Document:

Exhibit 4.6

 

Houghton Mifflin Company

 

8.250% Senior Notes due 2011

 

Exchange and Registration Rights Agreement

 

January 30, 2003

Goldman, Sachs & Co.,

CIBC World Markets Corp.

Deutsche Bank Securities Inc.

Fleet Securities, Inc.

As representatives of the
several Purchasers

named in Schedule I to the Purchase Agreement

c/o Goldman, Sachs & Co.

85 Broad Street

New York, New York 10004

 

Ladies and Gentlemen:

 

Houghton Mifflin Company, a Massachusetts corporation (the “Company”),
proposes to issue and sell to the Purchasers (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) its 8.250% Senior Notes
due 2011 (the “Senior Notes”).  As an
inducement to the Purchasers to enter into the Purchase Agreement and in
satisfaction of a condition to the obligations of the Purchasers thereunder,
the Company agrees with the Purchasers for the benefit of holders (as defined
herein) from
time to time of the Registrable Securities (as defined herein) as follows:

 

1.             Certain
Definitions.  For purposes of this Exchange and
Registration Rights Agreement, the following terms shall have the following
respective meanings:

 

“Base
Interest” shall mean
the interest that would otherwise accrue on the Securities under the terms
thereof and the Indenture, without giving effect to the provisions of this
Agreement.

 

 

The
term “broker-dealer”
shall mean any broker or dealer registered with the Commission under the
Exchange Act.

 

“Closing
Date” shall mean the
date on which the Senior Notes are initially issued.

 

“Commission” shall mean the United States Securities and
Exchange Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for the
particular purpose.

 

“Effective
Time,” in the case
of (i) an Exchange Registration, shall mean the time and date as of which
the Commission declares the Exchange Registration Statement effective or as of
which the Exchange Registration Statement otherwise becomes effective and
(ii) a Shelf Registration, shall mean the time and date as of which the
Commission declares the Shelf Registration Statement effective or as of which
the Shelf Registration Statement otherwise becomes effective.

 

“Electing
Holder” shall mean
any holder of Registrable Securities that has returned a completed and signed
Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or
3(d)(iii) hereof.

 

“Exchange
Act” shall mean the
Securities Exchange Act of 1934, or any successor thereto, as the same shall be
amended from time to time.

 

“Exchange
Offer” shall have
the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange
Registration” shall
have the meaning assigned thereto in Section 3(c) hereof.

 

“Exchange
Registration Statement”
shall have the meaning assigned thereto in Section 2(a) hereof.

 

“Exchange
Securities” shall
have the meaning assigned thereto in Section 2(a) hereof.

 

The term “holder” shall mean each of the Purchasers and other
persons who acquire Registrable Securities from time to time (including any
successors or assigns), in each case for so long as such person owns any
Registrable Securities.

 

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“Indenture” means the indenture, dated as of January
30, 2003, between the Company and the Trustee, relating to the issuance of
the Senior Notes, as the same shall be amended from time to time.

 

“Notice
and Questionnaire”
means a Notice of Registration Statement and Selling Securityholder
Questionnaire substantially in the form of Exhibit A hereto.

 

The term “person” shall mean a corporation, association,
partnership, organization, business, individual, government or political
subdivision thereof or governmental agency.

 

“Purchase
Agreement” shall
mean the Purchase Agreement, dated January 24, 2003, between the
Purchasers and the Company relating to the Securities.

 

“Purchasers” shall mean the Purchasers named in Schedule
I to the Purchase Agreement.

 

“Registrable
Securities” shall
mean the Securities; provided, however, that a Security shall cease to be a Registrable Security when
(i) in the circumstances contemplated by Section 2(a) hereof, the
Security has been exchanged for an Exchange Security in an Exchange Offer as
contemplated in Section 2(a) hereof (provided that any Exchange Security that,
pursuant to the last two sentences of Section 2(a), is included in a prospectus
for use in connection with resales by broker-dealers shall be deemed to be a
Registrable Security with respect to Sections 6 and 9 until resale of such
Registrable Security has been effected within the 90-day period referred to in
the second to last sentence of Section 2(a)); (ii) in the circumstances contemplated
by Section 2(b) hereof, a Shelf Registration Statement registering such
Security under the Securities Act has been declared or becomes effective and
such Security has been sold or otherwise transferred by the holder thereof
pursuant to and in a manner contemplated by such effective Shelf Registration
Statement; (iii) such Security is sold pursuant to Rule 144 under
circumstances in which any legend borne by such Security relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Company or pursuant to the Indenture; (iv) such Security is
eligible to be sold pursuant to paragraph (k) of Rule 144; or (v)
such Security shall cease to be outstanding.

 

“Registration
Default” shall have
the meaning assigned thereto in Section 2(c) hereof.

 

“Registration
Expenses” shall have
the meaning assigned thereto in Section 4 hereof.

 

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“Resale
Period” shall have
the meaning assigned thereto in Section 2(a) hereof.

 

“Restricted
Holder” shall mean
(i) a holder that is an affiliate of the Company within the meaning of
Rule 405, (ii) a holder who acquires Exchange Securities outside the
ordinary course of such holder’s business, (iii) a holder who has arrangements
or understandings with any person to participate in the Exchange Offer for the
purpose of distributing Exchange Securities and (iv) a holder that is a
broker-dealer, but only with respect to Exchange Securities received by such
broker-dealer pursuant to an Exchange Offer in exchange for Registrable
Securities acquired by the broker-dealer directly from the Company.

 

“Rule
144,” “Rule 405” and
“Rule
415” shall mean, in each
case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.

 

“Securities” shall mean the Senior Notes of the Company
to be issued and sold to the Purchasers, and securities issued in exchange
therefor or in lieu thereof pursuant to the Indenture.

 

“Securities
Act” shall mean the
Securities Act of 1933, or any successor thereto, as the same shall be amended
from time to time.

 

“Shelf
Registration” shall
have the meaning assigned thereto in Section 2(b) hereof.

 

“Shelf
Registration Statement”
shall have the meaning assigned thereto in Section 2(b) hereof.

 

“Special
Interest” shall have
the meaning assigned thereto in Section 2(c) hereof.

 

“Suspension
Period” shall have
the meaning assigned thereto in Section 3(d)(ix) hereof.

 

“Trust
Indenture Act” shall
mean the Trust Indenture Act of 1939, or any successor thereto, and the rules,
regulations and forms promulgated thereunder, all as the same shall be amended
from time to time.

 

Unless
the context otherwise requires, any reference herein to a “Section” or “clause”
refers to a Section or clause, as the case may be, of this Exchange and
Registration Rights Agreement, and the words “herein,” “hereof” and “hereunder”
and other

 

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words
of similar import refer to this Exchange and Registration Rights Agreement as a
whole and not to any particular Section or other subdivision.

 

2.             Registration
Under the Securities Act.

 

(a)           Except as set forth
in Section 2(b) below, the Company agrees to file under the Securities Act, no
later than 120 days after the Closing Date a registration statement relating to
an offer to exchange (such registration statement, the “Exchange Registration
Statement”, and such offer, the “Exchange Offer”) any and all of the Securities
for a like aggregate principal amount of debt securities issued by the Company,
which debt securities are substantially identical to the Securities (and are entitled
to the benefits of a trust indenture which is substantially identical to the
Indenture or is the Indenture that has been qualified under the Trust Indenture
Act), except that they have been registered pursuant to an effective
registration statement under the Securities Act and do not contain provisions
for the additional interest contemplated in Section 2(c) below (such new debt
securities hereinafter called “Exchange Securities”).  The Company agrees to use commercially reasonable efforts to
cause the Exchange Registration Statement to become effective under the
Securities Act no later than 180 days after the Closing Date.  The Exchange Offer will be registered under
the Securities Act on the appropriate form and will comply with all applicable
tender offer rules and regulations under the Exchange Act.  The Company further agrees to use
commercially reasonable efforts to commence and complete the Exchange Offer no
later than 225 days after the Closing Date, hold the Exchange Offer open for at
least 20 business days and exchange Exchange Securities for all Registrable
Securities that have been properly tendered and not withdrawn on or prior to
the expiration of the Exchange Offer. 
The Exchange Offer will be deemed to have been “completed” only if the debt
securities received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are, upon receipt, transferable by each such
holder without restriction under the Securities Act and the Exchange Act and
without material restrictions under the blue sky or securities laws of a
substantial majority of the States of the United States of America.  The Exchange Offer shall be deemed to have
been completed upon the earlier to occur of (i) the Company having exchanged
the Exchange Securities for all outstanding Registrable Securities pursuant to
the Exchange Offer and (ii) the Company having exchanged, pursuant to the
Exchange Offer, Exchange Securities for all Registrable Securities that have
been properly tendered and not withdrawn before the expiration of the Exchange
Offer, which shall be on a date that is at least 20 business days following the
commencement of the Exchange Offer.  The
Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in any resales by any holder of Exchange Securities that is
a broker-dealer and (y) to keep such Exchange Registration Statement effective
for a period (the “Resale Period”) beginning when Exchange Securities are first
issued in the Exchange Offer and ending upon the earlier of the expiration of
the 90th day after the Exchange Offer has been completed or such time as such
broker-dealers no longer own any Registrable Securities. 

 

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With respect to
such Exchange Registration Statement, such holders shall have the benefit of
the rights of indemnification and contribution set forth in Sections 6(a),
(c), (d) and (e) hereof.

 

(b)           If (i) on or prior
to the time the Exchange Offer is completed existing Commission interpretations
are changed such that the debt securities received by holders other than
Restricted Holders in the Exchange Offer for Registrable Securities are not or
would not be, upon receipt, transferable by each such holder without
restriction under the Securities Act, (ii) the Exchange Offer has not been
completed within 225 days following the Closing Date or (iii) the Exchange
Offer is not available to any holder of the Securities, the Company shall, in
lieu of (or, in the case of clause (iii), in addition to) conducting the
Exchange Offer contemplated by Section 2(a), use commercially reasonable
efforts to file under the Securities Act no later than the later of 90 days
after the time such obligation to file arises (but in no event earlier than the
Exchange Registration Statement would have had to be filed), a “shelf”
registration statement providing for the registration of, and the sale on a
continuous or delayed basis by the holders of, all of the Registrable
Securities, pursuant to Rule 415 or any similar rule that may be adopted by the
Commission (such filing, the “Shelf Registration” and such registration
statement, the “Shelf Registration Statement”).  The Company agrees to use commercially reasonable efforts (x) to
cause the Shelf Registration Statement to become or be declared effective no
later than 120 days after such Shelf Registration Statement is filed and to
keep such Shelf Registration Statement continuously effective for a period
ending on the earlier of the second anniversary of the Effective Time or such
time as there are no longer any Registrable Securities outstanding, provided,
however,
that no holder shall be entitled to be named as a selling securityholder in the
Shelf Registration Statement or to use the prospectus forming a part thereof
for resales of Registrable Securities unless such holder is an Electing Holder,
and (y) after the Effective Time of the Shelf Registration Statement, promptly
upon the request of any holder of Registrable Securities that is not then an
Electing Holder, to take any action reasonably necessary to enable such holder
to use the prospectus forming a part thereof for resales of Registrable
Securities, including, without limitation, any action necessary to identify
such holder as a selling securityholder in the Shelf Registration Statement, provided,
however,
that nothing in this Clause (y) shall relieve any such holder of the obligation
to return a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(d)(iii) hereof. 
The Company further agrees to supplement or make amendments to the Shelf
Registration Statement, as and when required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment prior to its being
used or promptly following its filing with the Commission.

 

(c)           In the event that
(i) the Company has not filed the Exchange Registration Statement or Shelf
Registration Statement on or before the applicable date pursuant to

 

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Section 2(a) or
2(b), respectively, or (ii) such Exchange Registration Statement or Shelf
Registration Statement has not become effective or been declared effective by
the Commission on or before the applicable date pursuant to Section 2(a) or
2(b), respectively, or (iii) the Exchange Offer has not been completed within
225 days after the Closing Date (if the Exchange Offer is then required to be
made) or (iv) any Exchange Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) hereof is filed and declared effective
but shall thereafter either be withdrawn by the Company or shall become subject
to an effective stop order issued pursuant to Section 8(d) of the Securities
Act suspending the effectiveness of such registration statement (except as
specifically permitted herein) without being succeeded as soon as practicable
thereafter by an additional registration statement filed and declared effective
(each such event referred to in clauses (i) through (iv), a “Registration
Default” and each period during which a Registration Default has occurred and
is continuing, a “Registration Default Period”), then, as liquidated damages
for such Registration Default, subject to the provisions of Section 9(b),
special interest (“Special Interest”), in addition to the Base Interest, shall
accrue at a per annum rate of 0.25% for the first 90 days of the Registration
Default Period, at a per annum rate of 0.25% for each 90-day period thereafter;
provided,
however,
that the maximum rate during any Registration Default Period shall not exceed
1.0% per annum; provided, further, that the Registration Default
referred to in this Section 2(c) shall not apply in the case of any
Suspension Period permitted in accordance with Section 3(d)(ix) (subject
to the limitations set forth therein) to the extent such liquidated damages are
due solely as a result of the imposition of such Suspension Period.

 

(d)           The Company shall
take all actions necessary or advisable to be taken by it to ensure that the
transactions contemplated herein are effected as so contemplated.

 

(e)           Any reference herein
to a registration statement as of any time shall be deemed to include any
document incorporated, or deemed to be incorporated, therein by reference as of
such time and any reference herein to any post-effective amendment to a
registration statement as of any time shall be deemed to include any document
incorporated, or deemed to be incorporated, therein by reference as of such
time.

 

3.             Registration
Procedures.

 

If the Company files a registration statement pursuant to
Section 2(a) or Section 2(b), the following provisions shall apply:

 

(a)           At or before the
Effective Time of the Exchange Offer or the Shelf Registration, as the case may
be, the Company shall qualify the Indenture under the Trust Indenture Act of
1939.

 

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(b)           In the event that
such qualification would require the appointment of a new trustee under the
Indenture, the Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.

 

(c)           In connection with
the Company’s obligations with respect to the registration of Exchange
Securities as contemplated by Section 2(a) (the “Exchange Registration”), if
applicable, the Company shall, as soon as practicable (or as otherwise specified):

 

(i)            prepare and file with the
Commission, no later than 120 days after the Closing Date an Exchange Registration
Statement on any form which may be utilized by the Company and which shall
permit the Exchange Offer and resales of Exchange Securities by broker-dealers
during the Resale Period to be effected as contemplated by Section 2(a), and
use commercially reasonable efforts to cause such Exchange Registration
Statement to become effective no later than 180 days after the Closing Date;

 

(ii)           as soon as practicable prepare and
file with the Commission such amendments and supplements to such Exchange
Registration Statement and the prospectus included therein as may be necessary
to effect and maintain the effectiveness of such Exchange Registration
Statement for the periods and purposes contemplated in Section 2(a) hereof
and as may be required by the applicable rules and regulations of the
Commission and the instructions applicable to the form of such Exchange
Registration Statement, and promptly provide each broker-dealer holding
Exchange Securities with such number of copies of the prospectus included
therein (as then amended or supplemented), in conformity in all material
respects with the requirements of the Securities Act and the Trust Indenture
Act and the rules and regulations of the Commission thereunder, as such
broker-dealer reasonably may request prior to the expiration of the Resale
Period, for use in connection with resales of Exchange Securities;

 

(iii)          promptly notify each broker-dealer
that has requested or received copies of the prospectus included in such
registration statement, and if requested in writing by such broker-dealer,
confirm such advice in writing, (A) when such Exchange Registration Statement
or the prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such Exchange
Registration Statement or any post-effective amendment, when the same has
become effective, (B) of the issuance by the Commission of any stop order
suspending the effectiveness of such Exchange Registration Statement or the
initiation or threatening of any proceedings for that purpose, (C) of the
receipt by the Company of any notification

 

8

 

with respect to the
suspension of the qualification of the Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (D) at any time during the Resale Period when a prospectus is required
to be delivered under the Securities Act, that such Exchange Registration
Statement, prospectus, prospectus amendment or supplement or post-effective
amendment does not conform in all material respects to the applicable requirements
of the Securities Act and the Trust Indenture Act and the rules and regulations
of the Commission thereunder or contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances
then existing;

 

(iv)          in the event that the Company would be
required, pursuant to Section 3(e)(iii)(D) above, to notify any broker-dealers
holding Exchange Securities, as soon as practicable prepare and furnish to each
such holder a reasonable number of copies of a prospectus supplemented or
amended so that, as thereafter delivered to purchasers of such Exchange
Securities during the Resale Period, such prospectus shall conform in all
material respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission thereunder
and shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;

 

(v)           use commercially reasonable efforts
to obtain the withdrawal of any order suspending the effectiveness of such
Exchange Registration Statement or any post-effective amendment thereto at the
earliest practicable date;

 

(vi)          use commercially reasonable efforts to
(A) register or qualify the Exchange Securities under the securities laws or
blue sky laws of such jurisdictions as are contemplated by Section 2(a) no
later than the commencement of the Exchange Offer, (B) keep such registrations
or qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions until
the expiration of the Resale Period and (C) take any and all other actions as
may be reasonably necessary or advisable to enable each broker-dealer holding Exchange
Securities to consummate the disposition thereof in such jurisdictions; provided,
however,
that the Company shall not be required for any such purpose to (1) qualify as a
foreign corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(c)(vi), (2)
consent to general service of process in any such jurisdiction or (3) make any
changes to its

 

9

 

certificate of
incorporation or by-laws or any agreement between it and its stockholders;

 

(vii)         subject to Section 3(c)(vi), use
commercially reasonable efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which may be
required to effect the Exchange Registration, the Exchange Offer and the
offering and sale of Exchange Securities by broker-dealers during the Resale Period;

 

(viii)        provide a CUSIP number for all Exchange
Securities, not later than the applicable Effective Time;

 

(ix)           comply with all applicable rules and
regulations of the Commission, and make generally available to its securityholders
as soon as practicable but no later than eighteen months after the effective
date of such Exchange Registration Statement, an earning statement of the
Company and its subsidiaries complying with Section 11(a) of the Securities Act
(including, at the option of the Company, Rule 158 thereunder).

 

(d)           In connection with
the Company’s obligations with respect to the Shelf Registration, if
applicable, the Company shall, as soon as practicable (or as otherwise
specified):

 

(i)            prepare and file with the Commission,
as soon as practicable but in any case within the time periods specified in
Section 2(b), a Shelf Registration Statement on any form which may be utilized
by the Company and which shall register all of the Registrable Securities for
resale by the holders thereof in accordance with such method or methods of
disposition as may be specified by such of the holders as, from time to time,
may be Electing Holders and use commercially reasonable efforts to cause such
Shelf Registration Statement to become effective as soon as practicable but in
any case within the time periods specified in Section 2(b);

 

(ii)           not less than 20 business days prior
to the Effective Time of the Shelf Registration Statement, mail the Notice and
Questionnaire to the holders of Registrable Securities; no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement as of the Effective Time, and no holder shall be entitled to use the
prospectus forming a part thereof for resales of Registrable Securities at any
time, unless such holder has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth therein; provided,
however,
holders of Registrable

 

10

 

Securities shall have at
least 18 days from the date on which the Notice and Questionnaire is first
mailed to such holders to return a completed and signed Notice and
Questionnaire to the Company;

 

(iii)          after the Effective Time of the Shelf
Registration Statement, upon the request of any holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such holder; provided that the Company shall not be
required to take any action to name such holder as a selling securityholder in
the Shelf Registration Statement or to enable such holder to use the prospectus
forming a part thereof for resales of Registrable Securities until such holder
has returned a completed and signed Notice and Questionnaire to the Company;

 

(iv)          as soon as practicable prepare and
file with the Commission such amendments and supplements to such Shelf
Registration Statement and the prospectus included therein as may be necessary
to effect and maintain the effectiveness of such Shelf Registration Statement
for the period specified in Section 2(b) hereof and as may be required by
the applicable rules and regulations of the Commission and the instructions
applicable to the form of such Shelf Registration Statement, and furnish to the
Electing Holders copies of any such supplement or amendment simultaneously with
or prior to its being used or filed with the Commission;

 

(v)           comply with the provisions of the
Securities Act with respect to the disposition of all of the Registrable
Securities covered by such Shelf Registration Statement in accordance with the
intended methods of disposition by the Electing Holders provided for in such
Shelf Registration Statement;

 

(vi)          provide (A) the Electing Holders,
(B) the underwriters (which term, for purposes of this Exchange and
Registration Rights Agreement, shall include a person deemed to be an
underwriter within the meaning of Section 2(a)(11) of the Securities Act), if
any, thereof, (C) any sales or placement agent therefor, (D) counsel for
any such underwriter or agent and (E) not more than one counsel for all the
Electing Holders the opportunity to participate in the preparation of such
Shelf Registration Statement, each prospectus included therein or filed with
the Commission and each amendment or supplement thereto;

 

(vii)         for a reasonable period prior to the
filing of such Shelf Registration Statement, and throughout the period
specified in Section 2(b), make available at reasonable times at the Company’s
principal place of business or

 

11

 

such other reasonable
place for inspection by the persons referred to in Section 3(d)(vi) who shall
certify to the Company that they have a current intention to sell the
Registrable Securities pursuant to the Shelf Registration such financial and
other information and books and records of the Company, and cause the officers,
employees, counsel and independent certified public accountants of the Company
to respond to such inquiries, as shall be reasonably necessary, in the judgment
of the respective counsel referred to in such Section, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act; provided,
however,
that each such party shall be required to maintain in confidence and not to
disclose to any other person any information or records reasonably designated
by the Company as being confidential, until such time as (A) such information
becomes a matter of public record (whether by virtue of its inclusion in such
registration statement or otherwise), or (B) such person shall be required so
to disclose such information pursuant to a subpoena or order of any court or
other governmental agency or body having jurisdiction over the matter (subject
to the requirements of such order, and only after such person shall have given
the Company prompt prior written notice of such requirement), or (C) such
information is required to be set forth in such Shelf Registration Statement or
the prospectus included therein or in an amendment to such Shelf Registration
Statement or an amendment or supplement to such prospectus in order that such
Shelf Registration Statement, prospectus, amendment or supplement, as the case
may be, complies with applicable requirements of the federal securities laws
and the rules and regulations of the Commission and does not contain an untrue
statement of a material fact or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing;

 

(viii)        promptly notify each of the Electing
Holders, any sales or placement agent therefor and any underwriter thereof
(which notification may be made through any managing underwriter that is a
representative of such underwriter for such purpose) and confirm such advice in
writing, (A) when such Shelf Registration Statement or the prospectus included
therein or any prospectus amendment or supplement or post-effective amendment
has been filed, and, with respect to such Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (B) of any
comments by the Commission and by the blue sky or securities commissioner or
regulator of any state with respect thereto or any request by the Commission
for amendments or supplements to such Shelf Registration Statement or prospectus
or for additional information, (C) of the issuance by the Commission of any
stop order suspending the effectiveness of such Shelf Registration Statement or
the initiation

 

12

 

or threatening of any
proceedings for that purpose, (D) if at any time the representations and
warranties of the Company contemplated by Section 3(d)(xvii) cease to be true
and correct in all material respects, (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (F) if at any time when a
prospectus is required to be delivered under the Securities Act, that such
Shelf Registration Statement, prospectus, prospectus amendment or supplement or
post-effective amendment does not conform in all material respects to the
applicable requirements of the Securities Act and the Trust Indenture Act and
the rules and regulations of the Commission thereunder or contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

 

(ix)           use commercially reasonable efforts
to obtain the withdrawal of any order suspending the effectiveness of such
registration statement or any post-effective amendment thereto at the earliest
practicable date; provided,  however, the Company shall be deemed not
to have used their commercially reasonable efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes any
action that would result in Electing Holders of Exchange Securities covered
thereby not being able to offer and sell such Exchange Securities during that
period, unless, in the opinion of counsel to the Company,  (A) such action is required by
applicable law; or (B) due to the existence of material non-public information,
disclosure of such material non-public information would be required to make
the statements contained in the applicable registration statement not
misleading (including, without limitation and for the avoidance of doubt, the
pendency of an acquisition, disposition or public or private offering by the
Company), and the Company has a bona fide business purpose for preserving as
confidential such material non-public information, the Company shall have the right
to suspend the use of such registration statement (a “Suspension Period”), and no
Electing Holder of Exchange Securities shall be permitted to sell any Exchange
Securities pursuant thereto until such time as such suspension is no longer
required hereunder; provided that the Company shall, prior to
any suspension of the Shelf Registration Statement, provide the Electing
Holders with written notice of such suspension, which notice need not specify
the nature of the event giving rise to such suspension; provided, further,
that (i) such Suspension Period shall not exceed a period of forty-five
(45) consecutive days, (ii) the Company may not declare more than three
(3) Suspension Periods during any calendar year and (iii) in each case the
effective period of such Shelf Registration Statement shall be extended

 

13

 

by the number of days of
the applicable Suspension Period pursuant to the foregoing.  As soon as such suspension is no longer
required hereunder or upon expiration of a Suspension Period, the Company shall
take all such reasonable actions as are required to permit sales by Electing
Holders of Exchange Securities under an effective Registration Statement, including,
if required, promptly, but in no event later than the date the Company files
any documents with the Commission referencing such material information, file
with the Commission either such Registration Statement, or if necessary, an
amendment to such Registration Statement disclosing such information and use
their commercially reasonable efforts to have such Registration Statement or
amendment be declared effective as soon as possible;

 

(x)            if requested by any managing
underwriter or underwriters, any placement or sales agent or any Electing Holder,
promptly incorporate in a prospectus supplement or post-effective amendment
such information as is required by the applicable rules and regulations of the
Commission and as such managing underwriter or underwriters, such agent or such
Electing Holder specifies should be included therein relating to the terms of
the sale of such Registrable Securities, including information with respect to
the principal amount of Registrable Securities being sold by such Electing
Holder or agent or to any underwriters, the name and description of such
Electing Holder, agent or underwriter, the offering price of such Registrable
Securities and any discount, commission or other compensation payable in
respect thereof, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the offering of the Registrable
Securities to be sold by such Electing Holder or agent or to such underwriters;
and make all required filings of such prospectus supplement or post-effective
amendment promptly after notification of the matters to be incorporated in such
prospectus supplement or post-effective amendment;

 

(xi)           furnish to each Electing Holder, each
placement or sales agent, if any, therefor, each underwriter, if any, thereof
and the respective counsel referred to in Section 3(d)(vi) an executed copy
(or, in the case of an Electing Holder, a conformed copy) of such Shelf
Registration Statement, each such amendment and supplement thereto (in each
case including all exhibits thereto (in the case of an Electing Holder of
Registrable Securities, upon request) and documents incorporated by reference
therein) and such number of copies of such Shelf Registration Statement
(excluding exhibits thereto and documents incorporated by reference therein
unless specifically so requested by such Electing Holder, agent or underwriter,
as the case may be) and of the prospectus included in such Shelf Registration
Statement (including each preliminary

 

14

 

prospectus and any summary
prospectus), in conformity in all material respects with the applicable
requirements of the Securities Act and the Trust Indenture Act and the rules
and regulations of the Commission thereunder, and such other documents, as such
Electing Holder, agent, if any, and underwriter, if any, may reasonably request
in order to facilitate the offering and disposition of the Registrable
Securities owned by such Electing Holder, offered or sold by such agent or
underwritten by such underwriter and to permit such Electing Holder, agent and
underwriter to satisfy the prospectus delivery requirements of the Securities
Act; and the Company hereby consents to the use of such prospectus (including
such preliminary and summary prospectus) and any amendment or supplement
thereto by each such Electing Holder and by any such agent and underwriter, in
each case in the form most recently provided to such person by the Company, in
connection with the offering and sale of the Registrable Securities covered by
the prospectus (including such preliminary and summary prospectus) or any
supplement or amendment thereto;

 

(xii)          use commercially reasonable efforts to
(A) register or qualify the Registrable Securities to be included in such Shelf
Registration Statement under such securities laws or blue sky laws of such
jurisdictions as any Electing Holder and each placement or sales agent, if any,
therefor and underwriter, if any, thereof shall reasonably request, (B) keep
such registrations or qualifications in effect and comply with such laws so as
to permit the continuance of offers, sales and dealings therein in such
jurisdictions during the period the Shelf Registration is required to remain
effective under Section 2(b) above and for so long as may be necessary to
enable any such Electing Holder, agent or underwriter to complete its
distribution of Securities pursuant to such Shelf Registration Statement and
(C) take any and all other actions as may be reasonably necessary or advisable
to enable each such Electing Holder, agent, if any, and underwriter, if any, to
consummate the disposition in such jurisdictions of such Registrable Securities;
provided,
however,
that the Company shall not be required for any such purpose to (1) qualify as a
foreign corporation in any jurisdiction wherein it would not otherwise be
required to qualify but for the requirements of this Section 3(d)(xii), (2)
consent to general service of process in any such jurisdiction or (3) make any
changes to its certificate of incorporation or by-laws or any agreement between
it and its stockholders;

 

(xiii)         subject to Section 3(d)(xii), use
commercially reasonable efforts to obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which may be
required to effect the Shelf Registration or the offering or sale in connection
therewith or to enable the selling

 

15

 

holder or holders to
offer, or to consummate the disposition of, their Registrable Securities;

 

(xiv)        unless any Registrable Securities shall
be in book-entry only form, cooperate with the Electing Holders and the
managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold, which
certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or engraved,
or produced by any combination of such methods, on steel engraved borders, and
which certificates shall not bear any restrictive legends; and, in the case of
an underwritten offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of the Registrable Securities;

 

(xv)         provide a CUSIP number for all
Registrable Securities, not later than the applicable Effective Time;

 

(xvi)        on no more than one occasion, enter into
an underwriting agreement, agency agreement, “best efforts” underwriting agreement
or similar agreement, as appropriate, including customary provisions relating
to indemnification and contribution, and take such other actions in connection
therewith as any Electing Holders aggregating at least a majority in aggregate
principal amount of the Registrable Securities at the time outstanding shall request
in order to expedite or facilitate the disposition of such Registrable
Securities;

 

(xvii)       in the event an agreement of the type
referred to in Section 3(d)(xvi) hereof is entered into, (A) make such
representations and warranties to the Electing Holders and the placement or
sales agent, if any, therefor and the underwriters, if any, thereof in form,
substance and scope as are customarily made in connection with an offering of
debt securities pursuant to any appropriate agreement or to a registration
statement filed on the form applicable to the Shelf Registration; (B) obtain an
opinion of counsel to the Company in customary form and covering such matters,
of the type customarily covered by such an opinion, as the managing
underwriters, if any, or as any Electing Holders of at least a majority in
aggregate principal amount of the Registrable Securities at the time
outstanding may reasonably request, addressed to such Electing Holder or Electing
Holders and the placement or sales agent, if any, therefor and the
underwriters, if any, thereof and dated the effective date of such Shelf
Registration Statement (and if such Shelf Registration Statement contemplates
an underwritten offering of a part or all of the Registrable Securities,

 

16

 

dated the date of the
closing under the underwriting agreement relating thereto) (it being agreed
that the matters to be covered by such opinion shall include the due
incorporation and good standing of the Company and its subsidiaries; the
qualification of the Company and its subsidiaries to transact business as
foreign corporations; the due authorization, execution and delivery of the
relevant agreement of the type referred to in Section 3(d)(xvi) hereof; the due
authorization, execution, authentication and issuance, and the validity and
enforceability, of the Securities; the absence of material legal or
governmental proceedings involving the Company; a statement that the
transactions contemplated by such agreement referred to in clause (xvi) above
would not result in a breach by the Company of, or a default under, material
agreements binding upon the Company; the absence of governmental approvals
required to be obtained in connection with the Shelf Registration, the offering
and sale of the Registrable Securities, this Exchange and Registration Rights
Agreement or any agreement of the type referred to in Section 3(d)(xvi) hereof,
except such approvals as may be required under state securities or blue sky
laws; the material compliance as to form of such Shelf Registration Statement
and any documents incorporated by reference therein and of the Indenture with
the requirements of the Securities Act and the Trust Indenture Act and the
rules and regulations of the Commission thereunder, respectively; and, as of
the date of the opinion and of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from such Shelf
Registration Statement and the prospectus included therein, as then amended or
supplemented, and from the documents incorporated by reference therein (in each
case other than the financial statements and other financial information
contained therein) of an untrue statement of a material fact or the omission to
state therein a material fact necessary to make the statements therein not
misleading (in the case of such documents, in the light of the circumstances
existing at the time that such documents were filed with the Commission under
the Exchange Act)); (C) obtain a “cold comfort” letter or letters from the
independent certified public accountants of the Company addressed to the
selling Electing Holders, the placement or sales agent, if any, therefor or the
underwriters, if any, thereof, dated (i) the effective date of such Shelf
Registration Statement and (ii) the effective date of any prospectus supplement
to the prospectus included in such Shelf Registration Statement or
post-effective amendment to such Shelf Registration Statement which includes unaudited
or audited financial statements as of a date or for a period subsequent to that
of the latest such statements included in such prospectus (and, if such Shelf
Registration Statement contemplates an underwritten offering pursuant to any
prospectus supplement to the prospectus included in such Shelf Registration
Statement or post-effective

 

17

 

amendment to such Shelf
Registration Statement which includes unaudited or audited financial statements
as of a date or for a period subsequent to that of the latest such statements
included in such prospectus, dated the date of the closing under the
underwriting agreement relating thereto), such letter or letters to be in
customary form and covering such matters of the type customarily covered by
letters of such type; (D) deliver such documents and certificates, including
officers’ certificates, as may be reasonably requested by any Electing Holders
of at least a majority in aggregate principal amount of the Registrable
Securities at the time outstanding or the placement or sales agent, if any,
therefor and the managing underwriters, if any, thereof to evidence the
accuracy of the representations and warranties made pursuant to clause (A)
above or those contained in Section 5(a) hereof and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (E) undertake
such obligations relating to expense reimbursement, indemnification and
contribution as are provided in Section 6 hereof;

 

(xviii)      notify in writing each holder of
Registrable Securities of any proposal by the Company to amend or waive any
provision of this Exchange and Registration Rights Agreement pursuant to
Section 9(h) hereof and of any amendment or waiver effected pursuant thereto,
each of which notices shall contain the text of the amendment or waiver
proposed or effected, as the case may be;

 

(xix)         in the event that any broker-dealer
registered under the Exchange Act shall underwrite any Registrable Securities
or participate as a member of an underwriting syndicate or selling group or
“assist in the distribution” (within the meaning of the Conduct Rules (the “Conduct
Rules) of the National Association of Securities Dealers, Inc. (“NASD”) or any
successor thereto, as amended from time to time) thereof, whether as a holder
of such Registrable Securities or as an underwriter, a placement or sales agent
or a broker or dealer in respect thereof, or otherwise, assist such
broker-dealer in complying with the requirements of such Conduct Rules,
including by (A) if such Conduct Rules shall so require, engaging a “qualified
independent underwriter” (as defined in such Conduct Rules) to participate in
the preparation of the Shelf Registration Statement relating to such
Registrable Securities, to exercise usual standards of due diligence in respect
thereto and, if any portion of the offering contemplated by such Shelf Registration
Statement is an underwritten offering or is made through a placement or sales
agent, to recommend the yield of such Registrable Securities, (B) indemnifying
any such qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 6

 

18

 

hereof (or to such other
customary extent as may be requested by such underwriter), and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Conduct Rules; and

 

(xx)          comply with all applicable rules and
regulations of the Commission, and make generally available to its
securityholders as soon as practicable but in any event not later than eighteen
months after the effective date of such Shelf Registration Statement, an
earning statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act (including, at the option of the Company, Rule 158
thereunder).

 

(e)           In the event that
the Company would be required, pursuant to Section 3(d)(viii)(F) above, to
notify the Electing Holders, the placement or sales agent, if any, therefor and
the managing underwriters, if any, thereof, the Company shall as soon as practicable
prepare and furnish to each of the Electing Holders, to each placement or sales
agent, if any, and to each such underwriter, if any, a reasonable number of
copies of a prospectus supplemented or amended so that, as thereafter delivered
to purchasers of Registrable Securities, such prospectus shall conform in all
material respects to the applicable requirements of the Securities Act and the
Trust Indenture Act and the rules and regulations of the Commission thereunder
and shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.  Each Electing Holder agrees that upon
receipt of any notice from the Company pursuant to Section 3(d)(viii)(F)
hereof, such Electing Holder shall forthwith discontinue the disposition of
Registrable Securities pursuant to the Shelf Registration Statement applicable
to such Registrable Securities until such Electing Holder shall have received
copies of such amended or supplemented prospectus, and if so directed by the
Company, such Electing Holder shall deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies, then in such Electing
Holder’s possession of the prospectus covering such Registrable Securities at
the time of receipt of such notice.

 

(f)            In the event of a
Shelf Registration, in addition to the information required to be provided by
each Electing Holder in its Notice Questionnaire, the Company may require such
Electing Holder to furnish to the Company such additional information regarding
such Electing Holder and such Electing Holder’s intended method of distribution
of Registrable Securities as may be required in order to comply with the
Securities Act.  Each such Electing
Holder agrees to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Electing Holder to the
Company or of the occurrence of any event in either case as a result of which
any prospectus relating to such Shelf Registration contains or would contain an
untrue statement of a material fact regarding such Electing Holder or such
Electing Holder’s intended method of disposition of such Registrable

 

19

 

Securities or
omits to state any material fact regarding such Electing Holder or such
Electing Holder’s intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly to furnish
to the Company any additional information required to correct and update any
previously furnished information or required so that such prospectus shall not
contain, with respect to such Electing Holder or the disposition of such
Registrable Securities, an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

 

(g)           Until the expiration
of two years after the Closing Date, the Company will not, and will not permit
any of its “affiliates” (as defined in Rule 144) to, resell any of the
Securities that have been reacquired by any of them except pursuant to an effective
registration statement under the Securities Act.

 

4.             Registration
Expenses.

 

The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company’s performance of or compliance with this
Exchange and Registration Rights Agreement, including (a) all Commission and
any NASD registration, filing and review fees and expenses, (b) all fees and
expenses in connection with the qualification of the Securities for offering
and sale under the State securities and blue sky laws referred to in Section
3(d)(xii) hereof and determination of their eligibility for investment under
the laws of such jurisdictions as any managing underwriters or the Electing
Holders may designate, including reasonable and documented fees and
disbursements of counsel for the Electing Holders or underwriters in connection
with such qualification and determination, (c) all expenses relating to the
preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the expenses of preparing the Securities for delivery
and the expenses of printing or producing any underwriting agreements,
agreements among underwriters, selling agreements and blue sky or legal
investment memoranda and all other documents in connection with the offering,
sale or delivery of Securities to be disposed of (including certificates
representing the Securities), (d) messenger, telephone and delivery expenses
relating to the offering, sale or delivery of Securities and the preparation of
documents referred in clause (c) above, (e) fees and expenses of the Trustee
under the Indenture, any agent of the Trustee and any counsel for the Trustee
and of any collateral agent or custodian, (f) internal expenses (including all
salaries and expenses of the Company’s officers and employees performing legal or
accounting duties), (g) fees, disbursements and expenses of counsel and independent
certified public accountants of the Company (including the expenses of any
opinions or “cold comfort” letters required by or incident to such performance
and compliance), (h) fees, disbursements and expenses of any “qualified

 

20

 

independent underwriter” engaged pursuant to Section
3(d)(xix) hereof, (i) reasonable and documented fees, disbursements and expenses
of one counsel for the Electing Holders retained in connection with a Shelf
Registration, as selected by the Electing Holders of at least a majority in
aggregate principal amount of the Registrable Securities held by Electing
Holders (which counsel shall be reasonably satisfactory to the Company), (j)
any fees charged by securities rating services for rating the Securities, and
(k) fees, expenses and disbursements of any other persons, including special
experts, retained by the Company in connection with such registration
(collectively, the “Registration Expenses”). 
To the extent that any Registration Expenses are incurred, assumed or
paid by any holder of Registrable Securities or any placement or sales agent
therefor or underwriter thereof, the Company shall reimburse such person for
the full amount of the Registration Expenses so incurred, assumed or paid
promptly after receipt of a request therefor. 
Notwithstanding the foregoing, the holders of the Registrable Securities
being registered shall pay all agency fees and commissions and underwriting discounts
and commissions attributable to the sale of such Registrable Securities and the
fees and disbursements of any counsel or other advisors or experts retained by
such holders (severally or jointly), other than the counsel and experts
specifically referred to above.

 

5.             [Reserved]

 

6.             Indemnification.

 

(a)           Indemnification by the Company.  The Company will indemnify and hold harmless
each of the holders of Registrable Securities included in an Exchange
Registration Statement, each of the Electing Holders of Registrable Securities
included in a Shelf Registration Statement and each person who participates as
a placement or sales agent or as an underwriter in any offering or sale of such
Registrable Securities against any losses, claims, damages or liabilities,
joint or several, to which such holder, agent or underwriter may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
any Exchange Registration Statement or Shelf Registration Statement, as the
case may be, under which such Registrable Securities were registered under the Securities
Act, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such holder, Electing Holder, agent or
underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse such holder, such Electing Holder, such agent
and such underwriter for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the Company
shall not be liable to any such person in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged 

 

21

 

omission made in
such registration statement, or preliminary, final or summary prospectus, or
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by such person expressly for use
therein.

 

(b)           Indemnification by the Holders and any
Agents and Underwriters.  The
Company may require, as a condition to including any Registrable Securities in
any registration statement filed pursuant to Section 2(b) hereof and to
entering into any underwriting agreement with respect thereto, that the Company
shall have received an undertaking reasonably satisfactory to it from the
Electing Holder of such Registrable Securities and from each underwriter named
in any such underwriting agreement, severally and not jointly, to (i) indemnify
and hold harmless the Company, and all other holders of Registrable Securities,
against any losses, claims, damages or liabilities to which the Company or such
other holders of Registrable Securities may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to any such Electing Holder,
agent or underwriter, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by such Electing Holder or underwriter expressly for use
therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however,
that no such Electing Holder shall be required to undertake liability to any
person under this Section 6(b) for any amounts in excess of the dollar amount
of the proceeds to be received by such Electing Holder from the sale of such
Electing Holder’s Registrable Securities pursuant to such registration.

 

(c)           Notices of Claims, Etc.  Promptly after receipt by an
indemnified party under subsection (a) or (b) above of written notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party pursuant to the
indemnification provisions of or contemplated by this Section 6, notify such
indemnifying party in writing of the commencement of such action; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under the
indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof,
except to the extent it has been materially prejudiced by such omissions.  In case any such action shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying

 

22

 

party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory
to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.  No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out
of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(d)           Contribution.  If for any reason the indemnification provisions
contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault and relative benefits of the indemnifying party and the indemnified party
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. 
The relative fault and relative benefits of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.  The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 6(d) were determined by pro rata allocation (even if the
holders or any agents or underwriters or all of them were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 6(d).  The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this
Section 6(d), no holder shall be required to contribute any amount in excess of
the amount by which the dollar amount of the proceeds received by such holder
from the sale of any Registrable Securities (after deducting any fees,
discounts and

 

23

 

commissions
applicable thereto) exceeds the amount of any damages which such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The
holders’ and any underwriters’ obligations in this Section 6(d) to contribute
shall be several in proportion to the principal amount of Registrable Securities
registered or underwritten, as the case may be, by them and not joint.

 

(e)           The obligations of
the Company under this Section 6 shall be in addition to any liability which
the Company may otherwise have and shall extend, upon the same terms and conditions,
to each officer, director and partner of each holder, agent and underwriter and
each person, if any, who controls any holder, agent or underwriter within the
meaning of the Securities Act; and the obligations of the holders and any
agents or underwriters contemplated by this Section 6 shall be in addition to
any liability which the respective holder, agent or underwriter may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Securities Act.

 

7.             Underwritten
Offerings.

 

(a)           Selection of Underwriters.  If any of the Registrable Securities covered
by the Shelf Registration are to be sold pursuant to an underwritten offering,
the managing underwriter or underwriters thereof shall be designated by
Electing Holders holding at least a majority in aggregate principal amount of
the Registrable Securities to be included in such offering, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Company.

 

(b)           Participation by Holders.  Each holder of Registrable Securities hereby
agrees with each other such holder that no such holder may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder’s Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such arrangements
and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.

 

24

 

8.             Rule 144.

 

The Company covenants to the holders of Registrable Securities that to
the extent it shall be required to do so under the Exchange Act, the Company
shall timely file the reports required to be filed by it under the Exchange Act
or the Securities Act (including the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission
under the Securities Act) and the rules and regulations adopted by the
Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission.  Upon the written
request of any holder of Registrable Securities in connection with that
holder’s sale pursuant to Rule 144, the Company shall deliver to such
holder a written statement as to whether it has complied with such requirements.

 

9.             Miscellaneous.

 

(a)           No Inconsistent Agreements.  The Company represents, warrants, covenants
and agrees that it has not granted, and shall not grant, registration rights
with respect to Registrable Securities or any other securities which would be
inconsistent with the terms contained in this Exchange and Registration Rights
Agreement.

 

(b)           Specific Performance.  The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Purchasers and the holders from time to time
of the Registrable Securities may be irreparably harmed by any such failure,
and accordingly agree that the Purchasers and such holders, in addition to any
other remedy to which they may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of the Company under
this Exchange and Registration Rights Agreement in accordance with the terms
and conditions of this Exchange and Registration Rights Agreement, in any court
of the United States or any State thereof having jurisdiction.

 

(c)           Notices.  All notices, requests, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, if delivered personally
or by courier, or three days after being deposited in the mail (registered or
certified mail, postage prepaid, return receipt requested) as follows:  If to the Company, to it at 222 Berkeley
Street, Boston, Massachusetts 02116, Attention: Office of General Counsel, and
if to a holder, to the address of such holder set forth in the security
register or other records of the Company, or to such other address as the
Company

 

25

 

or any such holder
may have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.

 

(d)           Parties in Interest.  All the terms and provisions of this
Exchange and Registration Rights Agreement shall be binding upon, shall inure
to the benefit of and shall be enforceable by the parties hereto and the holders
from time to time of the Registrable Securities and the respective successors
and assigns of the parties hereto and such holders.  In the event that any transferee of any holder of Registrable
Securities shall acquire Registrable Securities, in any manner, whether by
gift, bequest, purchase, operation of law or otherwise, such transferee shall,
without any further writing or action of any kind, be deemed a beneficiary
hereof for all purposes and such Registrable Securities shall be held subject
to all of the terms of this Exchange and Registration Rights Agreement, and by
taking and holding such Registrable Securities such transferee shall be
entitled to receive the benefits of, and be conclusively deemed to have agreed
to be bound by all of the applicable terms and provisions of this Exchange and
Registration Rights Agreement.  If the
Company shall so request, any such successor, assign or transferee shall agree
in writing to acquire and hold the Registrable Securities subject to all of the
applicable terms hereof.

 

(e)           Survival.  The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Exchange
and Registration Rights Agreement or made pursuant hereto shall remain in full
force and effect regardless of any investigation (or statement as to the
results thereof) made by or on behalf of any holder of Registrable Securities,
any director, officer or partner of such holder, any agent or underwriter or
any director, officer or partner thereof, or any controlling person of any of
the foregoing, and shall survive delivery of and payment for the Registrable
Securities pursuant to the Purchase Agreement and the transfer and registration
of Registrable Securities by such holder and the consummation of an Exchange Offer.

 

(f)            Governing
Law.  This Exchange and
Registration Rights Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

 

(g)           Headings.  The descriptive headings of the several
Sections and paragraphs of this Exchange and Registration Rights Agreement are
inserted for convenience only, do not constitute a part of this Exchange and
Registration Rights Agreement and shall not affect in any way the meaning or
interpretation of this Exchange and Registration Rights Agreement.

 

(h)           Entire Agreement; Amendments.  This Exchange and Registration Rights
Agreement and the other writings referred to herein (including the Indenture
and the form of Securities) or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter.  This Exchange and
Registration

 

26

 

Rights Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter.  This Exchange
and Registration Rights Agreement may be amended and the observance of any term
of this Exchange and Registration Rights Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and
the holders of at least a majority in aggregate principal amount of the
Registrable Securities at the time outstanding.  Each holder of any Registrable Securities at the time or
thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 9(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or
is delivered to such holder.

 

(i)            Inspection.  For so long as this Exchange and
Registration Rights Agreement shall be in effect, this Exchange and
Registration Rights Agreement and a complete list of the names and addresses of
all the holders of Registrable Securities shall be made available for
inspection and copying during business hours on any business day by any holder
of Registrable Securities for proper purposes only (which shall include any
purpose related to the rights of the holders of Registrable Securities under
the Securities, the Indenture and this Agreement) at the offices of the Company
at the address thereof set forth in Section 9(c) above and at the office of the
Trustee under the Indenture.

 

(j)            Counterparts.  This agreement may be executed by the
parties in counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.

 

27

 

If the foregoing is in
accordance with your understanding, please sign and return to us, five
counterparts hereof, and upon the acceptance hereof by you, on behalf of each
of the Purchasers, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Purchasers and the Company.  It is understood that your acceptance of
this letter on behalf of each of the Purchasers is pursuant to the authority
set forth in a form of Agreement Among Purchasers, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.

 

	
   

  	
  Very truly yours,

  
	
   

  	
  Houghton Mifflin
  Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Accepted as of the date
  hereof:

  	
   

  
	
  Goldman, Sachs &
  Co.

  	
   

  
	
  CIBC World Markets
  Corp.

  	
   

  
	
  Deutsche Bank
  Securities Inc.

  	
   

  
	
  Fleet Securities, Inc.

  	
   

  
	
   

  	
  As Representatives of the several 

  Purchasers named in Schedule I 

  to the Purchase Agreement

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  (Goldman, Sachs &
  Co.)

  	
   

  	
   

  
	
   

  	
   

  
						

 

28

 

Exhibit
A

Houghton Mifflin Company

 

INSTRUCTION TO DTC PARTICIPANTS

 

(Date of Mailing)

 

URGENT - IMMEDIATE ATTENTION REQUESTED

 

DEADLINE FOR RESPONSE:  [DATE]a

 

The Depository Trust Company (“DTC”) has identified you as a DTC
Participant through which beneficial interests in the Houghton Mifflin Company
(the “Company”) 8.250% Senior Notes due 2011 (the “Securities”) are held.

 

The Company is in the process of registering the Securities under the
Securities Act of 1933 for resale by the beneficial owners thereof.  In order to have their Securities included
in the registration statement, beneficial owners must complete and return the enclosed
Notice of Registration Statement and Selling Securityholder Questionnaire.

 

It is
important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to
have the Securities included in the registration statement depend upon their
returning the Notice and Questionnaire by [Deadline For Response].  Please forward a copy of the enclosed
documents to each beneficial owner that holds interests in the Securities
through you.  If you require more copies
of the enclosed materials or have any questions pertaining to this matter,
please contact Houghton Mifflin Company via mail at 222 Berkeley Street,
Boston, Massachusetts 02116, Attention: Office of General Counsel, or by
telephone at (617) 351-5000.

 

a     Not less than 18 days from date of mailing.

 

A-1

 

Houghton
Mifflin Company

 

Notice of Registration Statement

and

Selling Securityholder Questionnaire

 

(Date)

 

Reference is hereby made to the Exchange and Registration Rights
Agreement (the “Exchange and Registration Rights Agreement”) between Houghton
Mifflin Company (the “Company”) and the Purchasers named therein.  Pursuant to the Exchange and Registration
Rights Agreement, the Company has filed with the United States Securities and
Exchange Commission (the “Commission”) a registration statement on
Form [   ] (the “Shelf Registration Statement”) for the
registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the 8.250% Senior Notes due 2011 (the
“Securities”).  A copy of the Exchange
and Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Exchange and Registration Rights Agreement.

 

Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included
in the Shelf Registration Statement.  In
order to have Registrable Securities included in the Shelf Registration
Statement, this Notice of Registration Statement and Selling Securityholder
Questionnaire (“Notice and Questionnaire”) must be completed, executed and
delivered to the Company’s counsel at the address set forth herein for receipt
ON OR BEFORE [Deadline for Response]. 
Beneficial owners of Registrable Securities who do not complete, execute
and return this Notice and Questionnaire by such date (i) will not be
named as selling securityholders in the Shelf Registration Statement and
(ii) may not use the Prospectus forming a part thereof for resales of
Registrable Securities.

 

Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners
of Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.

 

The term “Registrable Securities” is defined in the Exchange and
Registration Rights Agreement.

 

A-2

 

ELECTION

 

The undersigned holder (the “Selling Securityholder”) of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in
Item (3).  The undersigned, by
signing and returning this Notice and Questionnaire, agrees to be bound with
respect to such Registrable Securities by the terms and conditions of this
Notice and Questionnaire and the Exchange and Registration Rights Agreement,
including, without limitation, Section 6 of the Exchange and Registration
Rights Agreement, as if the undersigned Selling Securityholder were an original
party thereto.

 

Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and Trustee the Notice of Transfer set forth in Appendix A
to the Prospectus and as Exhibit B to the Exchange and Registration Rights
Agreement.

 

The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:

 

A-3

 

QUESTIONNAIRE

 

	
  (1)

  	
  (a)

  	
   

  	
  Full Legal Name of Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Full Legal Name of Registered Holder (if not the same as in (a) above)
  of Registrable Securities Listed in Item (3) below:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Full Legal Name of DTC Participant (if applicable and if not the same
  as (b) above) Through Which Registrable Securities Listed in Item (3) below
  are Held:

  
	
   

  	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
   

  	
  Address for Notices to Selling Securityholder:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Fax:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Contact Person:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (3)

  	
  Beneficial Ownership of Securities:

  
	
   

  	
   

  
	
   

  	
  Except as set forth below in this Item (3), the undersigned does
  not beneficially own any Securities.

  
	
   

  	
   

  
	
   

  	
  (a)

  	
   

  	
  Principal amount of Registrable Securities beneficially owned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CUSIP No(s). of such Registrable Securities:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  Principal amount of Securities other than Registrable Securities
  beneficially owned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CUSIP No(s). of such other Securities:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
   

  	
  Principal amount of Registrable Securities which the undersigned wishes
  to be included in the 

  
	
   

  	
   

  	
   

  	
  Shelf Registration Statement:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CUSIP No(s). of such Registrable Securities to be included in the Shelf
  Registration Statement:

  
												

 

A-4

 

(4)                    Beneficial Ownership of Other Securities of the Company:

 

Except as set forth below in
this Item (4), the undersigned Selling Securityholder is not the
beneficial or registered owner of any other securities of the Company, other
than the Securities listed above in Item (3).

 

State any exceptions here:

 

(5)       Relationships
with the Company:

 

Except as set forth below,
neither the Selling Securityholder nor any of its affiliates, officers,
directors or principal equity holders (5% or more) has held any position or
office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.

 

State any exceptions here:

 

(6)                    Plan of Distribution:

 

Except as set forth below,
the undersigned Selling Securityholder intends to distribute the Registrable
Securities listed above in Item (3) only as follows (if at all):  Such Registrable Securities may be sold from
time to time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents.  Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale, or at
negotiated prices.  Such sales may be
effected in transactions (which may involve crosses or block transactions) (i)
on any national securities exchange or quotation service on which the
Registered Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing of
options.  In connection with sales of
the Registrable Securities or otherwise, the Selling Securityholder may enter
into hedging transactions with broker-dealers, which may in turn engage in
short sales of the Registrable Securities in the course of hedging the
positions they assume.  The Selling
Securityholder may also sell Registrable Securities short and deliver
Registrable Securities to close out such short positions, or loan or pledge
Registrable Securities to broker-dealers that in turn may sell such securities.

 

State any exceptions here:

 

By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.

 

A-5

 

In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to the Company, the Selling
Securityholder agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Notice and Questionnaire and the
Exchange and Registration Rights Agreement.

 

By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through
(6) above and the inclusion of such information in the Shelf Registration
Statement and related Prospectus.  The
Selling Securityholder understands that such information will be relied upon by
the Company in connection with the preparation of the Shelf Registration
Statement and related Prospectus.

 

In accordance with the Selling Securityholder’s obligation under
Section 3(d) of the Exchange and Registration Rights Agreement to provide
such information as may be required by law for inclusion in the Shelf
Registration Statement, the Selling Securityholder agrees to promptly notify
the Company of any inaccuracies or changes in the information provided herein
which may occur subsequent to the date hereof at any time while the Shelf
Registration Statement remains in effect. 
All notices hereunder and pursuant to the Exchange and Registration
Rights Agreement shall be made in writing, by hand-delivery, first-class mail,
or air courier guaranteeing overnight delivery as follows:

 

	
  (i)

  	
  To the Company:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Houghton Mifflin Company

  
	
   

  	
   

  	
  222 Berkeley Street

  
	
   

  	
   

  	
  Boston, Massachusetts 02116

  
	
   

  	
   

  	
  Attention: Office of General Counsel

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
  With a copy to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

A-6

 

Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company’s counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein,
shall be binding on, shall inure to the benefit of and shall be enforceable by
the respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above.  This Agreement shall be
governed in all respects by the laws of the State of New York.

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Selling Securityholder

  
	
   

  	
  (Print/type full legal
  name of beneficial owner of Registrable Securities)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

A-7

 

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY’S
COUNSEL AT:

 

Houghton Mifflin
Company

222 Berkeley
Street

Boston,
Massachusetts 02116

Attention: Office
of General Counsel

 

A-8

 

Exhibit
B

NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

 

Wells Fargo Bank Minnesota, N.A.

Houghton Mifflin Company

c/o Joseph O’Donnell

213 Court St., Suite 703

Middletown, Connecticut 06457

 

Attention:  Trust Officer

 

Re:          Houghton
Mifflin Company (the “Company”)

8.250% Senior Notes due 2011

 

Dear Sirs:

 

Please be advised that
                             
has transferred $                             
aggregate principal amount of the above-referenced Notes pursuant to an
effective Registration Statement on Form [              ]
(File
No. 333-             )
filed by the Company.

 

We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied and that the
above-named beneficial owner of the Notes is named as a “Selling Holder” in the
Prospectus dated [date] or in supplements thereto, and that the aggregate
principal amount of the Notes transferred are the Notes listed in such
Prospectus opposite such owner’s name.

 

Dated:

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized Signature)

  

 

 

B-1Exhibit 4.7

 

 

 

 

HOUGHTON MIFFLIN COMPANY

TO

 

THE FIRST NATIONAL BANK OF BOSTON

Trustee

 

 

Indenture

 

Dated as of March 15, 1994

 

 

 

 

 

HOUGHTON MIFFLIN COMPANY

 

Reconciliation
and tie between Trust Indenture Act of 1939 and Indenture, dated as of March 15,
1994

 

	
  Trust Indenture 

  Act Section

  	
   

  	
  Indenture
  Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (S) 310(a)(1)

  	
   

  	
  609

  	
   

  
	
  (a)(2)

  	
   

  	
  609

  	
   

  
	
  (a)(3)

  	
   

  	
  Not Applicable

  	
   

  
	
  (a)(4)

  	
   

  	
  Not Applicable

  	
   

  
	
  (b)

  	
   

  	
  608

  	
   

  
	
  (S) 311(a)

  	
   

  	
  610

  	
   

  
	
  (b)

  	
   

  	
  610

  	
   

  
	
  (b)(2)

  	
   

  	
  610

  	
   

  
	
  (S) 312(a)

  	
   

  	
  701

  	
   

  
	
  (b)

  	
   

  	
  702(b)

  	
   

  
	
  (c)

  	
   

  	
  702(c)

  	
   

  
	
  (S) 313(a)

  	
   

  	
  703

  	
   

  
	
  (b)

  	
   

  	
  703

  	
   

  
	
  (c)

  	
   

  	
  703

  	
   

  
	
  (d)

  	
   

  	
  703

  	
   

  
	
  (S) 314(a)

  	
   

  	
  Not Applicable

  	
   

  
	
  (b)

  	
   

  	
  Not Applicable

  	
   

  
	
  (c)(1)

  	
   

  	
  102

  	
   

  
	
  (c)(2)

  	
   

  	
  102

  	
   

  
	
  (c)(3)

  	
   

  	
  Not Applicable

  	
   

  
	
  (d)

  	
   

  	
  Not Applicable

  	
   

  
	
  (e)

  	
   

  	
  102

  	
   

  
	
  (S) 315(a)

  	
   

  	
  Not Applicable

  	
   

  
	
  (b)

  	
   

  	
  Not Applicable

  	
   

  
	
  (c)

  	
   

  	
  Not Applicable

  	
   

  
	
  (d)

  	
   

  	
  Not Applicable

  	
   

  
	
  (d)(1)

  	
   

  	
  Not Applicable

  	
   

  
	
  (d)(2)

  	
   

  	
  Not Applicable

  	
   

  
	
  (d)(3)

  	
   

  	
  Not Applicable

  	
   

  
	
  (e)

  	
   

  	
  514

  	
   

  
	
  (S) 316(a)

  	
   

  	
  104

  	
   

  
	
  (a)(1)(A)

  	
   

  	
  502

  	
   

  
	
   

  	
   

  	
  512

  	
   

  
	
  (a)(1)(B)

  	
   

  	
  513

  	
   

  
	
  (a)(2)

  	
   

  	
  Not Applicable

  	
   

  
	
  (b)

  	
   

  	
  508

  	
   

  
	
  (S) 317(a)(1)

  	
   

  	
  503

  	
   

  
	
  (a)(2)

  	
   

  	
  504

  	
   

  
	
  (b)

  	
   

  	
  1003

  	
   

  
	
  (S) 318(a)

  	
   

  	
  108

  	
   

  

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

 

 

TABLE OF CONTENTS

 

	
  RECITALS
  OF THE COMPANY

  	
   

  
	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  
	
  DEFINITIONS
  AND OTHER PROVISIONS OF GENERAL APPLICATION

  
	
   

  
	
  Section 101.

  	
  Definitions

  
	
   

  	
   

  
	
   

  	
  Act

  
	
   

  	
  Affiliate

  
	
   

  	
  Attributable
  Debt

  
	
   

  	
  Authenticating
  Agent

  
	
   

  	
  Board of
  Directors

  
	
   

  	
  Board Vote

  
	
   

  	
  Book-Entry
  Security

  
	
   

  	
  Business Day

  
	
   

  	
  Commission

  
	
   

  	
  Common Stock

  
	
   

  	
  Company

  
	
   

  	
  Company Request;
  Company Order

  
	
   

  	
  Corporate
  Trust Office

  
	
   

  	
  corporation

  
	
   

  	
  Defaulted
  Interest

  
	
   

  	
  Depository

  
	
   

  	
  Dollar or $

  
	
   

  	
  Euro-clear

  
	
   

  	
  Event of
  Default

  
	
   

  	
  Exchange Date

  
	
   

  	
   

  
	
   

  	
  Funded Debt

  
	
   

  	
  Global Security

  
	
   

  	
  Holder

  
			

 

NOTE:
This table of contents shall not, for any purpose, be deemed to be a part of
the Indenture.

 

i

 

 

	
   

  	
  Indenture

  
	
   

  	
  interest

  
	
   

  	
  Interest
  Payment Date

  
	
   

  	
  Maturity

  
	
   

  	
  Officers’
  Certificate

  
	
   

  	
  Opinion of
  Counsel

  
	
   

  	
  Original Issue

  
	
   

  	
  Discount Security

  
	
   

  	
  Outstanding

  
	
   

  	
  Paying Agent

  
	
   

  	
  Person

  
	
   

  	
  Place of
  Payment

  
	
   

  	
  Predecessor
  Security

  
	
   

  	
  Principal; principal amount

  
	
   

  	
  Redemption Date

  
	
   

  	
  Redemption
  Price

  
	
   

  	
  Registered
  Security

  
	
   

  	
  Regular
  Record Date

  
	
   

  	
  Responsible
  Officer

  
	
   

  	
  Securities

  
	
   

  	
  Security Register

  
	
   

  	
  Security
  Registrar

  
	
   

  	
  Special
  Record Date

  
	
   

  	
  Stated Maturity

  
	
   

  	
  Subsidiary

  
	
   

  	
  Trustee

  
	
   

  	
  Trust
  Indenture Act

  
	
   

  	
  United States

  
	
   

  	
  United
  States Alien

  
	
   

  	
  U.S. Government
  Obligations

  
	
   

  	
  Vice President

  
	
   

  	
  Yield to
  Maturity

  
	
   

  	
   

  
	
  Section 102.

  	
  Compliance Certificates
  and Opinions

  
	
  Section 103.

  	
  Form of Documents
  Delivered to Trustee

  
	
  Section 104.

  	
  Acts of Holders

  
	
  Section 105.

  	
  Notices, Etc., to
  Trustee and Company

  
	
  Section 106.

  	
  Notice to Holders of
  Securities; Waiver

  
	
  Section 107.

  	
  Language of Notices, Etc

  
	
  Section 108.

  	
  Conflict with Trust
  Indenture Act

  
	
  Section 109.

  	
  Effect of Headings and
  Table of Contents

  
	
  Section 110.

  	
  Successors and Assigns

  
	
  Section 111.

  	
  Separability Clause

  
	
  Section 112.

  	
  Benefits of Indenture

  
	
  Section 113.

  	
  Governing Law

  
	
  Section 114.

  	
  Legal Holidays

  

 

ii

 

	
  ARTICLE II

  
	
   

  
	
  SECURITY FORMS

  
	
   

  	
   

  
	
  Section 201.

  	
  Forms Generally

  
	
  Section 202.

  	
  Form of Trustee’s
  Certificate of Authentication

  
	
  Section 203.

  	
  Securities in Global
  Form

  
	
  Section 204.

  	
  Form of Legend for
  Book-Entry Securities

  
	
  Section 205.

  	
  Additional Provisions
  Required in Global Security

  
	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  THE SECURITIES

  
	
   

  	
   

  
	
  Section 301.

  	
  Amount Unlimited;
  Issuable in Series

  
	
  Section 302.

  	
  Denominations

  
	
  Section 303.

  	
  Execution,
  Authentication, Delivery and Dating

  
	
  Section 304.

  	
  Temporary Securities

  
	
  Section 305.

  	
  Registration,
  Registration of Transfer and Exchange

  
	
  Section 306.

  	
  Mutilated, Destroyed,
  Lost and Stolen Securities

  
	
  Section 307.

  	
  Payment of Interest;
  Interest Rights Preserved

  
	
  Section 308.

  	
  Persons Deemed Owners

  
	
  Section 309.

  	
  Cancellation

  
	
  Section 310.

  	
  Computation of Interest

  
	
  Section 311.

  	
  Electronic Security
  Issuance

  
	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  SATISFACTION AND DISCHARGE

  
	
   

  	
   

  
	
  Section 401.

  	
  Satisfaction and
  Discharge of Indenture

  
	
  Section 402.

  	
  Application of Trust
  Money

  
	
  Section 403.

  	
  Satisfaction, Discharge
  and Defeasance of Securities of any Series

  
			

 

iii

 

	
  ARTICLE V

  
	
   

  
	
  REMEDIES

  
	
   

  	
   

  
	
  Section 501.

  	
  Events of Default

  
	
  Section 502.

  	
  Acceleration of
  Maturity; Rescission and Annulment

  
	
  Section 503.

  	
  Collection of
  Indebtedness and Suits for Enforcement by Trustee

  
	
  Section 504.

  	
  Trustee May File Proofs
  of Claim

  
	
  Section 505.

  	
  Trustee May Enforce
  Claims Without Possession of Securities

  
	
  Section 506.

  	
  Application of Money
  Collected

  
	
  Section 507.

  	
  Limitation on Suits

  
	
  Section 508.

  	
  Unconditional Right of
  Holders to Receive Principal, Premium and Interest

  
	
  Section 509.

  	
  Restoration of Rights
  and Remedies

  
	
  Section 510.

  	
  Rights and Remedies
  Cumulative

  
	
  Section 511.

  	
  Delay or Omission Not
  Waiver

  
	
  Section 512.

  	
  Control by Holders of
  Securities

  
	
  Section 513.

  	
  Waiver of Past Defaults

  
	
  Section 514.

  	
  Undertaking for Costs

  
	
  Section 515.

  	
  Waiver of Stay or
  Extension Laws

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  THE TRUSTEE

  
	
   

  	
   

  
	
  Section 601.

  	
  Certain Rights of
  Trustee

  
	
  Section 602.

  	
  Not Responsible for
  Recitals or Issuance of Securities

  
	
  Section 603.

  	
  May Hold Securities

  
	
  Section 604.

  	
  Money Held in Trust

  
	
  Section 605.

  	
  Compensation and
  Reimbursement

  
	
  Section 606.

  	
  Resignation and Removal;
  Appointment of Successor

  
	
  Section 607.

  	
  Acceptance of
  Appointment by Successor

  
	
  Section 608.

  	
  Disqualification;
  Conflicting Interests

  
	
  Section 609.

  	
  Corporate Trustee
  Required; Eligibility

  
	
  Section 610.

  	
  Preferential Collection
  of Claims Against Company

  
	
  Section 611.

  	
  Merger, Conversion,
  Consolidation or Succession to Business

  
	
  Section 612.

  	
  Appointment of
  Authenticating Agent

  
			

 

iv

 

	
  ARTICLE VII

  
	
   

  
	
  HOLDERS’
  LISTS AND REPORTS BY TRUSTEE AND COMPANY

  
	
   

  	
   

  
	
  Section 701

  	
  Company to Furnish
  Trustee Names and Addresses of Holders

  
	
  Section 702.

  	
  Preservation of
  Information; Communications to Holders

  
	
  Section 703.

  	
  Reports by Trustee

  
	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  
	
  CONSOLIDATION,
  MERGER, SALE, LEASE, TRANSFER OR OTHER DISPOSITION

  
	
   

  	
   

  
	
  Section 801.

  	
  Company May Consolidate,
  Etc. Only on Certain Terms

  
	
  Section 802.

  	
  Successor Substituted

  
	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  
	
  Section 901.

  	
  Supplemental Indentures
  Without Consent of Holders

  
	
  Section 902.

  	
  Supplemental Indentures
  with Consent of Holders

  
	
  Section 903.

  	
  Execution of
  Supplemental Indentures

  
	
  Section 904.

  	
  Effect of Supplemental
  Indentures

  
	
  Section 905.

  	
  Conformity with Trust
  Indenture Act

  
	
  Section 906.

  	
  Reference in Securities
  to Supplemental Indentures

  
	
   

  	
   

  
	
   

  	
   

  
	
  ARTICLE X

  
	
   

  
	
  COVENANTS

  
	
   

  
	
  Section 10001.

  	
  Payment of Principal,
  Premium and Interest

  
	
  Section 10002.

  	
  Maintenance of Office
  or Agency

  
	
  Section 10003.

  	
  Money for Securities
  Payments to Be Held in Trust

  
	
  Section 10004.

  	
  Additional Amounts

  
	
  Section 10005.

  	
  Existence

  
	
  Section 10006.

  	
  [Intentionally
  Omitted]

  
	
  Section 10007.

  	
  Limitation on Liens

  
	
  Section 10008.

  	
  Limitation on Sale and
  Lease-Back Transactions

  
			

 

v

 

	
  Section 10009.

  	
  Statement by Officers
  as to Default

  
	
  Section 10010.

  	
  Waiver of Certain
  Covenants

  
	
  Section 10011.

  	
  Defeasance of Certain
  Obligations

  
	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  	
   

  
	
  REDEMPTION OF SECURITIES

  
	
   

  	
   

  
	
  Section 1101.

  	
  Applicability of
  Article

  
	
  Section 1102.

  	
  Election to Redeem;
  Notice to Trustee

  
	
  Section 1103.

  	
  Selection by Trustee
  of Securities to Be Redeemed

  
	
  Section 1104.

  	
  Notice of Redemption

  
	
  Section 1105.

  	
  Deposit of Redemption
  Price

  
	
  Section 1106.

  	
  Securities Payable on
  Redemption Date

  
	
  Section 1107.

  	
  Securities Redeemed in
  Part

  
	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  	
   

  
	
  SINKING FUNDS

  
	
   

  	
   

  
	
  Section 1201.

  	
  Applicability of
  Article

  
	
  Section 1202.

  	
  Satisfaction of
  Sinking Fund Payments with Securities

  
	
  Section 1203.

  	
  Redemption of
  Securities for Sinking Fund

  
	
  Exhibit A.

  	
  Form of Registered Security
  Which Is Not An Original Issue Discount Security

  
	
  Exhibit B.

  	
  Form of Registered Security
  Which Is An Original Issue Discount Security

  
	
  Exhibit C.

  	
  Forms of Certification

  

 

vi

 

INDENTURE,
dated as of March 15, 1994, between Houghton Mifflin Company, a corporation
duly organized and existing under the laws of the Commonwealth of Massachusetts
(herein called the “Company”), having its principal office at One Beacon
Street, Boston, Massachusetts 02108, and The First National Bank of Boston, a
national banking association, 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 “Secu- rities”), to be
issued in one or more series as in this Indenture provided.

 

All
things necessary to make this Indenture a valid 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 a series thereof, as follows:

 

ARTICLE I

 

DEFINITIONS
AND OTHER PROVISIONS

OF GENERAL APPLICATION

 

SECTION 101.       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 generally
accepted accounting principles in the United States of America, 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 in the United States of America at the
date of this instrument; and

 

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

 

Certain
terms used principally in Article Six are defined in that Article. “Act”, when used with respect to any Holder of a Security, has the
meaning specified in Section 104.

 

“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.

 

“Attributable Debt” shall mean, at the time of
determination, the present value (discounted at the interest rate, compounded
semiannually, equal to the weighted average Yield to Maturity of the Securities
then Outstanding hereunder, such average being weighted by the principal amount
of the Securities of each series or, in the case of Original Issue Discount
Securities, such

 

2

 

amount
to be determined as provided in the definition of “Outstanding”) of the
obligation of a lessee for net rental payments during the remaining term of any
lease (including any period for which such lease has been extended) entered
into in connection with a sale and lease-back transaction.

 

“Authenticating Agent” means any Person authorized
by the Trustee pursuant to Section 612 to act on behalf of the Trustee to
authenticate Securities of one or more series.

 

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

 

“Board Vote” means a copy of a vote certified by the
Secretary and Clerk or by an Assistant Clerk 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.

 

“Book-Entry Security” means a Security bearing the
legend specified in Section 204, evidencing all or part of a series of
Securities, issued to the Depository for such series or its nominee, and
registered in the name of such Depository or nominee.  Book-Entry Securities shall not be deemed to be securities in
global form for purposes of Sections 201 and 203 and Article Three of the
Indenture.

 

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

 

“Commission” means the Securities and Exchange Commission,
as from time to time constituted, created under the Securities Exchange Act of
1934, 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.

 

3

 

“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.

 

“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
and President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary and Clerk or by an Assistant Clerk, and delivered to
the Trustee.

 

“Corporate Trust Office” means the principal
office of the Trustee at which at any particular time its corporate trust
business shall be administered. 

 

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

 

“Defaulted Interest” has the meaning specified in
Section 307.

 

“Depository” means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more
Book-Entry Securities, the clearing agency registered under the Securities
Exchange Act of 1934, as amended, specified for that purpose as contemplated by
Section 301.

 

“Dollar” or “$” means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts.

 

“Euro-clear” means the operator of the Euro-clear System.

 

“Event of Default” has the meaning specified in Section
501.

 

4

 

“Exchange Date” has the meaning specified in Section 304.

 

“Funded Debt” shall mean indebtedness for money borrowed
which by its terms matures at, or is extendible or renewable at the option of
the obligor, to a date more than twelve months after the date of the creation
of such indebtedness.

 

“Global Security” means a Security in the form
prescribed in Section 205 evidencing all or part of a series of Securities,
issued to the Depository for such series or its nominee, and registered in the
name of such Depository or nominee.

 

“Holder”, when used with respect to any Security, means in the
case of a Registered Security, the Person in whose name the Security is
registered in the Security Register.

 

“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 and shall include the terms of particular series of
Securities established as contemplated by Section 301.

 

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

 

“Interest Payment Date”, when used with respect to
any Security, means the Stated Maturity of an installment of interest on such
Security.

 

“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.

 

“Officers’ Certificate” means a certificate signed
by the Chairman of the Board and the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary and Clerk or by an Assistant
Clerk, of the

 

5

 

Company,
and delivered to the Trustee.  One of
the Officers signing an Officers’ Certificate given pursuant to Section 1009
shall be the principal executive, financial or accounting officer of the
Company.

 

“Opinion of Counsel” means a written opinion of
counsel, who may be counsel for the Company, and who shall be reasonably
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 502.

 

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

 

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

 

(ii)           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
appertaining thereto; provided that, if such Securities are 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; and

 

(iii)          Securities
which have been paid pursuant to Section 306 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;

 

6

 

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 (i) 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 pursuant to Section 502, and (ii)
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 the Trustee 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 and any premium and interest on any Securities on
behalf of the Company.

 

“Person” means any individual, corporation, partnership, joint
venture, 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, subject to the
provisions of Section 1002, the principal of and any premium and interest on
the Securities of that series are payable as specified as contem-plated by
Section 301.

 

“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 306 in exchange
for or in lieu of a mutilated, destroyed, lost

 

7

 

or
stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.

 

“Principal” or “principal amount” means, with respect to (a)
any security that is not (1) an Original Issue Discount Security or (2) an
Original Issue Discount Security with respect to which interest has commenced
accruing at regularly scheduled intervals and not as a result of any failure to
pay amounts due as a result of acceleration of maturity, redemption or
repurchase, the stated principal amount of such Security due at maturity [plus
the premium, if any, on such Security] and (b) with respect an any Original
Issue Discount Security, except as provided in clause (a) above, with respect
to (1) the determination of Holders entitled to Act with respect to any matter,
the amount of principal of such Securities payable as of the date of
determination upon acceleration of Maturity and (2) any amount to be paid with
respect to such Securities other than (A) amounts payable after the date on
which original issue discount ceases to accrete as described in clause (a)(2)
above or (B) at maturity (and other than interest, if any, or premium, if any,
thereon), the accreted value of such Securities as of the date of payment.

 

“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 this Indenture.

 

“Registered Security” means any Security in the form
set forth in either Exhibit A or Exhibit B to this Indenture or established
pursuant to Section 201 which is registered in the Security Register.

 

“Regular Record Date” for the interest payable on any
Interest Payment Date on the Registered Securities of any series means the date
specified for that purpose as contemplated by Section 301.

 

“Responsible Officer”, when used with respect to the
Trustee, means any officer in the Corporate Trust Department or any other
officer of the Trustee customarily

 

8

 

performing
functions similar to those performed by any of such officers and also means,
with respect to a particular corporate trust matter, any other officer of the
Trustee to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.

 

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

 

“Security Register” and “Security Registrar” have the
respective meanings specified in Section 305.

 

“Special Record Date” for the payment of any
Defaulted Interest on the Registered Securities of any series means a date
fixed by the Trustee pursuant to Section 307.

 

“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” shall
mean any corporation of which at least a majority of the outstanding stock
having by the terms thereof ordinary voting power to elect a majority of the
board of directors of such corporation (whether or not at the time stock of any
other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by the Company, or by one or more Subsidiaries,
or by the Company and one or more Subsidiaries.

 

“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 the Trustee with respect to
Securities of that series.

 

9

 

“Trust Indenture Act” means the 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 Trust Indenture Act of 1939 is amended
after such date, “Trust Indenture Act” means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

 

“United States” means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.

 

“United States Alien” means any Person who, for
United States Federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of which
is, for United States Federal income tax purposes, a foreign corporation, a
non-resident alien individual or a non-resident alien fiduciary of a foreign
estate or trust.

 

“U.S. 
Government Obligations” means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Sec- tion 3(a)(2) of the Securities Act of 1933, as
amended) as custodian with respect to any such U.S.  Government Obligations or a specific payment of or interest on
any such U.S.  Government Obligations
held by such custodian for the account of the holder of such depository
receipt, 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
depository receipt from any amount received by the custodian in respect of the
U.S.  Government Obligations or the
specific payment of principal of or interest on the U.S.  Government Obligations evidenced by such
depository receipt.

 

10

 

“Vice President”, when used with respect to the Company
or the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title “vice president”.

 

“Yield to Maturity” means the yield to maturity on a
series of securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.

 

SECTION
102.       Compliance
Certificates and Opinions.

 

Except
as otherwise expressly provided by this Indenture, 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 an Officers’ Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

 

Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture except for certificates provided for in Section
1009 shall include:

 

(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 has made such
examination or investigation as is necessary to enable

 

11

 

him
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

 

(4)           a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.

 

SECTION
103.       Form
of Documents Delivered to Trustee.

 

In
any case where several matters are required to be certified 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 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 representa- tions by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows 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
104        Acts
of Holders.

 

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or

 

12

 

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 an agent duly appointed in writing.  Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is herein expressly
required, to the Company.  Such
instrument or instruments and any such record (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 or proxy, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.

 

(b)           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 the execution
thereof.  Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
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.

 

(c)           The principal amount and serial
numbers of Registered Securities held by any Person, and the date of holding
the same, shall be proved by the Security Register.

 

(d)           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

 

13

 

such
action is made upon such Security. 
Nothing in this Section 104(d) shall be construed to limit the right of
Holders to take action which shall bind Holders of all Securities as expressly
provided herein.

 

(e)           With respect to the Securities of any
Series all or part of which are represented by Book-Entry Securities, the
following provisions shall apply:

 

(1)           Upon
receipt by the Trustee of (i) any written notice directing the time, method or
place of conducting any proceeding or exercising any trust or power pursuant to
Section 512 with respect to Securities of such series or (ii) any written
demand, request or notice with respect to any matter on which the Holders of
Securities of such series are entitled to act under this Indenture, in each
case from Holders of less than, or proxies representing less than, the
requisite principal amount of Outstanding Securities or such series entitled to
give such demand, request or notice, the Trustee shall establish a record date
for determining Holders of Outstanding Securities of such series entitled to
join in such demand, request or notice, which record date shall be the close of
business on the day the Trustee received such demand, request or notice.  The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such demand, request or notice whether or not such Holders remain Holders after
such record date; provid- ed, however, that unless the Holders of the requisite
principal amount of Outstanding Securities of such series shall have joined in
such demand, request or notice prior to the day which is the 90th day after
such record date, such demand, request or notice shall automatically and
without further action by any Holder be canceled and of no further effect.  Nothing in this paragraph shall prevent a Holder,
or a proxy of a Holder, from giving, (i) after the expiration of such 90-day
period, a new demand, request or notice identical to a demand, request or
notice which has been canceled pursuant to the proviso to the preceding
sentence or

 

14

 

(ii)
during any such 90-day period, a new demand, request or notice which has been
canceled pursuant to the proviso to the preceding sentence or (iii) during any
such 90-day period, a new demand, request or notice contrary to or different
from such demand, request or notice, in either of which events a new record
date shall be established pursuant to the provisions of this clause (1).

 

(2)           The
Company may, but shall not be obligated to, direct the Trustee to establish a
record date for the purpose of determining the Persons entitled to (i) waive
any past default with respect to the Securities of such series in accordance
with Section 513 of the Indenture, (ii) consent to any supplemental indenture
in accordance with Section 902 of the Indenture or (iii) waive any term,
condition or provision of any covenant in accordance with Section 1010 of the
Indenture.  If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and only
such Persons, shall be entitled to waive any such past default, consent to any
such supplemental indenture or waive any such term, condition or provision,
whether or not such Holder remains a Holder after such record date; provided,
however, that unless such waiver or consent is obtained from the Holders, or
duly designed proxies, of the requisite principal amount of Outstanding
Securities of such series prior to the date which is the 90th day after such
record date, any such waiver or consent previously given shall automatically
and without further action by any Holder be canceled and of no further effect.

 

(f)            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

 

15

 

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
expiration date, any action identical to, or, at any time, contrary to or
different from, any action given or taken, or purported to have been given or
taken, hereunder by a Holder on or prior to such date, in which event the
Company may set a record date in respect thereof pursuant to this
paragraph.  Notwithstanding the
foregoing or the Trust Inden- ture Act, the Company shall not set a record date
for, and the provisions of this paragraph shall not apply with respect to, any
action to be given or taken by Holders pursuant to Section 501, 502 or 512.

 

SECTION
105.       Notices,
Etc., to Trustee and 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 to or with the Trustee
at its Corporate Trust Office, Attention: Houghton Mifflin Company 1992
Indenture, or

 

16

 

(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, to the attention of its Executive Vice President and Chief
Financial Officer and its Secretary and Clerk, or at any other address
previously furnished in writing to the Trustee by the Company.

 

SECTION
106.       Notice
to Holders of Securities; Waiver.

 

Except
as otherwise expressly provided herein, where this Indenture provides for
notice to Holders of Securities of any event, such notice shall be sufficiently
given to holders of Registered Securities if in writing and mailed, first-class
postage prepaid, to each Holder of a Registered Security affected by such
event, at the address of such Holder as it appears in the Security Register,
not earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice.

 

In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice to Holders of
Registered Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder.  In any case where
notice to Holders of Registered Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Registered Security shall affect the sufficiency of such
notice with respect to other Holders of Registered Securities.

 

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 such notice.  Waivers of notice by Holders of Securities
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.

 

17

 

SECTION
107.       Language
of Notices, Etc.

 

Any
request, demand, authorization, direction, notice, consent or waiver required
or permitted under this Indenture shall be in the English language.

 

SECTION
108.       Conflict
with Trust Indenture Act.

 

If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.

 

SECTION
109.       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
110.       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
111.       Separability
Clause.

 

In
case any provision in this Indenture or 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
112.       Benefits
of Indenture.

 

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

 

SECTION
113.       Governing
Law.

 

This
Indenture and the Securities shall be governed by and construed in accordance
with the laws of the State of New York without regard to conflicts of
laws.

 

18

 

SECTION
114.       Legal
Holidays.

 

In
any case where any Interest Payment Date, Redemption Date or Stated Maturity of
any Security 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 in 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) 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, provided that no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.

 

 

ARTICLE II

 

SECURITY
FORMS

 

SECTION
201.       Forms
Generally.

 

The
Registered Securities, if any, of each series shall be in substantially the
forms set forth in Exhibits A or B to this Indenture, or in such other form
(including temporary or permanent global form) as shall be established by or
pursuant to a Board Vote 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
Secu- rities.  If temporary Securities
of any series are issued in global form as permitted by Section 304, the form
thereof shall be established as provided in the preceding sentence.  If the forms of Securities of any series (or
any such temporary global Security) are established by action taken pursuant to
a Board Vote, a copy of an appropriate record of such action shall be certified
by

 

19

 

the
Secretary and Clerk or by an Assistant Clerk of the Company and delivered to
the Trustee at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Securities (or any such
temporary global Security).

 

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
202.       Form
of Trustee’s Certificate of Authentication.

 

The
Trustee’s certificates of authentication shall be in substantially the
following form:

 

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

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
					

 

SECTION
203.       Securities
in Global Form.

 

If
Securities of a series are issuable in global form, as contemplated by Section
301, then, notwithstanding clause (11) of Section 301 and the provisions of
Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities from time to
time endorsed thereon and that the aggregate amount of Outstanding Securities
represented thereby may from time to time be reduced to reflect exchanges.  Any endorsement of a Security in global form
to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or

 

20

 

in
the Company Order to be delivered to the Trustee pursuant to Section 303 or
Section 304.  Subject to the provisions
of Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order.  If a Company
Order pursuant to Section 303 or 304 has been, or simultaneously is, delivered,
any instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel.

 

The
provisions of the last sentence of Section 303 shall apply to any security
represented by a Security in global form if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Security in
global form together with written instructions (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) with regard
to the reduction in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of
Section 303.

 

Notwithstanding
the provisions of Sections 201 and 307, unless otherwise specified as
contemplated by Section 301, payment of principal of and any premium and
interest on any Security in permanent global form shall be made to the Person
or Persons specified therein.

 

Notwithstanding
the provisions of Section 308 and except as provided in the preceding
paragraph, the Company, the Trustee and any agent of the Company and the
Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security as shall be
specified in a written statement of the Holder of such permanent global
Security.

 

SECTION
204.       Form
of Legend for Book-Entry Securities.

 

Any
Book-Entry Security authenticated and delivered hereunder shall bear a legend
in substantially the following form:

 

21

 

“This
Security is a Book-Entry Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depository or a
nominee of a Depository.  This Security
is exchangeable for Securities registered in the name of a Person other than
the Depository or its nominee only in the limited circumstances described in
the Indenture, and no transfer of this Security (other than a transfer of this
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in such limited circumstances.”

 

SECTION
205.       Additional
Provisions Required in Global Security.

 

Any
Global Security issued hereunder shall, in addition to the provisions contained
in Sections 202 and 203, 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 Depository or a nominee of a
Depository.  This Security is exchangeable
for Securities registered in the name of a person other than the Depository or
its nominee only in the limited circumstances described in the Indenture and
may not be transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository.”

 

ARTICLE III

 

THE
SECURITIES

 

SECTION
301.       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 Vote and,
subject to Section 303, set forth, or determined in the manner provided, in an
Officers’ Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:

 

22

 

(1)           the
title of the Securities of the series (which shall  distinguish
the Securities of the series from all other Securities);

 

(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 series pursuant to Section 304, 305, 306, 906
or 1107 and  except for any Securities which,
pursuant to Section 303, are deemed never  to
have been authenticated and delivered hereunder);

 

(3)           whether
any Securities of the series are to be issuable  initially
in temporary global form and whether any Securities of the series  are to be issuable in permanent global form and, if so, whether
beneficial  owners of interests in any such
permanent global Security may exchange such  interests
for Securities of such series and of like tenor of any authorized  form and denomination and the circumstances under which any such
exchanges  may occur, if other than in the
manner provided in Section 305;

(4)           the
Person to whom any interest on any Registered 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, and the  extent to which, or the manner in which, any interest payable on
a  temporary global Security on an
Interest Payment Date will be paid if other  than
in the manner provided in Section 304;

 

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

 

(6)           the
rate or rates at which the Securities of the series shall  bear interest,

 

23

 

if
any, or the formula pursuant to which such rate or rates shall be  determined, the date or dates from which any such interest shall
accrue,  the Interest Payment Dates on which
any such interest shall be payable, the  Regular
Record Date for any interest payable on any Registered Securities  on any Interest Payment Date;

 

(7)           the
place or places where, subject to the provisions of  Sections
114 and 1002, the principal of and any premium and interest on  Securities of the series shall be payable, any Securities of the
series may  be surrendered for registration of
transfer, Securities of the series may  be
surrendered for exchange, and notices and demands to or upon the Company  in respect of the Securities of the series and this Indenture
may be  served;

 

(8)           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;

 

(9)           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 Holders pursuant to  Article
Eleven, or such terms and conditions as shall be set forth in an  Officers’ Certificate or supplemental indenture;

 

(10)         the
obligation, if any, of the Company to redeem or purchase  Securities of the series, or particular Securities within the
Series,  pursuant to any sinking fund or
analogous provisions or at the option of a  Holder
thereof, including without limitation pursuant to Article Eleven,  and the period or periods within which, the price or prices at
which and  the terms and conditions upon such
Securities shall be redeemed or  purchased,
in whole or in part, pursuant to such obligation;

 

24

 

(11)         the
denominations in which any Registered Securities of the  series shall be issuable, if other than denominations of $1,000
and any  integral multiple thereof;

 

(12)         if
other than the principal amount thereof, the portion of the  principal amount of any Securities of the series which shall be
payable  upon declaration of acceleration of
the Maturity thereof pursuant to  Section
502;

 

(13)         the
Person who shall be the Security Registrar, if other than  the Company;

 

(14)         whether
the Securities of the series shall be issued upon  original
issuance in whole or in part in the form of one or more Book-Entry  Securities and, in such case, (a) the Depository with respect to
such  Book-Entry Security or Securities;
and (b) the circumstances under which  any
such Book-Entry Security may be exchanged for Securities registered  in the name of, an any transfer of such Book-Entry Security may
be  registered to, a Person other than
such depository or its nominee, if  other
than as set forth in section 305;

 

(15)         if
either or both of the provisions of Section 403 or 1011 are  applicable to the Securities of such series; and

 

(16)         any
other terms of the series (which terms shall not be  inconsistent
with the provisions of this Indenture).

 

All
Securities of any one series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise
be provided in or pursuant to the Board Vote referred to above and (subject to
Section 303) set forth in the Officers’ 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 Vote, a copy of an appropriate record of such action shall be certified
by the Secretary and Clerk or by an Assistant Clerk of the

 

25

 

Company
and delivered to the Trustee at or prior to the delivery of the Officers’
Certificate setting forth the terms of the series.

 

SECTION
302.       Denominations.

 

Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, any Registered Securities of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

 

SECTION
303. 
Execution, Authentication, Delivery and Dating.

 

The
Securities shall be executed on behalf of the Company by its Chairman of the
Board and President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary and Clerk or one of its Assistant
Clerks.  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 to the Trustee for authentication, 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 forms or terms of the Securities of the series have been established in or
pursuant to one or more Board Votes as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating:

 

26

 

(a)           if the forms of such Securities have
been established by or pursuant to Board Vote as permitted by Section 201, that
such forms have been established in conformity with the provisions of this
Indenture;

 

(b)           if the terms of such Securities have
been established by or pursuant to Board Vote as permitted by Section 301, that
such terms have been established in conformity with the provisions of this
Indenture; and

 

(c)           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, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting the enforcement of creditors’ rights and to general equity
principles.

 

If
such forms or terms have been so established, the Trustee shall not be required
to authenticate such Securities if the issue or 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 301 and of the two preceding paragraphs, if all
Securities of a series are not to be originally issued at one time, it shall
not be necessary to deliver the Officers’ Certificate otherwise required
pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise
required pursuant to such preceding paragraphs 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
Registered 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

 

27

 

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
309 together with a written statement (which need not comply with Section 102
and need not be accompanied by an Opinion of Counsel) stating that such
Security has never been issued and sold by the Company, 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
304.       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, in
registered form 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.

 

Except
in the case of temporary Securities in global form (which shall be exchanged in
accordance with the provisions of the following paragraphs), 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
maintained pursuant to Section 1002 in a Place of Payment for such series for
the purpose of exchanges of Securities of such series, without charge to the
Holder.  Upon surrender for cancellation
of any one or more temporary Securities of any series the Company

 

28

 

shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like aggregate principal amount of definitive Securities of the same series and
of like tenor of authorized denominations.

 

If
temporary Securities of any series are issued in global form, any such
temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depository or common depository (the
“Common Depository”), for the benefit of Euro-clear and CEDEL S.A., for credit
to the respective accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct).

 

Without
unnecessary delay but in any event not later than the date specified in, or
determined pursuant to the terms of, any such temporary global Security (the
“Exchange Date”), the Company shall deliver to the Trustee definitive
Securities of that series, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company.  On or after the Exchange Date such temporary
global Security shall be surrendered by the Common Depository to the Trustee,
as the Company’s agent for such purpose, to be exchanged, in whole or from time
to time in part, for definitive Securities of such series without charge and
the Trustee shall authenticate and deliver, in exchange for each portion of
such temporary global Security, a like aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like tenor as
the portion of such temporary global Security to be exchanged; provided, however,
that, unless otherwise specified in such temporary global Security, upon such
presentation by the Common Depository, such temporary global Security is
accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euro- clear as to the portion of such temporary global Security held
for its account then to be exchanged and a certificate dated the Exchange Date
or a subsequent date and signed by CEDEL S.A. 
as to the portion of such temporary global Security held for its account
then to be exchanged each in the form set forth in Exhibit C.2 to this
Indenture.  The definitive Securities to
be delivered in exchange for any such temporary global Security shall be in
registered form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination

 

29

 

thereof
is so specified, as requested by the beneficial owner thereof.

 

Unless
otherwise specified in such temporary global Security, the interest of a
beneficial owner of Securities of a series in a temporary global Security shall
be exchanged for definitive Securities of the same series and of like tenor
following the Exchange Date when the account holder instructs Euro-clear or
CEDEL S.A., as the case may be, to request such exchange on its behalf and
delivers to Euro-clear or CEDEL S.A., as the case may be, a certificate in the
form set forth in Exhibit C.1 to this Indenture, dated no earlier than 15 days
prior to the Exchange Date, copies of which certificate shall be available from
the offices of Euro-clear and CEDEL S.A., the Trustee, any Authenticating Agent
appointed for such series of Securities and each Paying Agent.  Unless otherwise specified in such temporary
global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take
delivery of such definitive Securities in person at the offices of Euro-clear
or CEDEL S.A.

 

Until
exchanged in full as hereinabove provided, the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by section 301, interest payable on a temporary global Security
on an Interest Payment Date for Securities of such series occurring prior to
the applicable Exchange Date shall be payable to Euro-clear and CEDEL S.A.  on such Interest Payment Date upon delivery
by Euro-clear and CEDEL S.A.  to the
Trustee of a certificate or certificates in the form set forth in Exhibit C.3
to this Indenture, for credit without further interest on or after such
Interest Payment Date to the respective accounts of the Persons who are the
beneficial owners of such temporary global Security on such Interest Payment
Date and who have each delivered to Euro-clear or CEDEL S.A., as the case may
be, a certificate in the form set forth in Exhibit C.4 to this Indenture.  Any interest so received by Euro-clear and
CEDEL S.A.  and not paid as herein provided
shall be

 

30

 

returned to the Trustee immediately
prior to the expiration of two years after such Interest Payment Date in order
to be repaid to the Company in accordance with Section 1003.

 

SECTION
305.       Registration,
Registration of Transfer and Exchange.

 

The
Company shall cause to be kept at an office or agency to be maintained by the
Company in accordance with Section 1002 a register (being the combined register
of the Security Registrar and all transfer agents designated pursuant to
Section 1002 for the purpose of registration of transfer of Securities and
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 Registered Securities and the registration of
transfers of Registered Securities.  The
Trustee is hereby appointed “Security Registrar” for the purpose of registering
Registered Securities and transfers of Registered Securities as herein
provided.

 

Upon
due surrender for registration of transfer of any Registered Security of any
series at the office or agency of the Company maintained pursuant to Section
1002 for such purpose in a Place of Payment for such 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 Registered Securi- ties
of the same series of any authorized denominations and of a like aggregate
principal amount and tenor.

 

At
the option of the Holder, Registered Securities of any series may be exchanged
for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Securities to be exchanged at any 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.

 

Notwithstanding
the foregoing, except as otherwise specified as contemplated by Section 301,
any permanent global Security shall be exchangeable only as provided in

 

31

 

this
paragraph.  If the beneficial owners of
interests in a permanent global Security are entitled to exchange such
interests for Securities of such series and of like tenor and principal amount
of another authorized form and denomination, as specified as contemplated by
Section 301, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Securities of that series in aggregate
principal amount equal to the principal amount of such permanent global
Security, executed by the Company.  On
or after the earliest date on which such interests may be so exchanged, such
permanent global Security shall be surrendered by the Common Depository or such
other depository or Common Depository as shall be specified in the Company
Order with respect thereto to the Trustee, as the Company’s agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities of such series without charge and the Trustee shall authenticate and
deliver, in exchange for each portion of such permanent global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
global Security to be exchanged.  If a
Registered Security is issued in ex- change for any portion of a permanent
global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such office
or agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, interest or Defaulted Interest will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Registered Security, but will be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.

 

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

 

32

 

the Securities surrendered upon such
registration of transfer or exchange.

 

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

 

No
service charge shall be made for any registration of transfer or exchange of
Securities, but the Company 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 304, 906 or 1107 not involving any transfer.

 

The
Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on the day of the mailing of the
relevant notice of redemption or (ii) 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.

 

Notwithstanding
the foregoing and except as otherwise specified or contemplated by Section 301,
any Book-Entry Security shall be exchangeable pursuant to this Section 305 or
Sections 304, 906 and 1107 for Securities registered in the name of, and a
transfer of a Book-Entry Security or any series may be registered to, any
Person other than the Depository for such Security or its nominee only if (i)
such Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Book-Entry Security or if at any time such Depository
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, as amended, (ii) the Company executes and delivers to the Trustee a Company
Order that such Book-Entry Security shall be so exchangeable and the transfer
thereof so registerable or (iii) there shall have occurred and be continuing an
Event of

 

33

 

Default,
or an event which after notice or lapse of time would be an Event of Default,
with respect to the Securities of such series. 
Upon the occurrence in respect of any Book-Entry Security of any series
of any one or more of the conditions specified in clauses (i), (ii) or (iii) or
the preceding sentence or such other conditions as may be specified as
contemplated by Section 301 for such series, such Book-Entry Security may be
exchanged for Securities registered in the names of, and the transfer of such
Book-Entry Security may be registered to, such Persons (including Persons other
than the Depository with respect to such series and its nominees) as such
Depository shall direct. 
Notwithstanding any other provision of this Indenture, any Security authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu
of, any Book- Entry Security shall also be a Book-Entry Security and shall bear
the legend specified in Section 204 except for any Security authenticated and
delivered in exchange for, or upon registration of transfer of, Book-Entry
Security pursuant to the preceding sentence.

 

SECTION
306.       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 and such mutilated Security shall be
cancelled by the Trustee in accordance with the Indenture.

 

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 bona fide purchaser,
the Company shall, subject to the following paragraph, 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.

 

34

 

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
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) connected therewith.

 

Every
new Security of any series issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and any such new
Security 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
307.       Payment
of Interest; Interest Rights Preserved.

 

Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Registered 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 Registered 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) and (2) below:

 

35

 

(1)           The Company may elect to make payment
of any Defaulted  Interest to
the Persons in whose names the Registered 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 Registered 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 ar-  rangements
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 which shall be not more than 15 days  and not less than 10 days prior to the date of the proposed
payment and not  less than
10 days after the receipt by the Trustee of the notice of the  proposed payment.  The
Trustee shall promptly notify the Company of such  Special
Record Date and, in the name and at the expense of the Company,  shall cause notice of the proposed payment of such Defaulted
Interest and  the Special
Record Date therefor to be mailed, first-class postage prepaid,  to each Holder of Registered Securities of such series at the
address of  such Holder 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  mailed, such Defaulted Interest shall be paid to the Persons in
whose names  the Registered 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);  and

 

36

 

(2)           The Company may make payment of any
Defaulted Interest on the  Registered
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 and Section 305, 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.

 

SECTION
308.       Persons
Deemed Owners.

 

Prior
to due presentment of a Registered 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 Registered Security is registered as the owner of
such Registered Security for the purpose of receiving payment of principal of
(and premium, if any) and (subject to Sections 305 and 307) any interest on
such Security and for all other purposes whatsoever, whether or not such
Security shall 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
309.       Cancellation.

 

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

 

37

 

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 as directed by a Company Order, or in
the absence of a Company Order, may be destroyed by the Trustee.

 

Notwithstanding
the foregoing, with respect to any Book-Entry Security, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee,
from giving effect to any written certification, proxy or other authorization
furnished by a Depository or impair, as between a Depository and holders of
beneficial interests in any Book-Entry Security, the operation of customary
practices governing the exercise of the rights of the Depository (or its
nominee) as Holder of such Book-Entry Security.

 

SECTION
310.       Computation
of Interest.

 

Except
as otherwise specified as contemplated by Section 301 for Securities of any
series, (i) interest on the Securities of each series that bear interest at a
fixed rate will be calculated on the basis of a 360-day year of twelve 30- day
months and will not on the 31st day of any month and (ii) interest on the
Securities of each series that bear interest at a floating rate will be
calculated on the basis of the actual number of days elapsed and a year of 360
days, except that interest on Securities of a series that bear interest at a
floating rate which is based upon the yield of U.S.  Treasury obligations will be calculated on the basis of the
actual number of days in the year.

 

SECTION
311.       Electronic
Security Issuance.

 

The
Securities may pursuant to a Board Vote and Officers’ Certificate complying
with Section 301 hereof be issued by means of an electronic issuance
system.  Any such Security issuance
instructions may specify the name, address and taxpayer identification number
of the Holder, the principal amount and Maturity of the Security, the interest
rate to be borne by the Security and any other terms not inconsistent with such
Board Vote and Officers’

 

38

 

Certificate.  Nothing in this Section 311 shall be
construed as prohibiting the Company from issuing Securities by any means not
inconsistent with the provisions of this Indenture.

 

ARTICLE IV

 

SATISFACTION
AND DISCHARGE

 

SECTION
401.       Satisfaction
and Discharge of Indenture.

 

This
Indenture shall upon Company Request cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for, and any right to receive additional amounts, as
provided in Section 1004), 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 (1)
Securities which have been destroyed, lost or stolen and which  have been replaced or paid as provided in Section 306, 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, as provided in Section
1003) 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

 

(iii)          are to be called for redemption within
one year under  arrangements
satisfactory to the Trustee for the giving of notice of

 

39

 

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 premium, if any) and any 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 Officers’  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 607, the obligations of the Trustee to any
Authenticating Agent under Section 612 and, if money shall have been deposited
with the Trustee pursuant to clause (1)(B) of this Section, the obligations of
the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.

 

SECTION
402.       Application
of Trust Money.

 

Subject
to the provisions of the last paragraph of Section 1003, all money deposited
with the Trustee pursuant to Section 401 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 premium, if any) and any interest for
whose payment such money has been deposited with the Trustee.

 

40

 

SECTION
403.       Satisfaction,
Discharge and Defeasance of Securities of any  Series.

 

If
this Section 403 is specified, as contemplated by Section 301, to be applicable
to Securities of any series, then notwithstanding Section 401: (i) the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
Outstanding Securities of any such series; (ii) the provisions of this
Indenture as it relates to such Outstanding Securities shall no longer be in
effect (except as to the rights of Holders of Securities to receive, from the
trust fund described in subparagraph (1) below, payment of (x) the principal of
(and premium, if any) and any installment of principal of (and premium, if any)
or interest on such Securities on the Stated Maturity of such principal (and
premium, if any) or installment of principal (and premium, if any) or interest
or (y) any mandatory sinking fund payments or analogous payments applicable to
the Securities of that series on that day on which such payments are due and
payable in accordance with the terms of the Indenture and of such Securities,
the Company’s obligations with respect to such Securities under Sections 304,
305, 306, 1002, 1003, and 1004 and the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including those under Sections 402 and 607
hereof); and (iii) the Trustee, at the expense of the Company, shall, upon
Company Request, execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, when:

 

(1)           either

 

(A)          with respect to all Outstanding
Securities of such series, with  reference
to this Section 403, the Company has deposited or caused to be  deposited with the Trustee irrevocably (but subject to the
provisions of  Section 402
and the last paragraph of Section 1003), as trust funds in  trust, specifically pledged as security for, and dedicated
solely to, the  benefit of
the Holders of the Securities of that series, (X) lawful money  of the United States in an amount, or (Y) U.S.  Government Obligations which  through the payment of interest and principal in respect thereof
in accor-  dance with their terms will provide
not later than the opening of business  on
the due dates

 

41

 

of
any payment referred to in Clause (i) or (ii) of this subparagraph  (1)(A) lawful money of the United States in an amount, or (z) a
combination  thereof, 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 (i) the
principal of  (and
premium, if any) and each installment of principal (and premium, if  any) and interest on the Outstanding Securities of that series
on the  Stated Maturity of such principal or
installment of principal or interest  and
(ii) any mandatory sinking fund payments or analogous payments  applicable to Securities of such series on the day on which such
payments  are due and payable in accordance
with the terms of this Indenture and of  such
Securities; or

 

(B)           the Company has properly fulfilled
such other means of  satisfaction
and discharge as is specified, as contemplated by Section 301,  to be applicable to the Securities of such series;

 

(2)           the Company has paid or caused to be
paid all other sums  payable
with respect to the Outstanding Securities of such Series;

 

(3)           such deposit will not result in a
breach or violation of, or  constitute
a default under, this Indenture or any other agreement or  instrument to which the Company is a party or by which it is
bound;

 

(4)           no Event of Default or event which
with the giving of notice or  lapse
of time, or both, would become an Event of Default with respect to  the Securities of that series shall have occurred and be
continuing on the  date of
such deposit and no Event of Default under Section 501(6) or  Section 501(7) or event which with the giving of notice or lapse
of time,  or both, would become an Event of
Default under Section 501(6) or Section  501(7)
shall have occurred and be continuing on the 91st day after such  date;

 

42

 

(5)           the Company has delivered to the
Trustee an Opinion of Counsel  to
the effect that (a) the Company has received from, or there has been  published by, the Internal Revenue Service a ruling, or (b) since
the date  of this Indenture there has been a
change in applicable federal income tax  law,
in either case to the effect that, and based thereon such Opinion of  Counsel shall confirm that, the Holders of Securities of such
series will  not recognize income, gain or loss
for federal income tax purposes as a  result
of such deposit, defeasance and discharge and will be subject to  federal income tax on the same amount and in the same manner and
at the  same times as would have been the
case if such deposit, defeasance and  discharge
had not occurred;

 

(6)           if the Securities of that series are
then listed on any  domestic or
foreign securities exchange, the Company shall have delivered  to the Trustee an Opinion of Counsel to the effect that such
deposit,  defeasance and discharge will not
cause such Securities to be delisted; and

 

(7)           the Company has delivered to the
Trustee an Officers’  Certificate
and an Opinion of Counsel, each stating that all conditions  precedent herein provided for relating to the satisfaction and
discharge of  the entire
indebtedness on all Outstanding Securities of any such series  have been complied with and an Opinion of Counsel to the effect
that either  (i) as a result of such deposit and
the related exercise of the Company’s  option
under this Section 403, registration is not required under the  Investment Company Act of 1940, as amended, by the Company, the
trust funds  representing such deposit or the
Trustee or (ii) all necessary  registrations
under said Act have been effected.

 

Any
deposits with the Trustee referred to in Section 403(1)(A) above shall be
irrevocable and shall be made under the terms of an escrow/trust agreement in
form and substance satisfactory to the Trustee.  If any Outstanding

 

43

 

Securities of such series are to be
redeemed prior to their Stated Maturity, whether pursuant to any optional
redemption provisions or in accordance with any mandatory sinking fund
requirement, the applicable escrow trust agreement shall provide therefor and
the Company shall make such arrangements as are satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company.

 

Upon
the satisfaction of the conditions set forth in this Section 403 with respect
to all the Outstanding Securities of any series, the terms and conditions of
such series, including the terms and conditions with respect thereto set forth
in this Indenture, shall no longer be binding upon, or applicable to, the
Company; provided that the Company shall not be discharged  from any payment obligations in respect of Securities of such
series which are deemed to be Outstanding under clause (iii) of the definition
thereof because such obligations continue to be valid obligations of the
Company under applicable law.

 

Notwithstanding
the cessation, termination and discharge of all obligations, covenants and
agreements (except as provided above in this Section 403) of the Company under
this Indenture with respect to any series of Securities, the obligations of the
Company to the Trustee under Section 607, and the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive with
respect to such series of Securities.

 

ARTICLE V

 

REMEDIES

 

SECTION 501.       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 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):

 

44

 

(1)           default in the payment of any
interest upon any Security of  that
series when it becomes due and payable, and continuance of such  default for a period of 30 days; or

 

(2)           default in the payment of the
principal of (or premium, if  any,
on) any Security of that series at its Maturity; or

 

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

 

(4)           any event which shall have resulted
in any indebtedness of the  Company
in an amount greater than $10,000,000 being declared due and  payable prior to the date on which it would otherwise have
become due and  payable; or

 

(5)           default in the performance, or
breach, of any covenant or  warranty
of the Company in this Indenture (other than a covenant or  warranty a default in whose performance or whose breach is
elsewhere in  this
Section specifically dealt with or which has expressly been included  in this Indenture solely for the benefit of series of Securities
other than  that series), and continuance of such
default or breach for a period of 60  days
after there has been given, by registered or certified mail, to the  Company by the Trustee or to the Company and the Trustee by the
Holders of  at least 25% in principal amount of
the Outstanding Securities of that  series,
a written notice specifying such default or breach and requiring  it to be remedied and stating that such notice is a “Notice of
Default”  hereunder; or

 

(6)           the entry by a court having
jurisdiction in the premises of  (A)
a decree or order for relief in respect of the Company in an  involuntary case or proceeding under any applicable Federal or
State  bankruptcy, insolvency,
reorganization or other similar law or (B) a  decree
or order adjudging the Company a bankrupt or insolvent, or approving  as properly filed a petition seeking reorganization, arrangement,

 

45

 

adjustment
or composition of or in respect of the Company under  any
applicable Federal or State law, or appointing a custodian, receiver,  liquidator, assignee, trustee, sequestrator or other similar
official of  the Company or of any substantial
part of its property, or ordering the  winding
up or liquidation of its affairs, and the continuance of any such  decree or order for relief or any such other decree or order
unstayed and  in effect
for a period of 60 consecutive days; or

 

(7)           the commencement by the Company of a
voluntary case or  proceeding
under any applicable Federal or State bankruptcy, insolvency,  reorganization or other similar law or of any other case or
proceeding to  be
adjudicated a bankrupt or insolvent, or the consent by it to the entry  of a decree or order for relief in respect of the Company in an
involuntary  case or proceeding under any
applicable Federal or State bankruptcy,  insolvency,
reorganization or other similar law or to the commencement of  any bankruptcy or insolvency case or proceeding against it, or
the filing  by it of a petition or answer or
consent seeking reorganization or relief  under
any applicable Federal or State law, or the consent by it to the  filing of such petition or to the appointment of or taking
possession by a  custodian,
receiver, liquidator, assignee, trustee, sequestrator or  similar official of the Company or of any substantial part of
its property,  or the
making by it of an assignment for the benefit of creditors, or the  admission by it in writing of its inability to pay its debts
generally as  they become
due, or the taking of corporate action by the Company in  furtherance of any such action; or

 

(8)           any other Event of Default provided
with respect to Securities  of
that series.

 

SECTION
502.       Acceleration
of Maturity; Rescission and Annulment.

 

If
an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing,

 

46

 

then
in every such case the Trustee or the Holders of not less than 25% in 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) 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.

 

At
any time after such a declaration of acceleration with respect to Securities of
any series has been made and before adjudgment 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,

 

(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

 

47

 

(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 513.

 

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

 

SECTION
503.       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  of any
series 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 of any series at the Maturity thereof,  the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities of that series, the whole amount then
due and payable on such Securities of that series 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 on the premium, if any, and
overdue interest, at the rate or rates prescribed therefor in such Securities
of that series 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 of an express trust, may institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the
Company or any other obligor upon such Securities and collect the moneys
adjudged or decreed to be payable in the manner

 

48

 

provided
by law out of the property of the Company or any other obligor upon such
Securities, 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 most effectual 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
504.       Trustee
May File Proofs of Claim.

 

In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and empowered,
by intervention in such proceeding or otherwise,

 

(i)            to file and prove a claim for the
whole amount of principal and  any
premium and interest owing and unpaid in respect of the Securities and  to file such other papers or documents as may be necessary or
advisable in  order to
have the claims of the Trustee (including any claim for the  reasonable compensation, expenses, disbursements and advances of
the  Trustee, its agents and counsel) and
of the Holders of Securities allowed  in
such judicial proceeding, and

 

(ii)           to collect and receive any moneys or
other property payable or  deliverable
on any such claims and to distribute the same,

 

49

 

and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder of Securities 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 of Securities 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 605.

 

Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder of a Security 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 of a Security in any such pro- ceeding.

 

SECTION
505.       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
506.       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:

 

50

 

FIRST:    To the payment of all amounts due the
Trustee under Section 605;  and

 

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.

 

SECTION
507.       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 25% in
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 reasonable  indemnity
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;

 

51

 

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
508.       Unconditional
Right of Holders to Receive Principal, Premium and Interest.

 

Notwithstanding
any other provision in this Indenture, 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 307) interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or,
in the case of redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.

 

SECTION
509.       Restoration
of Rights and Remedies.

 

If
the Trustee or any Holder of a Security 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 of
Securities 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
510.       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 paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities is intended to be exclusive or any other right or remedy,
and every

 

52

 

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
511.       Delay
or Omission Not Waiver.

 

No
delay or omission of the Trustee or of any Holder of any Security 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 of
Securities may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities.

 

SECTION
512.       Control
by Holders of Securities.

 

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, and

 

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

 

Upon
receipt by the Trustee of any written notice directing the time, method or
place of conducting any such proceeding or exercising any such trust or power,
with respect to Securities of a series all or part of which is represented by a
Global Security, a record date shall be established for determining Holders of
Outstanding Securities of such series entitled to join in such notice, which
record date shall be at the close of business on the day the Trustee receives
such notice.  The

 

53

 

Holders
on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such notice, whether or not such Holders remain
Holders after such record date; provided, that unless the Holders of a  majority in principal amount of the Outstanding Securities of
such series shall have joined in such notice prior to the day which is 90 days
after such record date, such notice shall automatically and without further
action by any Holder be canceled and of no further effect.

 

SECTION
513.       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 the Securities of
such series and its consequences, except

 

(1)           a default in the payment of the
principal of (or premium, if  any)
or a continuing default in the payment of any interest on any  Security of such series, or

 

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

The
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Persons entitled to waive any past default hereunder.  If a record date is fixed, the Holders on
such record date, or their duly designated proxies, and only such Persons,
shall be entitled to waive any default hereunder, whether or not such Holders
remain Holders after such record date; provided, that unless such
majority in principal amount shall have waived  such
default prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be canceled and of no further effect.

 

Upon
any such waiver, such default shall cease to exist, and any Event of Default
arising therefrom shall

 

54

 

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
514.       Undertaking
for Costs.

 

All
parties to this indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 25% in
principal amount of the Outstanding Securities of any series, or to any suit
instituted by any Holder of any Security for the enforcement of the payment of
the principal of or any premium or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).

 

SECTION
515.       Waiver
of 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 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.

 

55

 

ARTICLE VI

 

THE TRUSTEE

 

SECTION
601.       Certain
Rights of Trustee.

 

Subject
to the provisions of the Trust Indenture Act:

 

(a)           the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

 

(b)           any request or direction of the
Company mentioned herein shall be sufficiently evidenced by a Company Request
or Company Order or as otherwise expressly provided herein and any vote of the
Board of Directors may be sufficiently evidenced by a Board Vote;

 

(c)           whenever in the administration of
this Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers’ Certificate;

 

(d)           the Trustee may consult with counsel
and the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;

 

(e)           the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders of Securities of
any series pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

 

56

 

(f)            the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon, other evidence of
indebtedness 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; and

 

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

 

SECTION
602.       Not
Responsible for Recitals or Issuance of Securities.

 

The
recitals contained herein and in the Securities (except the Trustees
certificates of authentication) shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness.  The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities.  The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

 

SECTION 603.       May Hold Securities.

 

The
Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or
any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections 608 and 610,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or
such other agent.

 

57

 

SECTION
604.       Money
Held in Trust.

 

Money
held by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by law. 
The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.

 

SECTION
605.       Compensation
and Reimbursement.

 

The
Company agrees:

 

(1)           to pay to the Trustee or any
predecessor Trustee from time to  time
reasonable compensation for all services rendered by it hereunder  (which compensation shall not be limited by any provision of law
in regard  to the compensation of a trustee of
an express trust);

 

(2)           except as otherwise expressly
provided herein, to reimburse  the
Trustee or any predecessor Trustee upon its request for all reasonable  expenses, disbursements and advances incurred or made by the
Trustee in  accordance with any provision of this
Indenture (including the compensation  and
the expenses and disbursements of its agents and counsel), except any  such expense, disbursement or advance as may be attributable to
its  negligence or bad faith; and

 

(3)           to indemnify the Trustee and any
predecessor Trustee for, and  to
hold it harmless against, any loss, liability or expense incurred  without negligence or bad faith on its part, arising out of or
in  connection with the acceptance or
administration of the trust or trusts  hereunder,
including the costs and expenses of defending itself against  any claim or liability in connection with the exercise or
performance of  any of its
powers or duties hereunder.

 

58

 

SECTION
606.       Resignation
and Removal; Appointment of Successor.

 

(a)           The Trustee may resign at any time
with respect to the Securities of one or more series by giving written notice
thereof to the Company.  If the
instrument of acceptance by a successor Trustee required by Section 607 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

 

(b)           The Trustee may be removed at any
time with respect to the Securities of any series by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Trustee and to the Company.

 

(c)           If at any time:

 

(1)           the Trustee shall fail to comply with
Section 310(b) of the  Trust
Indenture Act after written request therefor by the Company or by any  Holder of a Security who has been a bona fide Holder of a
Security for at  least six
months, or

 

(2)           the Trustee shall cease to be
eligible under Section 310(a) of  the
Trust Indenture Act and shall fail to resign after written request  therefor by the Company or by any such Holder, or

 

(3)           the Trustee shall become incapable of
acting or shall be  adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its  property shall be appointed or any public officer shall take
charge or  control of the Trustee or of its
property or affairs for the purpose of  rehabilitation,
conservation or liquidation,

 

then, in any such case, (i) the
Company by a Board Vote may remove the Trustee with respect to all Securities,
or (ii) subject to Section 514 any Holder of a Security who has been a bona
fide Holder of a Security for at least

 

59

 

six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.

 

(d)           If the Trustee shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Vote, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
607.  If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 607, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by the
Company.  If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders of Securities of that series and accepted appointment in
the manner required by Section 607, any Holder of a Security who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

 

(e)           The Company shall give notice of each
resignation and each removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with respect to the
Securities of any series in the manner provided in Section 106.  Each notice shall include the name of the
successor Trustee with

 

60

 

respect
to the Securities of such series and the address of its Corporate Trust Office.

 

SECTION
607.       Acceptance
of Appointment by Successor.

 

(a)           In case of the appointment hereunder
of a successor Trustee with respect to all Securities every such successor
Trustee so appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.

 

(b)           In case of the appointment hereunder
of a successor Trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (l) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall 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, it being
understood that nothing herein or in such supple-

 

61

 

mental
indenture shall constitute such Trustees as co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.

 

(c)           Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraph (a) or (b) of this Section, as the
case may be.

 

(d)           No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article and the Trust Indenture Act.

 

SECTION
608.       Disqualification;
Conflicting Interests.

 

If
the Trustee has or shall acquire a conflicting interest within the meaning of
the Trust Indenture Act, the Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.

 

SECTION
609.       Corporate
Trustee Required; Eligibility.

 

There
shall at all times be a Trustee hereunder which shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. 
If such

 

62

 

Person publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.  If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.

 

SECTION
610.       Preferential
Collection of Claims Against Company.

 

If
and when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).

 

SECTION
611.       Merger,
Conversion, Consolidation or Succession to Business.

 

Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the Trustee
shall be the successor of the Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.  In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.

 

SECTION
612.       Appointment
of Authenticating Agent.

 

The
Trustee may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon

 

63

 

original issue or upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. 
Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee’s certificate of
authentication such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent.  Each Authenticating Agent shall
be acceptable to the Company and shall at all times be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority.  If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenti- cating Agent
shall resign immediately in the manner and with the effect specified in this
Section.

 

Any
corporation into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency or corporate
trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent.

 

An
Authenticating Agent may resign at any time by giving written notice thereof to
the Trustee and to the Company.  The
Trustee may at any time terminate the

 

64

 

agency
of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall promptly give notice of such appointment to all Holders of Securities
pursuant to Section 106.  Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder with
like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.

 

The
Trustee agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section, and the Trustee shall be
entitled to be reimbursed for such payments, subject to the provisions of
Section 605.

 

If
an appointment with respect to one or more series is made pursuant to this
Section, the Securities of such series may have endorsed thereon, in addition
to the Trustee’s certificate of authentication, an alternative certificate of
authentication in the following form:

 

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

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authenticating
  Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

If
all of the Securities of a series may not be originally issued at one time, and
if the Company has an

 

65

 

Affiliate
eligible to be appointed as an Authenticating Agent hereunder or the Trustee
does not have an office capable of authenticating Securities upon original
issuance located in a Place of Payment where the Company wishes to have
Securities of such series authenticated upon original issuance, the Trustee, if
so requested by the Company in writing (which writing need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel), shall
appoint in accordance with this Section an Authenticating Agent (which if so
requested by the Company, shall be such Affiliate of the Company) having an
office in a Place of Payment designated by the Company with respect to such
series of Securities.

 

ARTICLE VII

 

HOLDERS’
LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

SECTION
701.       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 later than October
1 and April 1 in each  year, 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 preceding
September 15 or March 15, 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 15 days
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
702.       Preservation
of Information; Communications to Holders.

 

(a)           The Trustee shall preserve, in as
current a form as is reasonably practicable, the names and addresses 

 

66

 

of
Holders of Securities (i) contained in the most recent list furnished to the
Trustee as provided in Section 701 and (ii) received by the Trustee in its capacity
as Security Registrar.  The Trustee may
(i) destroy any list furnished to it as provided in Section 701 upon receipt of
a new list so furnished, (ii) destroy any information received by it as Paying
Agent (if so acting) hereunder upon delivering to itself as Trustee, not
earlier than March 30 or September 30 of each year, a list containing the names
and addresses of the Holders of Securities obtained from such information since
the delivery of the next previous list, if any, and (iii) destroy any list
delivered to itself as Trustee which was compiled from information received by
it as Paying Agent (if so acting) hereunder upon the receipt of a new list so
delivered.

 

(b)           If three or more Holders of
Securities (herein referred to as “applicants”) apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each such applicant
has owned a Security for a period of at least six months preceding the date of
such application, and such application states that the applicants desire to communicate
with other Holders of Securi- ties with respect to their rights under this
Indenture or under the Securities and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five business days after the receipt of such
application, at its election, either

 

(i)            afford such applicants access to the
information preserved at  the time by
the Trustee in accordance with Section 702(a), or 

 

(ii)           inform such applicants as to the
approximate number of Holders  of
Securities whose names and addresses appear in the information  preserved at the time by the Trustee in accordance with Section
702(a), and  as to the approximate cost of mailing
to such Holders the form of proxy or  other
communication, if any, specified in such application.

 

If
the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each

 

67

 

Holder
of Securities whose name and address appears in the information preserved at
the time by the Trustee in accordance with Section 702(a) a copy of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interest of the Holders of
Securities or would be in violation of applicable law.  Such written state- ment shall specify the
basis of such opinion.  If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any of
such objections or if after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders of Securities with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.

 

(c)           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 the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with Section
702(b), regardless of the source from which such information was derived and
that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under Section 702(b).

 

SECTION
703.       Reports
by Trustee.

 

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.

 

68

 

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 when any Securities are
listed on any stock exchange.

 

ARTICLE
VIII

 

CONSOLIDATION,
MERGER,  SALE,
LEASE, TRANSFER  OR
OTHER DISPOSITION

 

SECTION
801.       Company
May Consolidate, Etc.  Only on Certain
Terms.

 

The
Company shall not consolidate or merge with or into any other Person or sell,
lease, transfer or otherwise dispose of its assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate or
merge with or into the Company or to sell, lease, transfer or otherwise dispose
of its assets substantially as an entirety to the Company, unless:

 

(1)           in case the Company shall consolidate
or merge with or into  another
Person or sell, lease, transfer or otherwise dispose of its assets  substantially as an entirety to any Person, the Person formed by
such  consolidation or into which the
Company is merged or the Person which  acquires
by sale, lease, transfer or otherwise, the assets of the Company  substantially as an entirety shall be a corporation, partnership
or  trust, shall be organized and validly
existing under the laws of the United  States
of America, any State thereof or the District of Columbia and shall  expressly assume, by an indenture supplemental hereto, executed
and  delivered to the Trustee, in form
satisfactory to the Trustee, the due and  punctual
payment of the principal of and any premium and interest  (including all additional amounts, if any, payable pursuant to
Section  1004) on all the Securities and the
performance

 

69

 

of
every covenant of this Indenture on the part of the Company to be  performed or observed;

 

(2)           immediately after giving effect to
such transaction and  treating
any indebtedness which becomes an obligation of the Company or a  Subsidiary as a result of such transaction as having been
incurred by the  Company or
such Subsidiary at the time of such transaction, no Event of  Default, and no event which, after notice or lapse of time or
both, would  become an Event of Default, shall
have happened and be continuing;

 

(3)           if as a result of any such
consolidation or merger or such  sale,
lease, transfer or other disposition of the assets of the Company  would become subject to a mortgage, pledge, lien, security
interest or  other encumbrance which would not be
permitted by this Indenture, the  Company
or such successor Person, as the case may be, shall take such  steps as shall be necessary effectively to secure the Securities
equally  and ratably with (or prior to) all
indebtedness secured thereby; and

 

(4)           the Company has delivered to the
Trustee an Officers’  Certificate
and an Opinion of Counsel, each stating that such consolida-  tion, merger, conveyance, sale, lease, transfer or other
disposition and,  if a
supplemental indenture is required in connection with such  transaction, such supplemental indenture comply with this
Article and that  all
conditions precedent herein provided for relating to such transaction  have been complied with.

 

SECTION
802.       Successor
Substituted.

 

Upon
any consolidation or merger of the Company with or into any other Person or any
sale, lease, transfer or other disposition of the assets of the Company
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which sale, lease, transfer or other disposition is made shall assume the
obligations of the Company on the Securities and under

 

70

 

this Indenture with the same effect
as if such successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

 

ARTICLE IX

 

SUPPLEMENTAL
INDENTURES

 

SECTION
901.       Supplemental
Indentures Without Consent of Holders.

 

Without
the consent of any Holders of Securities, the Company, if then authorized by a
Board Vote, 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; or

 

(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; or

 

(3)           to add any additional Events of
Default; or

 

(4)           to change or eliminate any of the
provisions of this Indenture,

 

provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the  execution of such supplemental indenture which is entitled to
the benefit  of such provision; or

 

71

 

(5)           to secure the Securities pursuant to
the requirements of  Section
1007 or otherwise; or

 

(6)           to establish the form or terms of
Securities of any series as  permitted
by Sections 201 and 301; or

 

(7)           to comply with Section 802 or Section
607; or

 

(8)           to effect or maintain the
qualification of this Indenture  under
the Trust Indenture Act; or

 

(9)           to evidence and provide for the
acceptance of appointment  thereunder
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 607; or

 

(10)         to cure any ambiguity, to correct or
supplement any provision  herein
which may be 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 shall not adversely  affect
the interests of the Holders of Securities of any series in any  material respect.

 

SECTION
902.       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 of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Vote, and the Trustee may 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

 

72

 

in
any manner the rights of the Holders of Securities of such series under this
Indenture; provided, however, that no such supplemental indenture shall,  without the consent of the Holder of each Outstanding Security
affected thereby,

 

(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 thereon or any
premium  payable upon the redemption thereof,
or change any obligation of the  Company
to pay additional amounts pursuant to Section 1004 (except as  contemplated by Section 801(1) and permitted by Section 901(1)),
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 502 or change 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

 

(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, or

 

(3)           change any obligation of the Company
to maintain an office or  agency in
the places and for the purposes specified in Section 1002, or

 

(4)           modify any of the provisions of this
Section, Section 513 or  Section
1010, except to increase any such percentage or to provide that  certain other provisions of this Indenture cannot be modified or
waived  without

 

73

 

the
consent of the Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the  consent of any Holder of a Security with respect to changes in
the  references to “the Trustee” and
concomitant changes in this Section and  Section
1010 or the deletion of this proviso, in accordance with the  requirements of Sections 607 and 901(9).

 

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.

 

The
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Persons entitled to consent to any indenture supplemental
hereto.  If a record date is fixed, the
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to consent to such supplemental indenture, whether
or not such Holders remain Holders after such record date; provided, that
unless such consent shall have  become
effective by virtue of the requisite percentage having been obtained prior to
the date which is 90 days after such record date, any such consent previously
given shall automatically and without further action by any Holder be canceled
and of no further effect.

 

It
shall not be necessary for any Act of Holders of Securities 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.  

 

SECTION
903.       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 entitled to

 

74

 

receive,
and (subject to Section 601) 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. 
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
904.       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
905.       Conformity
with Trust Indenture Act.

 

Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act of 1939, as amended, in effect on such
date.

 

SECTION
906.       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
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

 

75

 

ARTICLE X

 

COVENANTS

 

SECTION 1001.     Payment of Principal, Premium and
Interest.

 

The
Company covenants and agrees for the benefit of each series of Securities that
it will duly and punctually pay the principal of and any premium and interest
on the Securities of that series in accordance with the terms of the Securities
and this Indenture.

 

SECTION
1002.     Maintenance
of Office or Agency.

 

The
Company will maintain in each Place of Payment for such series 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 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 notice to the
Trustee and to the Holders as provided in Sections 105 and 106, respectively,
of the location and any change in the location, of any such office or
agency.  If at any time the Company
shall fail to maintain any such required office or agency in respect of any
series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

 

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
accordance with the requirements set forth above for Securities of any series
for such purposes.  The Company will
give prompt written notice to the Trustee and the Holders of any such designation
or rescission and of any change in the location of any such other office or
agency.

 

76

 

SECTION 1003.     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
and 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 or 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 and any premium or interest
on any Securities of that series, deposit with a Paying Agent a sum sufficient
to pay the principal and any premium or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, 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, 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  and
any premium or interest on Securities of that series in trust for the  benefit of the Persons entitled thereto until such sums shall be
paid to  such Persons or otherwise disposed of
as herein provided;

 

(2)           give the Trustee 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 of and any premium or interest on the
Securities of  that
series; and

 

(3)           at any time during the continuance of
any such default, upon  the written
request

 

77

 

of
the Trustee, forthwith pay to the Trustee all sums so held in trust by  such Paying Agent.

 

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 and any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any 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.

 

SECTION
1004.     Additional
Amounts.

 

If
the Securities of a series provide for the payment of additional amounts, the
Company will pay to the Holder of any Security of such series additional
amounts as provided therein.  Whenever
in this Indenture there is mentioned, in any context, the payment of the
principal of or any premium or interest on, or in respect of any Security of
any series or the net proceeds received on the sale or exchange of any Security
of any series, such mention shall be deemed to include mention of the payment
of additional amounts provided for in this Section to the extent that, in such
context additional amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
additional amounts (if applicable) in any provisions hereof shall not be
construed as excluding additional amounts in those provisions hereof where such
express mention is not made.

 

78

 

SECTION 1005.     Existence.

 

Subject
to Article Eight, the Company will do or cause to be done all things necessary
to preserve and keep in full force and effect its existence, rights (charter
and statutory) and franchises; provided, however, that the  Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and that the loss thereof is not disadvantageous in any material respect to the
Holders.

 

SECTION
1006.     [Intentionally
Omitted]

 

SECTION
1007.     Limitation
on Liens.

 

(a)           The Company will not, nor will it
permit any Subsidiary to, issue, assume or guarantee any indebtedness for money
borrowed, including but not limited to any Funded Debt (hereinafter in this
Article Ten referred to as “Debt”), if such Debt is secured by a mortgage,
pledge, security interest or lien (any mortgage, pledge, security interest or
lien being hereinafter in this Article Ten referred to as a “mortgage” or
“mortgages”) upon any assets, stock or other indebtedness of the Company now
owned or hereafter acquired, without in any such case effectively providing,
concurrently with the issuance, assumption or guarantee of such Debt, that the
Securities (together with, if the Company shall so determine, any other
indebtedness of or guaranteed by the Company or such Subsidiary ranking equally
with the Securities then outstanding and existing or thereafter created) shall
be secured equally and ratably with (or prior to) such Debt; provided,
however, that, subject to subsection (c) of this  Section
1007, the foregoing restriction shall not apply to:

 

(1)           mortgages on any property acquired,
constructed or improved by  the
Company or any Subsidiary after the date of this Indenture which are  created or assumed contemporaneously with, or within one hundred
and eighty  days after, such acquisition (or in
the case of property constructed or  improved,
after the completion and commencement of commercial operation of  such property, whichever is later) to

 

79

 

secure
or provide for the payment of any part of the purchase price of such  property or the cost of such construction or improvement, or
mortgages on  any
property existing at the time of acquisition thereof; provided that in  the case of any such construction or improvement the mortgage
shall not  apply to any property theretofore
owned by the Company or any Subsidiary,  other
than any theretofore unimproved real property on which the property  so constructed, or the improvement, is located;

 

(2)           mortgages on any property acquired
from a corporation which is  merged
with or into the Company or a Subsidiary or mortgages outstanding  at the time any corporation becomes a Subsidiary;

 

(3)           mortgages in favor of the Company or
any Subsidiary; and 

 

(4)           any extension, renewal or replacement
(or successive  extensions,
renewals or replacements) in whole or in part, of any mortgage  referred to in the foregoing clauses (l) to (3), inclusive; provided,  however, that the
principal amount of Debt secured thereby shall not exceed  the principal amount of Debt so secured at the time of such
extension,  renewal or replacement, and that such
extension, renewal or replacement  shall
be limited to all or a part of the property which secured the  mortgage so extended, renewed or replaced (plus improvements on
such  property).

 

(b)           Notwithstanding the provisions of
subsection (a) of this Section 1007, but subject to subsection (c) of this
Section 1007, the Company or any Subsidiary may issue, assume or guarantee
secured Debt, which would otherwise be subject to the foregoing restrictions,
in an aggregate amount which together with all other such Debt and all
Attributable Debt in respect of Sale and Lease- Back Transactions (as defined
in Section 1008) of the Company and its Subsidiaries existing at such time
(other than Sale and Lease-Back Transactions the proceeds of which have been
applied in accordance with clause (b) of Section 1008), does not at the time
exceed 10% of the

 

80

 

stockholders’
equity of the Company and its consolidated Subsidiaries, computed in accordance
with generally accepted accounting principles applied on a consistent basis, as
shown on the audited consolidated balance sheet contained in the latest annual
report to stockholders of the Company.

 

(c)           Notwithstanding the provisions of
subsections (a) and (b) of this Section 1007, the Company’s Subsidiaries shall
not issue, assume or otherwise incur Funded Debt in excess of $5 million in the
aggregate at any time outstanding.

 

SECTION
1008.     Limitation
on Sale and Lease-Back Transactions.

 

The
Company will not, nor will it permit any Subsidiary to, enter into any
arrangement with any person providing for the leasing to the Company or a
Subsidiary of any real property (except for temporary leases for a term of not
more than three years), which property has been owned and, in the case of any
such Facility, has been placed in commercial operation more than one hundred
and eighty days by the Company or such Subsidiary and has been or is to be sold
or transferred by the Company or such Subsidiary to such person (herein
referred to as “Sale and Lease-Back Transactions”), unless either (a) the
Company or such Subsidiary would be entitled to incur Debt secured by a
mortgage on the property to be leased in an amount equal to the Attributable
Debt with respect to such Sale and Lease-Back Transactions without equally and
ratably securing the Securities pursuant to Section 1007 or (b) the Company
shall, and in any such case the Company covenants that it will, apply an amount
equal to the fair value (as determined by the Board of Directors) of the
property so leased to the retirement, within one hundred and eighty days of the
effective date of any such Sale and Lease-Back Transactions, of Securities or
of Funded Debt of the Company which ranks on a parity with the Securities.

 

SECTION
1009.     Statement
by Officers as to Default.

 

The
Company will deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company ending after the date hereof, an Officers’
Certificate stating whether or not to the best knowledge of the  

 

81

 

signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they
may have knowledge.

 

SECTION
1010.     Waiver
of Certain Covenants.

 

The
Company may omit in any particular instance to comply with any term, provision
or condition set forth in Sections 1007 to 1008, inclusive, with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

 

The
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Persons entitled to waive any such term provision or
condition.  If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and only
such Persons, shall be entitled to waive any such term, provision or condition
hereunder, whether or not such Holders remain Holders after such record date; provided,
that unless the Holders of at least a  majority
in principal amount of the Outstanding Securities of such series shall have
waived such term, provision or condition prior to the date which is 90 days
after such record date, any such waiver previously given shall automatically
and without further action by any Holder be canceled and of no further effect.

 

SECTION
1011.     Defeasance
of Certain Obligations.

 

If
this Section 1011 is specified, as contemplated by Section 301, to be
applicable to Securities of any series, the Company may omit to comply with any
term, provision or condition set forth in Section 1007 or Section 1008 and any
such omission with respect to Section 

 

82

 

1007
or Section 1008 shall not be an Event of Default, in each case with respect to
the Securities of that series, provided that the following conditions have been
satisfied:

 

(1)           with reference to this Section 1011,
the Company has deposited  or
caused to be deposited with the Trustee (or another trustee satisfying  the requirements of Section 609) irrevocably (but subject to the
provisions  of Section 402 and the last paragraph
of Section 1003) as trust funds in  trust,
specifically pledged as security for and dedicated solely to the  benefit of the Holders of the Securities of that series, (A)
lawful money  of the
United States in an amount, or (B) U.S. 
Government Obligations which  through
the payment of interest and principal in respect thereof in  accordance with their terms will provide not later than the opening
of  business on the due dates of any
payment referred to in clause (i) or  (ii)
of this subparagraph (l) lawful money of the United States in an  amount, or (C) a combination thereof, 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 (i) the principal of (and premium, if any) and each
installment  of principal (and premium, if any)
and interest on the Outstanding  Securities
of that series on the Stated Maturity of such principal or  installment of principal or interest and (ii) any mandatory
sinking fund  payments or
analogous payments applicable to Securities of such series on  the day on which such payments are due and payable in accordance
with the  terms of this Indenture and of such
Securities;

 

(2)           such deposit shall not cause the
Trustee with respect to the  Securities
of that series to have a conflicting interest as defined in  Section 608 and for purposes of the Trust Indenture Act with
respect to the  Securities
of any Series;

 

83

 

(3)           such deposit will not result in a
breach or violation of, or  constitute
a default under, this Indenture or any other agreement or  instrument to which the Company is a party or by which it is
bound;

 

(4)           no Event of Default or event which
with the giving of notice or  lapse
of time, or both, would become an Event of Default with respect to  the Securities of that series shall have occurred and be
continuing on the  date of
such deposit and no Event of Default under Section 501(6) or  Section 501(7) or event which with the giving of notice or lapse
of time,  or both, would become an Event of
Default under Section 501(6) or Section  501(7)
shall have occurred and be continuing on the 91st day after such  date;

 

(5)           the Company has delivered to the
Trustee an Opinion of Counsel  to
the effect that Holders of the Securities of such series will not  recognize income gain or loss for federal income tax purposes as
a result  of such deposit and defeasance of
certain obligations and will be subject  to
federal income tax on the same amount and in the same manner and at the  same times as would have been the case if such deposit and
defeasance had  not
occurred;

 

(6)           if the Securities of that series are
then listed on any foreign  or
domestic securities exchange, the Company has delivered to the Trustee  an Opinion of Counsel to the effect that such deposit and
defeasance will  not cause
such Securities to be delisted; and

 

(7)           the Company has delivered to the
Trustee an Officers’  Certificate
and an Opinion of Counsel, each stating that all conditions  precedent herein provided for relating to the defeasance
contemplated in  this
Section have been complied with and an Opinion of Counsel to the  effect that either (i) as a result of such deposit and the
related exercise  of the
Company’s option under this Section 1011 registration is not  required under the Investment

 

84

 

Company
Act of 1940, as amended, by the Company, the trust funds  representing such deposit or the Trustee or (ii) all necessary
registrations under said Act have been effected.

 

ARTICLE XI

 

REDEMPