	 	 	 
	No.                     
	 	$      
	 	 	 





     PENSON WORLDWIDE, INC., a Delaware corporation (herein called the “Company”, which term
includes any successor Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to                                                             , or registered assigns, the principal sum of        
                                                      Dollars on 
[, and to pay interest thereon from                                          or
from the most recent Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on                      and            in each year, commencing
           at the rate of            % per annum, until the principal hereof is
paid or made available for payment [, and at the rate of           % per annum on any
overdue principal and premium and on any overdue installment of interest]. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided
in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest,
which shall be the                      or            (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice



14









 







whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.] [The principal of this Security shall not bear
interest except in the case of a default in payment of principal upon acceleration, upon redemption
or at Stated Maturity, and in such case the overdue principal of this Security shall bear interest
at the rate of           % per annum, which shall accrue from the date of such default in
payment to the date payment of such principal has been made or duly provided for. Interest on any
overdue principal shall be payable on demand. Any such interest on any overdue principal that is
not so paid on demand shall bear interest at the rate of           % per annum, which
shall accrue from the date of such demand for payment to the date payment of such interest has been
made or duly provided for, and such interest shall also be payable on demand.]



     Payment of the principal of (and premium, if any) and [any such] interest on this Security
will be made at the office or agency of the Company maintained for that purpose in [ • ] , in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts[; provided, however , that at the option of the
Company payment of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register].



     Reference is hereby made to the further provisions of this Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.



     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.



     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.



Dated:




	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	Attest:

 	 
	
 	 
	 	 
	 	 
	 




15









 








     Section 2.03 Form of Reverse of Security.







     This Security is one of a duly authorized issue of securities of the Company (herein called
the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of
                               , ___ (herein called the “Indenture”), between the
Company and [TRUSTEE], as Trustee (herein called the “Trustee”, which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior Indebtedness and the
Holders of the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on the face hereof[,
limited in aggregate principal amount to $                    ].



     [Subject to and upon compliance with the provisions of the Indenture, the Holder of this
Security is entitled, at his or her option, at any time on or before the close of business on           ,
or in case this Security or a portion hereof is called for redemption, then in
respect of this Security or such portion hereof until and including, but (unless the Company
defaults in making the payment due upon redemption) not after, the close of business on the 10th
calendar day before the Redemption Date, to convert this Security (or any portion of the principal
amount hereof which is $[ • ] or an integral multiple thereof), at the principal amount hereof, or
of such portion, into fully paid and non-assessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Stock of the Company at a conversion price per share of Common
Stock equal to $            per each share of Common Stock (or at the current adjusted conversion price if an
adjustment has been made as provided in the Indenture) by surrender of this Security, duly endorsed
or assigned to the Company or in blank, to the Company at its office or agency in           ,
accompanied by written notice to the Company that the Holder hereof elects to convert
this Security, or if less than the entire principal amount hereof is to be converted, the portion
hereof to be converted, and, in case such surrender shall be made during the period from the close
of business on any Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (unless this Security or the portion thereof being converted
has been called for redemption on a Redemption Date within such period), also accompanied by
payment in funds acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being converted. Subject to
the aforesaid requirement for payment and, in the case of a conversion after the Regular Record
Date next preceding any Interest Payment Date and on or before such Interest Payment Date, to the
right of the Holder of this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an installment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made on conversion for interest accrued hereon or for dividends on
the Common Stock issued on conversion. No fractions of shares or scrip representing fractions of
shares will be issued on conversion, but instead of any fractional interest the Company shall pay a
cash adjustment as provided in the Indenture. The conversion price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the transfer of substantially all of
the assets of the Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be convertible thereafter, during the
period this Security shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger or transfer by a
holder of the number of shares of Common Stock into which this Security might have been converted
immediately prior to such consolidation,



16









 







merger or transfer (assuming such holder of Common Stock failed to exercise any rights of election
and received per share the kind and amount received per share by a plurality of non-electing
shares).]



     [The Securities of this series are subject to redemption upon not less than 30 days’ notice
delivered, [(1) on            in any year commencing with the year 20      
and ending with the year 20       through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after           ,
20     ], as a whole or in part, at the election of the Company, at
the following Redemption Prices (expressed as percentages of the principal amount): If redeemed
[on or before           ,      %, and if redeemed] during the 12-month
period beginning            of the years indicated,



	 	 	 	 	 	 	 
	Year
	 	Redemption Price
	 	Year
	 	Redemption Price
	 
	 	 
	 	 
	 	 
	 	 	 	 




and thereafter at a Redemption Price equal to           % of the principal amount,
together in the case of any such redemption [(whether through operation of the sinking fund or
otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the relevant Record
Dates referred to on the face hereof, all as provided in the Indenture.]




     [The Securities of this series are subject to redemption upon not less than 30 days’ notice
delivered, (1) on            in any year commencing with the year           
and ending with the year            through operation of the sinking fund for this
series at the Redemption Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at any time [on or after
          ], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed during the 12-month
period beginning            of the years indicated,



	 	 	 	 	 
	Year
	 	Redemption Price

for Redemption Through Operation

of the Sinking Fund
	 	Redemption Price

for Redemption

Otherwise Than Through

Operation of the Sinking Fund
	 
	 	 
	 	 
	 	 	 





and thereafter at a Redemption Price equal to           % of the principal amount,
together in the case of any such redemption (whether through operation of the sinking fund or
otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the relevant Record
Dates referred to on the face hereof, all as provided in the Indenture.]




17











 





     [Notwithstanding the foregoing, the Company may not, prior to                      redeem any
Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of,
or in anticipation of, any refunding operation by the application, directly or indirectly, of
moneys borrowed having an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than                     % per annum.]



     [The sinking fund for this series provides for the redemption on                      in
each year beginning with the year                      and ending with the year                      of
[not less than $                     (“mandatory sinking fund”) and not more than]
$                     aggregate principal amount
of Securities of this series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments [and Securities surrendered for
conversion] may be credited against subsequent [mandatory] sinking fund payments otherwise required
to be made.]



     [In the event of redemption of this Security in part only, a new Security or Securities of
this series and of like tenor for the unredeemed portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.]



     [In the event of conversion of this Security in part only, a new Security or Securities of
this series and of like tenor for the unconverted portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.]



     The indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all Senior
Indebtedness, and this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf to take action as may
be necessary or appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes.



     [The Indenture contains provisions for defeasance at any time of [(l) the entire indebtedness
of this Security or (2)] certain restrictive covenants and Events of Default with respect to this
Security, in each case upon compliance with certain conditions set forth in the Indenture.]



     [If an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.]



     [If an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture. Such amount shall be equal to [ • ].
Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any
overdue principal and overdue interest all of the Company’s obligations in respect of the payment
of the principal of and interest, if any, on the Securities of this series shall terminate.]



18









 





     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of a majority in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.



     As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of Default with respect to
the Securities of this series, the Holders of not less than a majority of the principal amount of
the Securities of this series at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates expressed herein [or
for enforcement of the right to convert this Security as provided in the Indenture].



     Subject to the rights of holders of Senior Indebtedness, as set forth in the Indenture, no
other reference herein to the Indenture and no other provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed or to convert this Security as provided in the
Indenture.



     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registerable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.



19









 





     The Securities of this series are issuable only in registered form without coupons in
denominations of $[ • ] and any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.



     No service charge shall be made for any such registration of transfer or exchange, but the
Company or the Security Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.



     Prior to due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.



     All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.



     [



[FORM OF CONVERSION NOTICE]



To: PENSON WORLDWIDE, INC.




     The undersigned owner of this Security hereby irrevocably exercises the option to convert this
Security, or portion hereof (which is $[ • ] or an integral multiple thereof) below designated,
into shares of Common Stock of PENSON WORLDWIDE, INC., in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and deliverable upon
the conversion, together with any payment for fractional shares and any Securities, representing
any unconverted principal amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of interest accompanies this
Security.



	 	 	 	 	 
	Dated:
	 	 	 	 
	 
	 	 	 	 
	Fill in for registration of shares of Common Stock and
Securities if to be
issued otherwise
than to the
registered holder.
 
	 	Principal Amount to be converted (in an integral multiple of $[ • ], if less than all): $
	 
	 	 	 





20









 






	 	 	 	 	 
	Name


	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Address


	 	 	 	 
	 
	 	 
	 
	 	Signature
	(Please print name
and address,
including zip code
number)
	 	 	 	 
	 
	 	 	 	 
	SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFYING NUMBER
	 	[SIGNATURE GUARANTEED required only if Common Stock and Securities are
to be issued and delivered to other than registered holder]
	 
	 	 	 	 
	[
	 	 	 	]
	 
	 	 





     Section 2.04 Form of Legend for Global Securities.



     Unless otherwise specified as contemplated by Section 3.01 for the Securities evidenced
thereby, every Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:



     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON
OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED
UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL
SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.



     Section 2.05 Form of Trustee’s Certificate of Authentication. The Trustee’s
certificate of authentication shall be in substantially the following form:



     This is one of the Securities of the series designated herein and referred to in the
within-mentioned Indenture.



21









 





	 	 	 	 	 
	 	[TRUSTEE],



as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 	Dated: 	 	 



ARTICLE III




THE SECURITIES





     Section 3.01 Amount Unlimited; Issuable in Series.



     The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.



     The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution and, subject to Section 3.03, set forth, or determined in the manner
provided, in an Officer’s Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series,



          (1) the title of the Securities of the series;




          (2) any limit upon the aggregate principal amount of the Securities of the series which may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the same
series pursuant to Section 3.04, 3.05, 3.06 or 9.06 and except for any Securities which, pursuant
to Section 3.03, are deemed never to have been authenticated and delivered hereunder);




          (3) the Person to whom any interest on a Security of the series shall be payable, if other
than the Person in whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest;




          (4) the date or dates on which the principal of the Securities of the series is payable;




          (5) the rate or rates at which the Securities of the series shall bear interest, if any, the
date or dates from which such interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest payable on any Interest
Payment Date;




          (6) the place or places where the principal of and any premium and interest on Securities of
the series shall be payable;




22









 








          (7) the period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or in part, at the option
of the Company and the applicability, nonapplicability or variation of Article XI with respect to
the Securities of such series;




          (8) the obligation, if any, of the Company to redeem or purchase Securities of the series
pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the terms and conditions upon
which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;




          (9) if other than denominations of $[ • ] and any integral multiple thereof, the denominations
in which Securities of the series shall be issuable;




          (10) the currency, currencies or currency units in which payment of the principal of and any
premium and interest on any Securities of the series shall be payable if other than the currency of
the United States of America and the manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the definition of “Outstanding” in Section 1.01;




          (11) if the amount of payments of principal of or any premium or interest on any Securities of
the series may be determined with reference to an index, the manner in which such amounts shall be
determined;




          (12) if the principal of or any premium or interest on any Securities of the series is to be
payable, at the election of the Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any premium and interest on
Securities of such series as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be made;




          (13) if and as applicable, that the Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances other than those set forth in
Section 3.05 in which any such Global Security may be transferred to, and registered and exchanged
for Securities registered in the name of, a Person other than the Depositary for such Global
Security or a nominee thereof and in which any such transfer may be registered;




          (14) any addition to or change in the Events of Default set forth in Section 5.01 which
applies to Securities of the series;




          (15) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.02;




23









 








          (16) any addition to or change in the covenants set forth in Article X which applies to
Securities of the series;




          (17) the applicability, nonapplicability, or variation of Article XII with respect to the
Securities of such Series;




          (18) if applicable, that the Securities of the series shall be subject to either or both of
Defeasance or Covenant Defeasance as provided in Article XIII; provided that no series of
Securities that is convertible into Common Stock as provided in Article XIV or convertible into or
exchangeable for any other securities pursuant to Section 3.01(21) shall be subject to Defeasance
pursuant to Section 13.02;




          (19) the terms and conditions, if any, pursuant to which the Securities are convertible into
Common Stock of the Company pursuant to Article XIV, and any variation thereof;




          (20) any addition to or change in the provisions of Article XV with respect to the Securities
of such series;




          (21) the terms and conditions, if any, pursuant to which the Securities are convertible into
or exchangeable for any other securities; and




          (22) any other terms of the series (which terms shall not be inconsistent with the provisions
of this Indenture, except as permitted by Section 9.01(5)).




     All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution referred to above
and, subject to Section 3.03, set forth, or determined in the manner provided, in the Officer’s
Certificate referred to above or in any such indenture supplemental hereto.



     If any of the terms of the series are established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of
the Officer’s Certificate setting forth the terms of the series.



     The Company may, from time to time, by adoption of a Board Resolution and subject to
compliance with any other applicable provisions of this Indenture, without the consent of the
Holders, create and issue pursuant to this Indenture additional securities of any series of
Securities (“Add On Securities”) having terms and conditions identical to those of such series of
Outstanding Securities, except that such Add On Securities:



               (A) may have a different issue date from such series of Outstanding Securities;



               (B) may have a different amount of interest payable on the first Interest Payment Date after
issuance than is payable on such series of Outstanding Securities; and



24









 





               (C) may have terms specified in such Board Resolution for such Add On Securities making
appropriate adjustments to this Article III applicable to such Add On Securities in order to
conform to and ensure compliance with the Securities Act (or applicable securities laws) which are
not adverse in any material respect to the Holder of any Outstanding Securities (other than such
Add On Securities) and which shall not affect the rights or duties of the Trustee.



     Section 3.02 Denominations. The Securities of each series shall be issuable only in
registered form without coupons in such denominations as shall be specified as contemplated by
Section 3.01. In the absence of any such specified denomination with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations of $[ • ] and any
integral multiple thereof.



     Section 3.03 Execution, Authentication, Delivery and Dating. The Securities shall be
executed on behalf of the Company by its [Chairman of the Board, its Vice Chairman of the Board,
its President, its Chief Operating Officer or one of its Vice Presidents attested by its Chief
Financial Officer, its Treasurer or an Assistant Treasurer, its Secretary or one of its Assistant
Secretaries]. The signature of any of these officers on the Securities may be manual or facsimile.



     Securities bearing the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.



     At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any Series executed by the Company, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in accordance with the
Company Order shall authenticate and deliver such Securities. If the form or terms of the
Securities of the series have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.01 and 3.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities, the Trustee shall
be provided with, and (subject to Section 6.01) shall be fully protected in relying upon, (a) a
copy of the resolution or resolutions of the Board of Directors in or pursuant to which the terms
and form of the Securities were established, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in full force and
effect as of the date of such certificate, and if the terms and form of such Securities are
established by an Officer’s Certificate pursuant to general authorization of the Board of
Directors, such Officer’s Certificate; (b) an executed supplemental indenture, if any; (c) an
Officer’s Certificate delivered in accordance with Section 1.02; and (d) an Opinion of Counsel
stating,



          (1) if the form of such Securities has been established by or pursuant to Board Resolution as
permitted by Section 2.01, that such form has been established in conformity with the provisions of
this Indenture;




25









 








          (2) if the terms of such Securities have been established by or pursuant to Board Resolution
as permitted by Section 3.01, that such terms have been established in conformity with the
provisions of this Indenture;




          (3) that such Securities, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights and to general
equity principles; and




          (4) that all laws and requirements in respect of the execution and delivery by the Company of
such Securities have been complied with.




     If such form or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.



     Notwithstanding the provisions of Section 3.01 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not be necessary to
deliver the Officer’s Certificate otherwise required pursuant to Section 3.01 or the Opinion of
Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be issued.



     Each Security shall be dated the date of its authentication.



     No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.09,
for all purposes of this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this Indenture.



     Section 3.04 Temporary Securities. Pending the preparation of definitive Securities
of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.



26









 





     If temporary Securities of any series are issued, the Company will cause definitive Securities
of that series to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Company in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or
more definitive Securities of the same series, of any authorized denominations and of a like
aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive Securities of such
series and tenor.



     Section 3.05 Registration, Registration of Transfer and Exchange. The Company shall
cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained
in such office and in any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration of Securities and
of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose
of registering Securities and transfers of Securities as herein provided.



     Upon surrender for registration of transfer of any Security of any series at the office or
agency in a Place of Payment for that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new
Securities of the same series, of any authorized denominations and of a like tenor and aggregate
principal amount.



     At the option of the Holder, Securities of any series may be exchanged for other Securities of
the same series, of any authorized denominations and of a like tenor and aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is entitled to
receive.



     All Securities issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of transfer or exchange.



     Every Security presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his or her attorney duly authorized in writing.



     No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company or Security Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 3.04 or 9.06 not involving any
transfer.



27









 





     The Company shall not be required (1) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Securities of that series selected for redemption
under Section 11.03 and ending at the close of business on the day of such mailing, or (2) to
register the transfer of or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.


The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:




     (1) Each Global Security authenticated under this Indenture shall be registered in the name
of the Depositary designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.



     (2) Notwithstanding any other provision in this Indenture, and subject to such applicable
provisions, if any, as may be specified as contemplated by Section 3.01, no Global Security may be
exchanged in whole or in part for Securities registered, and no transfer of a Global Security in
whole or in part may be registered, in the name of any Person other than the Depositary for such
Global Security or a nominee thereof unless (A) such Depositary has notified the Company that it is
unwilling or unable or no longer permitted under applicable law to continue as Depositary for such
Global Security and the Company has not appointed a successor within 90 days of receipt of such
notice or (B) there shall have occurred and be continuing an Event of Default with respect to such
Global Security or (C) the Company so directs the Trustee by Company Order or (D) there shall exist
such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for
this purpose as contemplated by Section 3.01.



     (3) Subject to Clause (2) above and to such applicable provisions, if any, as may be
specified as contemplated by Section 3.01, any exchange of a Global Security for other Securities
may be made in whole or in part, and all Securities issued in exchange for a Global Security or any
portion thereof shall be registered in such names as the Depositary for such Global Security shall
direct.



     (4) Every Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this
Section, Section 3.04, 3.06 or 9.06 or otherwise, shall be authenticated and delivered in the form
of, and shall be, a Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.



     Section 3.06 Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated
Security is surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series and of like tenor
and principal amount and bearing a number not contemporaneously outstanding.



     If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been acquired by a



28









 







bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously outstanding.



     In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
such Security.



     Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) in connection
therewith.



     Every new Security of any series issued pursuant to this Section in exchange for any mutilated
Security or in lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.



     The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities.



     Section 3.07 Payment of Interest; Interest Rights Preserved. Except as otherwise
provided as contemplated by Section 3.01 with respect to any series of Securities, interest on any
Security which is payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest.



     Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:



          (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest




29









 







which shall be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be delivered electronically or mailed,
first-class postage prepaid, to each Holder of Securities of such series at his or her address as
it appears in the Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor
having been so delivered or mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).




          (2) The Company may make payment of any Defaulted Interest on the Securities of any series in
any other lawful manner not inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the Trustee.




     Subject to the foregoing provisions of this Section, each Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.



     Subject to the provisions of Section 14.02, in the case of any Security which is converted
after any Regular Record Date and on or prior to the next succeeding Interest Payment Date,
interest whose Stated Maturity is on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not punctually paid or
duly provided for) shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on such Regular Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the case of any Security
which is converted, interest whose Stated Maturity is after the date of conversion of such Security
shall not be payable.



     Section 3.08 Persons Deemed Owners. Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and any premium and (subject to Section 3.07) any
interest on such Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.



     Section 3.09 Cancellation. All Securities surrendered for payment, redemption,
registration of transfer or exchange or conversion or for credit against any sinking fund payment
shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall
be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation



30









 







any Securities previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which
the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of by the Trustee in its customary
manner.



     Section 3.10 Computation of Interest. Except as otherwise specified as contemplated
by Section 3.01 for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.



     Section 3.11 CUSIP Numbers. The Company 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 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. The Company will promptly notify the Trustee of any
changes in the “CUSIP” numbers.



ARTICLE IV




SATISFACTION AND DISCHARGE




     Section 4.01 Satisfaction and Discharge of Indenture. This Indenture shall upon
Company Request cease to be of further effect (except as to any surviving rights of conversion,
registration of transfer or exchange of Securities herein expressly provided for), and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:



          (1) either:




               (A) all Securities theretofore authenticated and delivered (other than (i) Securities which
have been destroyed, lost or stolen and which have been replaced or paid as provided in Section
3.06 and (ii) Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company or discharged from
such trust) have been delivered to the Trustee for cancellation; or



               (B) all such Securities not theretofore delivered to the Trustee for cancellation;




	 	(i)	 	have become due and payable, or
	 
	 	(ii)	 	will become due and payable at
their Stated Maturity within one year, or




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	 	(iii)	 	are to be called for redemption
within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company,




and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;




          (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company;
and




          (3) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.




     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 6.06, and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under
Section 4.02, shall survive such satisfaction and discharge.



     Section 4.02 Application of Trust Money. All money deposited with the Trustee
pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and any premium and interest for whose payment
such money has been deposited with the Trustee. All money deposited with the Trustee pursuant to
Section 4.01 (and held by it or any Paying Agent) for payment of Securities of a series that is
convertible in accordance with Article XIV and that are subsequently converted, shall be returned
to the Company.



ARTICLE V




REMEDIES




     Section 5.01 Events of Default. “Event of Default”, wherever used herein with respect
to Securities of any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article XV or be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental body):



          (1) a default in any payment of interest on any Security of that series when due and payable
and such default continues for 30 days;




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          (2) a default in the payment of principal of any Security in that series when due and payable
at its Stated Maturity, upon optional redemption, upon required redemption or repurchase, upon
declaration of acceleration or otherwise;




          (3) a default in the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series;




          (4) (i) a default in the observance or performance of Article VIII or (ii) a default in the
observance or performance of any other covenant or agreement contained in this Indenture (other
than (a) those addressed in (1), (2) or (3) above, (b) the obligations under Section 7.04 hereof or
(c) any covenant or warranty a default in whose performance or whose breach has expressly been
included in this Indenture solely for the benefit of series of Securities other than that series)
which default under this clause (ii) continues for a period of 60 days after the Company receives
written notice specifying the default (and demanding that such default be remedied) from the
Trustee or the Holders of at least a majority of the principal amount of the Outstanding Securities
of that series;




          (5) the failure to pay at final stated maturity (giving effect to any applicable grace periods
and any extensions thereof) the principal amount of any Indebtedness of the Company, or the
acceleration of the final stated maturity of any such Indebtedness (which acceleration is not
rescinded, annulled or otherwise cured within 60 days of receipt by the Company of notice of any
such acceleration) if the aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated (in each case with respect to which the 60-day period
described above has elapsed), aggregates $[ • ] million or more at any time;




          (6) the Company 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;



               (D) makes a general assignment for the benefit of its creditors; or takes any comparable
action under any foreign laws relating to insolvency; or



               (E) takes any corporate action to authorize or effect any of the foregoing; or



          (7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law:




33









 








               (A) that is for relief against the Company or any Significant Subsidiary in an involuntary
case;



               (B) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial
part of its property; or



               (C) orders the winding up or liquidation of the Company or any Significant Subsidiary;


and such order or decree remains unstayed and in effect for [ • ] days.




     The Company 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 is, or with the giving of notice
or the lapse of time or both would become, an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.



     Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of
Default (other than an Event of Default specified in Section 5.01(6) or 5.01(7) with respect to the
Company) and with respect to Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than a majority of the
principal amount of the Outstanding Securities of that series may declare the principal amount (or,
if any of the Securities of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) and unpaid interest
of all of the Securities of that series to be due and payable immediately, by a notice in writing
to the Company (and to the Trustee if given by Holders), and upon any such declaration such
principal amount (or specified amount) shall become immediately due and payable. If an Event of
Default specified in Section 5.01(6) or 5.01(7) with respect to the Company with respect to
Securities of any series at the time Outstanding occurs, the principal amount of all the Securities
of that series (or, if any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in the terms thereof)
and unpaid interest shall automatically, and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.



     At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if



          (1) the Company has paid or deposited with the Trustee a sum sufficient to pay




               (A) all overdue interest on all Securities of that series,



               (B) the principal of (and premium, if any, on) any Securities of that series which have become
due otherwise than by such declaration of acceleration and any interest thereon at the rate or
rates prescribed therefor in such Securities,



34









 





               (C) to the extent that payment of such interest is lawful, interest upon overdue interest at
the rate or rates prescribed therefor in such Securities, and



               (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and



          (2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 5.13.



No such rescission or annulment shall affect any subsequent default or impair any right consequent
thereon.




     Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee. The
Company covenants that if:



          (1) default is made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or




          (2) default is made in the payment of the principal of (or premium, if any, on) any Security
at the Maturity thereof,



the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for principal and any premium
and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.




     If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee for an express trust, may institute a judicial proceeding for the collection of
the sum so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or other obligor upon the Securities of that series and
collect the monies adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Securities of that series, wherever situated.



     If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall
deem necessary to protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or
to enforce any other proper remedy.



     Section 5.04 Trustee May File Proofs of Claim. In case of any judicial proceeding
relative to the Company (or any other obligor upon the Securities), or any of the property or



35









 







creditors of the Company (or any other obligor upon the Securities), the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the Holders and the
Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by each Holder to make
such payments to the Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.06.



     No provision of this Indenture shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other
similar committee.



     Section 5.05 Trustee May Enforce Claims Without Possession of Securities. All rights
of action and claims under this Indenture or the Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.



     Section 5.06 Application of Money Collected. Any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal or any premium or
interest, upon presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:



     FIRST: To the payment of all amounts due the Trustee under Section 6.06;



     SECOND: To the payment of the amounts then due and unpaid for principal of and any premium
and interest on the Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and any premium and interest, respectively; and



     THIRD: To the Company.




36











 





     Section 5.07 Limitation on Suits. No Holder of any Security of any series shall have
any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or
for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:



          (1) such Holder has previously given written notice to the Trustee of a continuing Event of
Default with respect to the Securities of that series;




          (2) the Holders of not less than a majority of the principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to institute proceedings
in respect of such Event of Default in its own name as Trustee hereunder;




          (3) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to it
against the costs, expenses and liabilities to be incurred in compliance with such request;




          (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and




          (5) no direction inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities
of that series;



it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such Holders.




     Section 5.08 Unconditional Right of Holders to Receive Principal, Premium and Interest and
to Convert. Notwithstanding any other provision in this Indenture, but subject to Article XV,
the Holder of any Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 3.07) interest on such Security
on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on
the Redemption Date) and to convert such Security in accordance with Article XIV and to institute
suit for the enforcement of any such payment and right to convert, and such rights shall not be
impaired without the consent of such Holder.



     Section 5.09 Restoration of Rights and Remedies. If the Trustee or any Holder has
instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder, and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.



     Section 5.10 Rights and Remedies Cumulative. Except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the
last



37









 







paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.



     Section 5.11 Delay or Omission Not Waiver. No delay or omission of the Trustee or of
any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.



     Section 5.12 Control by Holders. The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such series, provided that:



          (1) such direction shall not be in conflict with any rule of law or with this Indenture;




          (2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction; and




          (3) subject to the provisions of Section 6.01, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers
of the Trustee, determine that the proceedings so directed would involve the Trustee in personal
liability.




     Section 5.13 Waiver of Past Defaults. The Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect to such series and its
consequences, except a default:



          (1) in the payment of the principal of or any premium or interest on any Security of such
series; or




          (2) in respect of a covenant or provision hereof which under Article IX cannot be modified or
amended without the consent of the Holder of each Outstanding Security of such series affected.




     Upon any such waiver, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.



     Section 5.14 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, suffered or



38









 







omitted by it as Trustee, a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs, including reasonable attorney’s
fees and expenses, against any such party litigant, having due regard to the merits and good faith
of the claims or defenses made by the party litigant; provided that this Section shall not
apply to any suit instituted by the Trustee, to any suit instituted by any Holders of the
Securities, or group of Holders of the Securities, holding in the aggregate more than 10% of
principal amount of the Outstanding Securities of any series, or to any suit instituted by any
Holder of the Outstanding Securities for the enforcement of the payment of principal of or any
premium or interest on any Outstanding Securities held by such Holder, on or after the respective
Stated Maturities expressed in such Outstanding Securities, and provided, further,
that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted by the Company or
the Trustee or, if applicable, in any suit for the enforcement of the right to convert any Security
in accordance with Article XIV.



     Section 5.15 Waiver of Usury, Stay or Extension Laws. The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, 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 Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.



ARTICLE VI




THE TRUSTEE




     The Trustee hereby accepts the trust imposed upon it by this Indenture and covenants and
agrees to perform the same, as herein expressed.



     Section 6.01 Duties of Trustee.



     (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.



     (b) Except during the continuance of an Event of Default:



          (1) The Trustee need perform only those duties as are specifically set forth in this Indenture
and no others, and no covenants or obligations shall be implied in or read into this Indenture.




          (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, but in the
case of any such certificates or opinions which by any provision hereof are




39









 







specifically required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the certificates and opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).




     (c) Notwithstanding anything to the contrary contained herein, the Trustee may not be relieved
from liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:



          (1) This paragraph does not limit the effect of paragraph (b) of this Section 6.01.




          (2) The Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts.




          (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 received from the Holders of a majority in principal
amount of the Outstanding Securities of any series pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the
Securities of such series.




     (d) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.



     (e) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (d) and (f) of this Section 6.01 and to the provisions of the Trust
Indenture Act.



     (f) The Trustee shall not be liable for interest on any assets received by it, except as the
Trustee may agree in writing with the Company. Assets held in trust by the Trustee need not be
segregated from other assets except to the extent required by law.



     Section 6.02 Rights of Trustee.



     Subject to Section 6.01:



     (a) The Trustee may rely conclusively and shall be protected in acting or refraining from
acting on any document (whether in its original or facsimile form) 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 any document.



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     (b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate
or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such certificate or opinion.



     (c) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, attorneys or independent contractors and the
Trustee will not be responsible for any misconduct or negligence on the part of any agent, attorney
or independent contractor appointed with due care by it hereunder.



     (d) The Trustee shall not be liable for any action taken, suffered, or omitted to be taken by
it in good faith and reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture.



     (e) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, note or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally or by agent or
attorney.



     (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Holders, pursuant to the
provisions of this Indenture, unless such Holders shall have offered to the Trustee security or
indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.



     (g) The Trustee may consult with counsel of its selection and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by the Trustee hereunder in good faith and in
reliance thereon.



     (h) The Trustee shall not be deemed to have notice of any Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Securities and this Indenture.



     (i) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.



     (j) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.



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     (k) The Trustee may request that the Company deliver a certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to
this Indenture.



     (l) Any request or direction of the Company mentioned herein shall be sufficiently evidenced
by a Company Request or Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution.



     Section 6.03 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 Company or
its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or
Security Registrar may do the same with like rights. However, the Trustee must comply with
Sections 6.09 and 6.10.



     Section 6.04 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 Company’s use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the Trustee’s
certificate of authentication, or the use or application of any funds received by a Paying Agent
other than the Trustee. The Trustee shall not be charged with knowledge of any Event of Default
under Sections 5.01(4) or (5) or of the identity of any Significant Subsidiary unless either (a) a
Responsible Officer shall have actual knowledge thereof or (b) the Trustee shall have received
notice thereof in accordance with Section 1.06 hereof from the Company or any Holder.



     Section 6.05 Notice of Default. If an Event of Default with respect to Securities of
any series occurs and is continuing and if it is known to the Trustee, the Trustee shall deliver to
each Holder of Securities of such series notice of the uncured Event of Default (hereinafter called
a “Notice of Default”) within the earlier of 90 days after such Event of Default occurs or 30 days
after it is known to a Responsible Officer. Except in the case of an Event of Default in payment
of principal (or premium, if any) of, or interest on, any Security (including payments pursuant to
the mandatory redemption provisions of such security, if any), the Trustee may withhold the notice
if and so long as a committee of Responsible Officers in good faith determines that withholding the
notice is in the interest of the Holders of Securities of such series.



     Section 6.06 Compensation and Indemnity. The Company shall pay to the Trustee from
time to time such compensation for its services as the Company and the Trustee shall from time to
time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses made by it, including costs of collection, in addition to
compensation for its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee’s agents, accountants, experts and counsel.



     The Company shall indemnify the Trustee against any and all loss, liability, claim, damage or
expense (including reasonable attorneys’ fees and expenses) incurred by or in connection with the
acceptance or administration of this trust and the performance of its duties



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hereunder, including the costs and expense of enforcing this Indenture against the Company
(including this Section 6.06) and defending itself against any claim (whether asserted by the
Company, any Holder or any other person) or liability in connection with the exercise or
performance of any of its rights, powers or duties hereunder. The Trustee shall notify the Company
of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof;
provided, however, that any failure so to notify the Company shall not relieve the
Company of its indemnity obligations hereunder. The Company may, subject to the approval of the
Trustee, defend the claim, and the Trustee shall provide reasonable cooperation at the Company’s
expense in the defense. The Trustee may have separate counsel and the Company shall pay the fees
and expenses of such counsel; provided, however, that the Company shall not be
required to pay such fees and expenses if it assumes the Trustee’s defense and, in the Trustee’s
reasonable judgment, there is no conflict of interest between the Company and such parties in
connection with such defense. The Company need not pay for any written settlement made without its
prior written consent, which consent will not be unreasonably delayed, conditioned or withheld.
The Company need not reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee’s own willful misconduct or negligence.



     To secure the Company’s payment obligations in this Section 6.06, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the Trustee other than
money or property held in trust to pay principal of and interest on particular Securities.



     The Company’s payment obligations pursuant to this Section 6.06 shall survive the satisfaction
or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy
law or the resignation or removal of the Trustee. Without prejudice to any other rights available
to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of an
Event of Default specified in Section 5.01(6) or (7), the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.



     The provisions of this Section shall survive the termination of this Indenture.



     Section 6.07 Replacement of Trustee. The Trustee may resign at any time with respect
to the Securities of one or more series by so notifying the Company in writing. The Holder or
Holders of a majority in principal amount of the Outstanding Securities of a series may remove the
Trustee with respect to Securities of such series by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with respect to Securities of such series with the
Company’s consent. The Company may remove the Trustee if:



          (1) the Trustee fails to comply with Section 6.09;




          (2) the Trustee is adjudged bankrupt or insolvent;




          (3) a receiver, custodian, or other public officer takes charge of the Trustee or its
property; or




          (4) the Trustee becomes incapable of acting.




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     With respect to the Securities of one or more series, if the Trustee resigns, is removed by
the Company or by the Holders of a majority in principal amount of the Outstanding Securities of
that series and such Holders do not reasonably promptly appoint a successor Trustee, 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 Company shall promptly appoint a successor Trustee, with
respect to Securities of that or those series.



     A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture with respect to such series of Securities. The successor Trustee
shall mail a notice of its succession to each Holder of Securities of that or those series. The
retiring Trustee shall (upon payment of its charges hereunder) promptly transfer all property held
by it as Trustee with respect to such series of Securities to the successor Trustee, subject to the
lien provided for in Section 6.06.



     If a successor Trustee with respect to a series of Securities does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee (at the Company’s
expense), the Company or the Holder or Holders of at least 10% in principal amount of the
Outstanding Securities of that series may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee with respect to such series.



     If the Trustee fails to comply with Section 6.09, unless the Trustee’s duty to resign is
stayed as provided in Trust Indenture Act Section 310(b), any Holder who has been a bona fide
holder of Securities of a series for at least six months may petition any court of competent
jurisdiction for the removal of the Trustee with respect to such series and the appointment of a
successor Trustee with respect to such series.



     Notwithstanding replacement of the Trustee pursuant to this Section 6.07, the Company’s
obligations under Section 6.06 shall continue for the benefit of the retiring Trustee.



     Section 6.08 Successor Trustee by Merger, Etc. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all of its corporate trust business to,
another corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, 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.



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     Section 6.09 Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of Trust Indenture Act Section 310(a)(1) and Trust Indenture Act Section
310(a)(5). 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 Trust
Indenture Act Section 310(b), subject to its right to apply for a stay of its duty to resign under
the penultimate paragraph of Trust Indenture Act Section 310(b); provided, however,
that there shall be excluded from the operation of Trust Indenture Act Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest or participation
in other securities of the Company are outstanding if the requirements for such exclusion set forth
in Trust Indenture Act Section 310(b)(1) are met.



     Section 6.10 Preferential Collection of Claims against Company. The Trustee shall
comply with Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust
Indenture Act Section 311(b). A Trustee who has resigned or been removed shall be subject to Trust
Indenture Act Section 311(a) to the extent indicated.



ARTICLE VII




HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY




     Section 7.01 Company to Furnish Trustee Names and Addresses of Holders.



     The Company will furnish or cause to be furnished to the Trustee:



          (1) semi-annually, not more than 15 days after each Regular Record Date, a list for each
series of Securities, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of such series as of the Regular Record Date, as the case
may be, and




          (2) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company of any such request, a list of similar form and content as of a date not
more than 15days prior to the time such list is furnished;



excluding from any such list names and addresses received by the Trustee in its capacity as
Security Registrar.




     Section 7.02 Preservation of Information; Communications to Holders. The Trustee
shall preserve, in as current a form as is reasonably practicable, the names and addresses of
Holders contained in the most recent list furnished to the Trustee as provided in Section 7.01 and
the names and addresses of Holders received by the Trustee in its capacity as Security Registrar.
The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new
list so furnished.



     The rights of the Holders to communicate with other Holders with respect to their rights under
this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided by the Trust Indenture Act.



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     Every Holder of Securities, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.



     Section 7.03 Reports by Trustee. As promptly as practicable but not later than 60
days after each May 15 beginning with the May 15 following the date of this Indenture, the Trustee
shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.



     A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee, in writing, when any Securities are listed on
any stock exchange or delisted therefrom.



     Section 7.04 Reports by Company. The Company shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to the Trust Indenture Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act shall be filed with the Trustee within 15 days after the same is filed with the
Commission. Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee’s receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information contained therein,
including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer’s Certificates).



ARTICLE VIII




CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE




     Section 8.01 Company May Merge, Etc., Only on Certain Terms.



     The Company may not, in a single transaction or a series of related transactions:



          (1) consolidate or merge with or into any other Person or permit any other Person to
consolidate or merge with or into the Company; or




          (2) directly or indirectly transfer, sell, lease or otherwise dispose of all or substantially
all of its assets.




     Notwithstanding clauses (1) and (2) above, the Company may take any actions set forth in such
clauses if:



          (1) the Company is the surviving corporation, orin a transaction in which the Company does not
survive or in which the Company sells, leases or otherwise disposes of all or substantially all of
its assets, the successor entity to the Company (A) is organized under the laws




46









 







of the United States or any State thereof or the District of Columbia, and (B) shall expressly
assume, by a supplemental indenture executed and delivered to the Trustee in a form reasonably
satisfactory to the Trustee, all of the Company’s obligations under the Securities and this
Indenture;




          (2) immediately before and after giving effect to such transaction, no Event of Default shall
have occurred and be continuing; and




          (3) the Company and the successor Person have delivered to the Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such consolidation, merger, conveyance,
lease, sale, disposition or transfer and such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction have been complied
with.




     Section 8.02 Successor Corporation Substituted. Upon any consolidation or merger or
any transfer or other disposition of assets in accordance with Section 8.01, the surviving Person
formed by such consolidation or into which the Company is merged or the successor Person to which
such transfer is made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such Person had been named as
the Company herein; provided that in the case of a lease of all or substantially all its
assets, the predecessor Company shall not be released from the obligation to pay the principal of
and interest on the Securities. When a surviving or successor Person duly assumes all of the
obligations of the Company pursuant hereto and pursuant to the Securities, except in the
circumstances described in the provision to the preceding sentence, the predecessor shall be
relieved of the performance and observance of all obligations and covenants of this Indenture and
the Securities, including but not limited to the obligation to make payment of the principal of
(and premium, if any) and interest on all the Securities then outstanding, and the Company may
thereupon or any time thereafter be liquidated and dissolved.



ARTICLE IX




SUPPLEMENTAL INDENTURES




     Section 9.01 Supplemental Indentures Without Consent of Holders. Without the consent
of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:



          (1) to evidence the succession of another Person to the Company and the assumption by any such
successor of the covenants of the Company herein and in the Securities;




          (2) to add to the covenants of the Company for the benefit of the Holders of all or any series
of Securities (and if such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the Company;




          (3) to add any additional Events of Default;




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          (4) to add to or change any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;




          (5) to add to, change or eliminate any of the provisions of this Indenture in respect of one
or more series of Securities, provided that any such addition, change or elimination (A)
shall neither (i) apply to any Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision nor (ii) adversely affect the
rights of the Holder of any such Security in any material respect or (B) shall become effective
only when there is no such Security Outstanding;




          (6) to secure the Securities;




          (7) to establish the form or terms of Securities of any series as permitted by Sections 2.01
and 3.01;




          (8) to comply with Section 8.01;




          (9) to permit or facilitate the issuance of uncertificated Securities in addition to or in
place of certificated Securities;




          (10) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.07;




          (11) to make provisions with respect to the conversion rights of Holders pursuant to the
requirements of Article XIV;




          (12) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein, or to make any other provisions with
respect to matters or questions arising under this Indenture, provided that such action
pursuant to this clause (12) shall not adversely affect the interests of the Holders of Securities
of any series in any material respect;




          (13) to conform any provision of this Indenture to the “Description of Debt Securities”
contained in the Prospectus or any similar provision contained in any supplement to the Prospectus
relating to an offering of debt securities under this Indenture; or




          (14) to comply with any requirements of the Trust Indenture Act of the requirements of the
Commission in connection with maintaining the qualification of this Indenture under the Trust
Indenture Act.




     Section 9.02 Supplemental Indentures with Consent of Holders. With the consent of the
Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of
said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may, at the Company’s expense, from time to time and at any



48









 







time, enter into an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such series under this
Indenture; provided, however, that no such supplemental indenture shall:



          (1) change the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal amount thereof or the rate of interest or any
premium payable upon the redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.02, or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or adversely affect the right to
convert any Security as provided in Article XIV, or modify the provisions of this Indenture with
respect to the ranking of the Securities in a manner adverse to the Holders;




          (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the
consent of whose Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this Indenture;




          (3) modify any of the provisions of this Section or Section 5.13, except to increase any such
percentage or to provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected thereby;




          (4) modify or change any provision of this Indenture or the related definitions affecting the
subordination or ranking of the Securities in a manner which adversely affects the Holders;




          (5) adversely affect any right of repayment or repurchase at the option of the Holder; or




          (6) reduce or postpone any sinking fund payment due hereunder.



A supplemental indenture which changes or eliminates any covenant or other provision of this
Indenture which has expressly been included solely for the benefit of one or more particular series
of Securities, or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.




     It shall not be necessary for any Act of Holders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof..



49









 





     Section 9.03 Execution of Supplemental Indentures. In executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall be given, and
(subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by this Indenture and
that all conditions precedent in the Indenture to the execution of the supplemental indenture have
been complied with. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.



     Section 9.04 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.



     Section 9.05 Conformity with Trust Indenture Act. Every supplemental indenture
executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.



     Section 9.06 Reference in Securities to Supplemental Indentures. Securities of any
series authenticated and delivered after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed by the Company,
and such new Securities may be authenticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.



ARTICLE X




COVENANTS




     Section 10.01 Payment of Securities. The Company covenants and agrees for the benefit
of each series of Securities that it will pay the principal of and interest on the Securities of
that series on the dates and in the manner provided in the Securities of that series and this
Indenture. An installment of principal, premium, if any, or interest on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders, on that date, immediately available
funds deposited and designated for and sufficient to pay the installment.



     The Company shall pay interest on overdue principal and on overdue installments of interest at
the rate specified in the Securities compounded semi-annually, to the extent lawful.



     Section 10.02 Maintenance of Office or Agency. The Company shall maintain in the
Place of Payment for any series of Securities an office or agency where Securities of that series
may be presented or surrendered for payment, where Securities of that series may be surrendered for
registration of transfer or exchange, where Securities of any series that is convertible may be



50









 







surrendered for conversion, and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and
demands.



     The Company may also from time to time designate one or more other offices or agencies where
the Securities of one or more series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any series for such
purposes. The Company shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency. The Company
hereby initially designates the Corporate Trust Office as such office of the Company.



     Section 10.03 Money for Securities Payments to Be Held in Trust. If the Company shall
at any time act as its own Paying Agent with respect to any series of Securities, it will, on or
before each due date of the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.



     Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, prior to each due date of the principal of or any premium or interest on any Securities of
that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held
as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.



     The Company will cause each Paying Agent for any series of Securities other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee and the Company, subject to the provisions of this Section, that such Paying Agent will:



          (1) Hold all sums held by it for the payment of the principal of, premium, if any, or interest
on Securities of such series for the benefit of the Persons entitled thereto until such sum shall
be paid to such Persons or otherwise disposed of as herein provided;



          (2) Give the Trustee written notice of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment of principal, premium, if any, or
interest; and




          (3) Any time during the continuance of such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held by such paying agent.




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     The Company may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.



     Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or any premium or interest on any Security of any series
and remaining unclaimed for two years after such principal, premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in New York City, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be repaid to the Company.



     Section 10.04 Corporate Existence. Subject to Article VIII, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and effect its corporate
existence in accordance with its organizational documents and its rights (charter and statutory)
and corporate franchises; provided , however , that the Company shall not be
required to preserve any right or franchise, if (a) the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of the business of
the Company and (b) the loss thereof is not disadvantageous in any material respect to the Holders.



     Section 10.05 Compliance Certificate; Notice of Default.



     (a) The Company shall deliver to the Trustee annually an Officer’s Certificate complying with
Section 314(a)(4) of the Trust Indenture Act and stating that, as to each such officer signing such
certificate, whether or not the signer knows of any failure by the Company or any Subsidiary of the
Company to comply with any conditions or covenants in this Indenture and, if such signer does know
of such a failure to comply, the certificate shall describe such failure with particularity. The
Officer’s Certificate shall also notify the Trustee should the relevant fiscal year end on any date
other than the current fiscal year end date.



     (b) The Company shall, so long as any of the Securities of any series are outstanding, deliver
to the Trustee, within 30 days after becoming aware of any Event of Default with respect to such
series under this Indenture, an Officer’s Certificate specifying such Event of Default and what
action the Company is taking or propose to take with respect thereto. The Trustee shall not be
deemed to have knowledge of an Event of Default unless one of its Responsible Officers receives
notice of the Event of Default from the Company or any of the Holders.



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ARTICLE XI




REDEMPTION OF SECURITIES




     Section 11.01 Applicability of Article. Securities of any series which are redeemable
before their Stated Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.01 for Securities of any series) in accordance
with this Article.



     Section 11.02 Election to Redeem; Notice to Trustee. The election of the Company to
redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities of any series, the Company shall, at least
45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount
of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to
be redeemed. In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officer’s Certificate evidencing
compliance with such restriction.



     Section 11.03 Selection by Trustee of Securities to Be Redeemed. If less than all the
Securities of any series are to be redeemed (unless all of the Securities of such series and of a
specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Depositary from the Outstanding Securities of
such series not previously called for redemption, by such method as the Depositary shall deem
appropriate and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series. If less than all of the Securities of such
series and of a specified tenor are to be redeemed, the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Depositary from the
Outstanding Securities of such series and specified tenor not previously called for redemption in
accordance with the preceding sentence.



     If any Security selected for partial redemption is converted in part before termination of the
conversion right with respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be redeemed shall be
treated by the Depositary as Outstanding for the purpose of such selection.



     The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.



     For all purposes of this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to



53









 







be redeemed only in part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.



     Section 11.04 Notice of Redemption. Notice of redemption shall be delivered
electronically or by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his or her
address appearing in the Security Register.



     All notices of redemption shall state:



          (1) the Redemption Date;




          (2) the Redemption Price;




          (3) if less than all the Outstanding Securities of any series are to be redeemed, the
identification (and, in the case of partial redemption of any Securities, the principal amount) of
the particular Securities to be redeemed;




          (4) that on the Redemption Date the Redemption Price will become due and payable upon each
such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and
after said date;




          (5) in the case of any Securities that are convertible pursuant to Article XIV, the conversion
price or rate, the date on which the right to convert the principal of the Securities to be
redeemed will terminate and the place or places where such Securities may be surrendered for
conversion;




          (6) the place or places where such Securities are to be surrendered for payment of the
Redemption Price;




          (7) that the redemption is for a sinking fund, if such is the case; and




          (8) applicable CUSIP Numbers.




     Notice of redemption of Securities to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s request and with the notice information provided to the
Trustee, by the Trustee in the name and at the expense of the Company and shall be irrevocable;
provided, in the latter case, the Company will give the Trustee at least ten days’ prior
notice of the date of the giving of the notice (unless a shorter notice shall be satisfactory to
the Trustee). Notice of redemption of Securities to be redeemed at the election of the Company
received by the Trustee shall be given by the Trustee to each Paying Agent in the name of and at
the expense of the Company.



     Section 11.05 Deposit of Redemption Price. On or prior to 10:00 a.m. New York City
time on the Redemption Date, the Company shall 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 as provided in
Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the



54









 







Securities which are to be redeemed on that date other than any Securities called for
redemption on that date which have been converted prior to the date of such deposit.



     If any Security called for redemption is converted, any money deposited with the Trustee or
with any Paying Agent or so segregated and held in trust for the redemption of such Security shall
(subject to any right of the Holder of such Security or any Predecessor Security to receive
interest as provided in the last paragraph of Section 3.07) be paid to the Company upon Company
Request or, if then held by the Company, shall be discharged from such trust.



     Section 11.06 Securities Payable on Redemption Date. Notice of redemption having been
given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date (unless the Company
shall default in the payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that, unless otherwise
specified as contemplated by Section 3.01, installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 3.07.



     If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date
at the rate prescribed therefor in the Security.



ARTICLE XII




SINKING FUNDS




     Section 12.01 Applicability of Article. The provisions of this Article shall be
applicable to any sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 3.01 for Securities of such series.



     The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.02.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.



     Section 12.02 Satisfaction of Sinking Fund Payments with Securities. The Company (1)
may deliver Outstanding Securities of a series (other than any Securities previously called for
redemption) and (2) may apply as a credit Securities of a series which have been converted pursuant
to Article XIV or which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in satisfaction of all or any



55









 







part of any sinking fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.



     Section 12.03 Redemption of Securities for Sinking Fund. Not less than 45 days prior
to each sinking fund payment date for any series of Securities, the Company will deliver to the
Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 12.02, and will also deliver
to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.03 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided in Section 11.04.
Such notice having been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Section 11.06.



ARTICLE XIII




DEFEASANCE AND COVENANT DEFEASANCE




     Section 13.01 Company’s Option to Effect Defeasance or Covenant Defeasance. The
Company may elect, at its option by Board Resolution at any time, to have either Section 13.02 or
Section 13.03 applied to the Outstanding Securities of any series designated pursuant to Section
3.01 as being defeasible pursuant to this Article XIII (hereinafter called a “Defeasible Series”),
upon compliance with the conditions set forth below in this Article XIII; provided that
Section 13.02 shall not apply to any series of Securities that is convertible into Common Stock as
provided in Article XIV or convertible into or exchangeable for any other securities pursuant to
Section 3.01(21).



     Section 13.02 Defeasance and Discharge. Upon the Company’s exercise of the option
provided in Section 13.01 to have this Section 13.02 applied to the Outstanding Securities of any
Defeasible Series, the Company shall be deemed to have been discharged from its obligations, with
respect to the Outstanding Securities of such series, as provided in this Section on and after the
date the conditions set forth in Section 13.04 are satisfied (hereinafter called “Defeasance”), and
the Trustee shall execute appropriate instruments of satisfaction, discharge and release provided
to it by the Company. For this purpose, such Defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the Outstanding Securities of such
series and to have satisfied all its other obligations under the Securities of such series and this
Indenture (and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until otherwise terminated or
discharged hereunder: (1) the rights of Holders of Securities of such series to receive, solely
from the trust fund described in Section 13.04 and as more fully set forth in such Section,
payments in respect of the principal of and any premium and interest on such



56









 







Securities of such series when payments are due, (2) the Company’s obligations with respect to
the Securities of such series under Sections 3.04, 3.05, 3.06, 10.02 and 10.03, (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article XIII. Subject
to compliance with this Article XIII, the Company may exercise its option provided in Section 13.01
to have this Section 13.02 applied to the Outstanding Securities of any Defeasible Series
notwithstanding the prior exercise of its option provided in Section 13.01 to have Section 13.03
applied to the Outstanding Securities of such series.



     Section 13.03 Covenant Defeasance. Upon the Company’s exercise of the option provided
in Section 13.01 to have this Section 13.03 applied to the Outstanding Securities of any Defeasible
Series, (1) the Company shall be released from its obligations under Section 7.04 and Section 8.01
and Section 10.04, and (2) the occurrence of any event specified in Sections 5.01(3), 5.01(4) (with
respect to any of Sections 8.01 and 10.04) and 5.01(5) shall be deemed not to be or result in an
Event of Default (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to the extent so
specified in the case of Section 5.01(4)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this Indenture and the
Securities of such series shall be unaffected thereby.



     Section 13.04 Conditions to Defeasance or Covenant Defeasance. The following shall be
the conditions to application of either Section 13.02 or Section 13.03 to the Outstanding
Securities of any Defeasible Series:



          (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee
(or another trustee that satisfies the requirements contemplated by Section 6.09 and agrees to
comply with the provisions of this Article XIII applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of Outstanding Securities of such series, (A) money in an
amount, or (B) U.S. Government Obligations that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge,
the principal of and any premium and interest on the Securities of such series on the respective
Stated Maturities, in accordance with the terms of this Indenture and the Securities of such
series. As used herein, “U.S. Government Obligation” means (x) any security that is (i) a direct
obligation of the United States of America for the payment of which full faith and credit of the
United States of America is pledged or (ii) an obligation of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer
thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation specified in Clause (x)
and held by such custodian for the account of the holder of such depositary receipt, or with




57









 







respect to any specific payment of principal of or interest on any such U.S. Government
Obligation, provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the specific payment of
principal or interest evidenced by such depositary receipt.




          (2) In the case of an election under Section 13.02, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date first set forth
hereinabove, there has been a change in the applicable Federal income tax law, in either case (A)
or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of the
Outstanding Securities of such series will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be effected with respect to the
Securities of such series and will be subject to Federal income tax on the same amount, in the same
manner and at the same times as would be the case if such deposit, Defeasance and discharge were
not to occur.




          (3) In the case of an election under Section 13.03, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such
series will not recognize gain or loss for Federal income tax purposes as a result of the deposit
and Covenant Defeasance to be effected with respect to the Securities of such series and will be
subject to Federal income tax on the same amount, in the same manner and at the same times as would
be the case if such deposit and Covenant Defeasance were not to occur.




          (4) After giving pro forma effect to such Defeasance or Covenant Defeasance, no Event of
Default or event that (after notice or lapse of time or both) would become an Event of Default
shall have occurred and be continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 5.01(6) and (7), at any time on or prior to the
90th day after the date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).




          (5) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act, assuming all Securities of a series were in
default within the meaning of the Trust Indenture Act.




          (6) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the Company is a party or by
which it is bound.




          (7) The Company shall have delivered to the Trustee an Opinion of Counsel to the effect that
any trust resulting from the deposit does not require registration under the U.S. Investment
Company Act of 1940, as amended.




          (8) No event or condition shall exist that, pursuant to the provisions of Article XIII, would
prevent the Company from making payments of the principal of (and any premium) or interest on the
Securities of such series on the date of such deposit or at any time on or prior to




58









 







the 90th day after the date of such deposit (it being understood that this condition shall not
be deemed satisfied until such 90th day shall have ended).




          (9) The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.




     Section 13.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.



     All money and U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes of this Section and Section 13.06, the
Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to
Section 13.04 in respect of the Securities of any Defeasible Series shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Securities of such series and this
Indenture, to the payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of Securities of such
series, of all sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds except to the extent
required by law.



     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to Section 13.04 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
that by law is for the account of the Holders of Outstanding Securities.



     Anything in this Article XIII to the contrary notwithstanding, the Trustee shall deliver or
pay to the Company from time to time upon Company Request any money or U.S. Government Obligations
held by it as provided in Section 13.04 with respect to Securities of any Defeasible Series that,
in the opinion of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Defeasance or Covenant Defeasance
with respect to the Securities of such series.



     Section 13.06 Reinstatement. If the Trustee or the Paying Agent is unable to apply
any money in accordance with this Article XIII with respect to the Securities of any series by
reason of any order or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company’s obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article XIII with respect to Securities of such series until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 13.05
with respect to Securities of such series in accordance with this Article XIII; provided,
however, that if the Company makes any payment of principal of or any premium or interest
on any Security of such series following the reinstatement of its obligations, the Company, as the
case may be, shall be subrogated to the rights of the Holders of Securities of such series to
receive such payment from the money so held in trust.




59











 





ARTICLE XIV




CONVERSION OF SECURITIES




     Section 14.01 Applicability; Conversion Privilege and Conversion Price. Securities of
any series which are convertible into Common Stock of the Company shall be convertible in
accordance with their terms and (except as otherwise specified as contemplated by Section 3.01 for
Securities of any series) in accordance with this Article.



     Subject to and upon compliance with the provisions of this Article, at the option of the
Holder thereof, any Security or any portion of the outstanding principal amount thereof which is $[
• ] or an integral multiple of $[ • ] may, at the times specified for conversion as hereinafter
provided, be converted at the principal amount thereof, or of such portion thereof, into fully paid
and nonassessable shares (calculated as to each conversion to the nearest 1/10,000 of a share) of
Common Stock of the Company at the conversion price, determined as hereinafter provided, in effect
at the time of conversion. Such conversion right shall expire at the close of business on the date
specified for Securities of such series. In case a Security or portion thereof is called for
redemption at the election of the Company, such conversion right in respect of the Security or
portion so called shall expire at the close of business on the 10th calendar day before the
Redemption Date, unless the Company defaults in making the payment due upon redemption.



     The price at which shares of Common Stock shall be delivered upon conversion (herein called
the “conversion price”) shall be the price specified in relation to Securities of such series
pursuant to Section 3.01, as it shall be adjusted in certain instances as provided in this Article.
The time or times at which Securities of a series shall be convertible shall be as specified for
such series pursuant to Section 3.01.



     Section 14.02 Exercise of Conversion Privilege. In order to exercise the conversion
privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed
or assigned to the Company or in blank, at any office or agency of the Company maintained for that
purpose pursuant to Section 10.02, accompanied by written notice to the Company (which shall be
substantially in the form set forth in Section 2.03) at such office or agency that the Holder
elects to convert such Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for conversion during the
period from the close of business on any Regular Record Date next preceding any Interest Payment
Date to the close of business on such Interest Payment Date shall (except in the case of Securities
or portions thereof which have been called for redemption on a Redemption Date within such period)
be accompanied by payment in funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of Securities being surrendered for
conversion. Subject to the provisions of Section 3.07 relating to the payment of Defaulted
Interest by the Company, the interest payment with respect to a Security called for redemption on a
Redemption Date during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall
be payable on such Interest Payment Date to the Holder of such Security at the close of business on
such Regular Record Date notwithstanding the conversion of such Security after such Regular Record
Date and prior to such Interest Payment Date, and the Holder converting such Security need not
include a payment



60









 







of such interest payment amount upon surrender of such Security for conversion. Except as
provided in the preceding sentence and subject to the final paragraph of Section 3.07, no payment
or adjustment shall be made upon any conversion on account of any interest accrued on the
Securities surrendered for conversion or on account of any dividends on the Common Stock issued
upon conversion.



     Securities shall be deemed to have been converted immediately prior to the close of business
on the day of surrender of such Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon conversion shall be
treated for all purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the Company shall issue and shall deliver
at such office or agency a certificate or certificates for the number of full shares of Common
Stock issuable upon conversion, together with payment in lieu of any fraction of a share, as
provided in Section 14.03.



     Section 14.03 Fractions of Shares. No fractional shares of Common Stock shall be
issued upon conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of any fractional share of
Common Stock which would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect of such fraction in
an amount equal to the same fraction of the daily closing price per share of Common Stock
(consistent with Section 14.04(6) below) at the close of business on the day of conversion.



     Section 14.04 Adjustment of Conversion Price.



          (1) In case the Company shall pay or make a dividend or other distribution on any class of
capital stock of the Company in Common Stock, the conversion price in effect at the opening of
business on the day following the date fixed for determination of stockholders entitled to receive
such dividend or other distribution shall be reduced by multiplying such conversion price by a
fraction of which the numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the denominator shall be the sum of
such number of shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. If, after any such date fixed for
determination, any dividend or distribution is not in fact paid, the conversion price shall be
immediately readjusted, effective as of the date the Board of Directors determines not to pay such
dividend or distribution, to the conversion price that would have been in effect if such
determination date had not been fixed. For the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall not include shares held in the treasury of the
Company but shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.




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          (2) In case the Company shall issue rights, options or warrants to all holders of its Common
Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less
than the current market price per share (determined as provided in paragraph (6) of this Section)
of the Common Stock on the date fixed for the determination of stockholders entitled to receive
such rights, options or warrants (other than pursuant to a dividend reinvestment plan), the
conversion price in effect at the opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock that the aggregate of
the offering price of the total number of shares of Common Stock so offered for subscription or
purchase would purchase at such current market price and the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for subscription or purchase,
such reduction to become effective immediately after the opening of business on the day following
the date fixed for such determination. If, after any such date fixed for such determination, any
such rights, options or warrants are not in fact issued, or are not exercised prior to the
expiration thereof, the conversion price shall be immediately readjusted, effective as of the date
such rights, options or warrants expire, or the date the Board of Directors determines not to issue
any such rights, options or warrants, to the conversion price that would have been in effect if the
unexercised rights, options or warrants had never been granted or such determination date had not
been fixed, as the case may be. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.




          (3) In case outstanding shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be proportionately reduced,
and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such subdivision or combination
becomes effective.




          (4) In case the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock evidences of its indebtedness, shares of any class of capital stock or rights, options
or warrants to subscribe for or purchase shares of any class of capital stock (other than any
rights, options or warrants that by their terms will also be issued to any Holder upon conversion
of a Security of such series into shares of Common Stock without any action required by the Company
or any other Person) or other property (including cash or assets or securities, but excluding (i)
any rights, options or warrants referred to in paragraph (2) of this Section, (ii) any dividend or
distribution paid exclusively in cash, (iii) any dividend or distribution referred to in paragraph
(1) of this Section and (iv) any consideration distributed in any merger or consolidation to which
Section 14.11 applies, the conversion price shall be



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adjusted so that the same shall equal the price determined by multiplying the conversion price
in effect immediately prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the numerator shall be
the current market price per share (determined as provided in paragraph (6) of this Section) of the
Common Stock on the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive and described in a
Board Resolution delivered to the Trustee) of the portion of the assets, shares or evidences of
indebtedness so distributed applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such adjustment to become effective
immediately prior to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. If, after any such date fixed
for determination, any such distribution is not in fact made, the conversion price shall be
immediately readjusted effective as of the date that the Board of Directors determines not to make
such distribution, to the conversion price that would have been in effect if such determination
date had not been fixed. In the event the then fair market value (as so determined) of the portion
of the evidences of indebtedness, shares of any class of capital stock or other property so
distributed is equal to or greater than the current market price per share of the Common Stock on
such date, in lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder of a Security shall have the right to receive upon conversion the amount of such evidences
of indebtedness, shares of any class of capital stock or other property such Holder would have
received had such Holder converted each Security on such date.




          (5) The reclassification of Common Stock into securities other than Common Stock (other than
any reclassification upon a consolidation or merger to which Section 14.11 applies) shall be deemed
to involve (a) a distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be “the date fixed for
the determination of stockholders entitled to receive such distribution” and “the date fixed for
such determination” within the meaning of paragraph (4) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall be deemed to be “the day upon
which such subdivision becomes effective” or “the day upon which such combination becomes
effective”, as the case may be, and “the day upon which such subdivision or combination becomes
effective” within the meaning of paragraph (3) of this Section).




          (6) For the purpose of any computation under paragraphs (2) and (4) of this Section, the
current market price per share of Common Stock on any day shall be deemed to be the average of the
daily closing prices for the five consecutive trading days (i.e ., Business Days on which
the Common Stock is traded) selected by the Board of Directors commencing not more than 20 trading
days before, and ending not later than, the earlier of the day in question and the day before the
“ex” date with respect to the issuance or distribution requiring such computation. For this
purpose, the term “ex” date, when used with respect to any issuance or distribution, shall mean the
first date on which the Common Stock trades regular way on the applicable exchange or in the
applicable market without the right to receive such issuance or distribution. The closing price
for each day shall be the reported last sale price (or, in case no such reported sale takes place
on such day, the average of the reported closing bid and asked prices) on such date as



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reported in composite transactions for the principal national securities on which the Common
Stock is then listed or admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm selected from time
to time by the Board of Directors for that purpose or in the absence of any such quotations, as
determined by the Board of Directors in good faith.




          (7) The Company may make such reductions in the conversion price, in addition to those
required by paragraphs (1), (2), (3) and (4) of this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from
any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax purposes or for any other reasons. The
Company shall have the power to resolve any ambiguity or correct any error pursuant to this section
and its actions in so doing shall be final and conclusive.




          (8) The Company may make such decreases to the conversion price, for the remaining term of the
securities of a series that is convertible or any shorter term, in addition to those required by
paragraphs (1), (2), (3), and (4) of this section as it considers to be advisable in order to avoid
or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from
any event treated as such for income tax purposes.




          (9) No adjustment in the conversion price shall be required unless such adjustment would
require an increase or decrease of at least one percent in such conversion price; provided,
however, that any adjustment which by reason of this paragraph (9) is not required to be
made shall be carried forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest cent or to the nearest 1/10,000 of a
share, as the case may be.




          (10) To the extent permitted by applicable law, the Company from time to time may decrease the
conversion price by any amount for any period of time of at least 20 days, the decrease being
irrevocable during such period, provided the Board of Directors shall have made a determination
that such decrease would be in the best interests of the Company, which determination shall be
conclusive. Whenever the conversion price is decreased pursuant to the preceding sentence, the
Company shall prepare a certificate signed by the Treasurer or other appropriate officer of the
Company stating the decreased conversion price and the period during which it will be in effect,
and such certificate shall be delivered to the Trustee and with the Conversion Agent at such office
or agency maintained for the purpose of conversion of securities pursuant to Section 10.02 at least
15 days prior to the date the decreased conversion price takes effect.




          (11) There shall be no adjustment to the conversion price [upon the issuance of rights under
the Company’s rights agreement dated as of [ • ], or] upon issuance of rights pursuant to a rights
agreement hereafter adopted that is an amendment, renewal or replacement thereof, prior to such
rights being separated from the Common Stock. If Holders of the Securities of a series that is
convertible exercise the right of conversion prior to the rights trading separately from the Common
Stock, such Holders shall receive rights in addition to the Common



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Stock upon conversion of such Securities. If Holders of the Securities of a series that is
convertible exercise the right of conversion after the date the rights issued under the Company’s
rights agreement separate from the underlying Common Stock, such Holders shall be entitled to
receive the rights that would otherwise be attributable to the shares of Common Stock received upon
conversion and the conversion rate, in such case, will be adjusted as though such rights were being
distributed to holders of Common Stock on the date of such separation. If such an adjustment is
made and such rights are later redeemed, invalidated or terminated, then a corresponding reversing
adjustment will be made to the conversion rate on an equitable basis.




     Section 14.05 Notice of Adjustments of Conversion Price.



     Whenever the conversion price is adjusted as herein provided:



     (a) the Company shall compute the adjusted conversion price in accordance with Section 14.04
and shall prepare a certificate signed by the Treasurer or other appropriate officer of the Company
setting forth the adjusted conversion price and showing in reasonable detail the facts upon which
such adjustment is based, and such certificate shall promptly be delivered to the Trustee and the
Conversion Agent at each office or agency maintained for the purpose of conversion of Securities
pursuant to Section 10.02; and



     (b) a notice stating that the conversion price has been adjusted and setting forth the
adjusted conversion price shall be required, and as soon as practicable after it is required, such
notice shall be delivered electronically or mailed by the Company to all Holders at their last
addresses as they shall appear in the Security Register.



     Section 14.06 Notice of Certain Corporate Action.



     In case:



     (a) the Company shall declare a dividend (or any other distribution) on its Common Stock
payable otherwise than in cash; or



     (b) the Company shall authorize the granting to all holders of its Common Stock of rights or
warrants to subscribe for or purchase any shares of capital stock of any class or of any other
rights (other than pursuant to a rights agreement referenced in Section 14.04(11)); or



     (c) of any reclassification of the Common Stock of the Company (other than a subdivision or
combination of its outstanding shares of Common Stock), or of any consolidation, merger or share
exchange to which the Company is a party and for which approval of any stockholders of the Company
is required, or of the sale or transfer of all or substantially all of the assets of the Company;
or



     (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;


then the Company shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.02, and shall cause to be mailed to all Holders at
their last addresses as they shall appear in the Security Register, at least 20 days (or 10 days in



65









 






any case specified in clause (a) or (b) above) prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is expected that holders
of Common Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification, consolidation, merger,
share exchange, sale, transfer, dissolution, liquidation or winding up. Neither the failure to
give such notice nor any defect therein shall affect the legality or validity of the proceedings
described in clauses (a) through (d) of this Section 14.06. If at the time the Trustee shall not
be the Conversion Agent, a copy of such notice shall also forthwith be delivered by the Company to
the Trustee.




     Section 14.07 Company to Reserve Common Stock. The Company shall at all times reserve
and keep available out of its authorized but unissued Common Stock, for the purpose of effecting
the conversion of Securities, the full number of shares of Common Stock then issuable upon the
conversion of all Outstanding Securities.



     Section 14.08 Taxes on Conversions. The Company will pay any and all taxes that may
be payable in respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock
in a name other than that of the Holder of the Security or Securities to be converted, and no such
issue or delivery shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of the Company that such
tax has been paid.



     Section 14.09 Covenant as to Common Stock. The Company covenants that all shares of
Common Stock which may be issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 14.08, the Company will pay all taxes, liens and
charges with respect to the issue thereof.



     Section 14.10 Cancellation of Converted Securities. All Securities delivered for
conversion shall be delivered to the Trustee to be cancelled by or at the direction of the Trustee,
which shall dispose of the same as provided in Section 3.09.



     Section 14.11 Provisions in Case of Consolidation, Merger or Sale of Assets. In case
of any consolidation of the Company with, or merger of the Company into, any other Person, any
merger of another Person into the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the
Company) or any sale or transfer of all or substantially all of the assets of the Company, the
Person formed by such consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental indenture providing that
the Holder of each convertible Security then outstanding shall have the right thereafter, during
the period such Security shall be convertible as specified in Section 14.01, to convert such
Security only into the kind and amount of securities, cash and other property



66









 







receivable upon such consolidation, merger, sale or transfer by a holder of the number of
shares of Common Stock of the Company into which such Security might have been converted
immediately prior to such consolidation, merger, sale or transfer, assuming such holder of Common
Stock of the Company (i) is not (A) a Person with which the Company consolidated or merged with or
into or which merged into or with the Company or to which such conveyance, sale, transfer or lease
was made, as the case may be (a “Constituent Person”), or (B) an Affiliate of a Constituent Person
and (ii) failed to exercise his, her or its rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Common Stock of the
Company in respect of which such rights of election shall not have been exercised (“non-electing
share”), then for the purpose of this Section the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by each non-electing share
shall be deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article. The above provisions of this
Section shall similarly apply to successive consolidations, mergers, sales or transfers.



     Section 14.12 Responsibility of Trustee. Neither the Trustee nor any Conversion Agent
shall at any time be under any duty or responsibility to any Holder of Securities to determine
whether any fact exists which may require any adjustment of the conversion price, or with respect
to the nature or extent of any such adjustment when made, or with respect to the method employed,
or herein or in any supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any Conversion Agent shall be accountable with respect to the registration,
validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of any Security, or for
monitoring the price of the Common Stock or effecting any calculations hereunder; and neither the
Trustee nor any Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue or
transfer or deliver any Common Stock or stock certificates or other securities or property or to
make any cash payment upon the surrender of any Security for the purpose of conversion or to comply
with any of the covenants of the Company contained in this Article XIV.



ARTICLE XV




SUBORDINATION OF SECURITIES




     Section 15.01 Securities Subordinate to Senior Indebtedness. The Company covenants
and agrees, and each Holder of a Security, by his or her acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set forth in this Article, the
indebtedness represented by the Securities and the payment of the principal of (and premium, if
any) and interest on each and all of the Securities are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior Indebtedness of the Company.



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     Section 15.02 Payment Over of Proceeds Upon Dissolution, Etc. In the event of (a) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or
other similar case or proceeding in connection therewith, relative to the Company, to its
creditors, or to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or
(c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities
of the Company, then and in any such event the holders of Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in respect of all Senior
Indebtedness, or provision shall be made for such payment in money or money’s worth, before the
Holders of the Securities are entitled to receive any payment on account of principal of (or
premium, if any) or interest on the Securities, and to that end the holders of Senior Indebtedness
shall be entitled to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding, dissolution, liquidation or
other winding up or event.



     In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or
the Holder of any Security shall have received any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, before all Senior Indebtedness
is paid in full or payment thereof provided for, and if such fact shall, at or prior to the time of
such payment or distribution, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets of the Company for application to the
payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness.



     For purposes of this Article only, the words “cash, property or securities” shall not be
deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Securities are so subordinated
as provided in this Article. The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following the conveyance or
transfer of its properties and assets substantially as an entirety to another Person upon the terms
and conditions set forth in Article VIII shall not be deemed a dissolution, winding up,
liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and
liabilities of the Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set forth in Article
VIII.



     Section 15.03 Prior Payment to Senior Indebtedness Upon Acceleration of Securities.
In the event that any Securities are declared due and payable before their Stated Maturity, then
and in such event the holders of Senior Indebtedness outstanding at the time such Securities so



68









 







become due and payable shall be entitled to receive payment in full of all amounts due or to
become due on or in respect of such Senior Indebtedness, or provision shall be made for such
payment in money or money’s worth, before the Holders of the Securities are entitled to receive any
payment by the Company on account of the principal of (or premium, if any) or interest on the
Securities or on account of the purchase or other acquisition of Securities; provided, however,
that nothing in this Section shall prevent the satisfaction of any sinking fund payment in
accordance with Article XII by delivering and crediting pursuant to Section 12.02 Securities which
have been acquired (upon redemption or otherwise) prior to such default or which have been
converted pursuant to Article XIV.



     In the event that, notwithstanding the foregoing, the Company shall make any payment to the
Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and
if such fact shall, at or prior to the time of such payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.



     The provisions of this Section shall not apply to any payment with respect to which Section
15.02 would be applicable.



     Section 15.04 No Payment When Senior Indebtedness in Default.



               (a) In the event and during the continuation of any default in the payment of principal of (or
premium, if any) or interest on any Senior Indebtedness beyond any applicable grace period with
respect thereto, or in the event that any event of default with respect to any Senior Indebtedness
shall have occurred and be continuing and shall have resulted in such Senior Indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or waived or shall have
ceased to exist and such acceleration shall have been rescinded or annulled, or (b) in the event
any judicial proceeding shall be pending with respect to any such default in payment or event of
default, then no payment shall be made by the Company on account of principal of (or premium, if
any) or interest on the Securities or on account of the purchase or other acquisition of
Securities; provided , however , that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with Article XII by delivering and crediting pursuant to Section
12.02 Securities which have been acquired (upon redemption or otherwise) prior to such default or
which have been converted pursuant to Article XIV.



     In the event that, notwithstanding the foregoing, the Company shall make any payment to the
Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, and
if such fact shall, at or prior to the time of such payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.



     The provisions of this Section shall not apply to any payment with respect to which Section
15.02 would be applicable.



69









 





     Section 15.05 Payment Permitted If No Default. Nothing contained in this Article or
elsewhere in this Indenture or in any of the Securities shall prevent the Company, at any time
except during the pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 15.02 or under the conditions described in Section 15.03 or 15.04,
from making payments at any time of principal of (and premium, if any) or interest on the
Securities.



     Section 15.06 Subrogation to Rights of Holders of Senior Indebtedness. Subject to the
payment in full of all Senior Indebtedness, the Holders of the Securities shall be subrogated
(equally and ratably with the holders of all indebtedness of the Company) to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and premium, if any) and
interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the Securities, be deemed to
be a payment or distribution by the Company to or on account of the Senior Indebtedness.



     Section 15.07 Provisions Solely to Define Relative Rights. The provisions of this
Article are and are intended solely for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Senior Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the obligations of the Company, which are absolute
and unconditional (and which, subject to the rights under this Article of the holders of Senior
Indebtedness, are intended to rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities the principal of (and premium, if any) and interest on the
Securities as and when the same shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the Securities and creditors of
the Company other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder
of any Security from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the holders of Senior
Indebtedness to receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.



     Section 15.08 Trustee to Effectuate Subordination. Each holder of a Security by his
or her acceptance thereof authorizes and directs the Trustee on his or her behalf to take such
action as may be necessary or appropriate to effectuate the subordination provided in this Article
and appoints the Trustee his or her attorney-in-fact for any and all such purposes.



     Section 15.09 No Waiver of Subordination Provisions. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the part of the Company
or



70









 







by any non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged
with.



     Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do
any one or more of the following: (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any
rights against the Company and any other Person.



     Section 15.10 Notice to Trustee. The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any
other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice thereof at its
Corporate Trust Office from the Company, a holder of Senior Indebtedness or from any trustee
therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist;
provided, however, that if a Responsible Officer of the Trustee shall not have
received the notice provided for in this Section at least [ • ] Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be received by it within
[ • ] Business Days prior to such date.



     Subject to the provisions of Section 6.01, the Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee therefor). In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts pertinent to the rights
of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such Person to receive
such payment.



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     Section 15.11 Reliance on Judicial Order or Certificate of Liquidating Agent. Upon
any payment or distribution of assets of the Company referred to in this Article, the Trustee,
subject to the provisions of Section 6.01, and the Holders of the Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or
similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or distribution, the
holders of the Senior Indebtedness, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article.



     Section 15.12 Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not
be liable to any such holders if it shall in good faith mistakenly pay over or distribute to
Holders of Securities or to the Company or to any other Person cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.



     Section 15.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee’s Rights. The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at any time be held by
it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder.



     Nothing in this Article shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.06.



     Section 15.14 Article Applicable to Paying Agents. In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder,
the term “Trustee” as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within its meaning as fully
for all intents and purposes as if such Paying Agent were named in this Article in addition to or
in place of the Trustee.



     Section 15.15 Certain Conversions Deemed Payment. For the purposes of this Article
only, (1) the issuance and delivery of junior securities upon conversion of Securities in
accordance with Article XIV shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on Securities or on account of the purchase or other
acquisition of Securities, and (2) the payment, issuance or delivery of cash, property or
securities (other than junior securities) upon conversion of a Security shall be deemed to
constitute payment on account of the principal of such Security. For the purposes of this Section,
the term “junior securities” means (a) shares of any stock of any class of the Company and (b)
securities of the Company which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities to substantially
the same extent as, or to a greater extent than, the Securities are so subordinated as provided in
this Article. Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors other than holders
of Senior



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Indebtedness and the Holders of the Securities, the right, which is absolute and
unconditional, of the Holder of any Security to convert such Security in accordance with Article
XIV.



     Section 15.16 Trust Moneys Not Subordinated. Notwithstanding anything contained
herein to the contrary, payments from moneys or the proceeds of U.S. Government Obligations held in
trust under Article XIII by the Trustee for the payment of principal of, premium, if any, and
interest on the Securities from the date of deposit (if made in compliance with this Indenture)
shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the
restraints set forth in this Article, and none of the Holders of Securities shall be obligated to
pay over any such amount to the Company or any holder of Senior Indebtedness of the Company or any
other creditor of the Company.



     The Trustee makes no representations as to the validity or sufficiency of this Indenture; the
recitals and statements herein are deemed to be those of the Company and not of the Trustee.



     This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.



(Signature Page to Follow)





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     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.



	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Trustee:




[TRUSTEE], as trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: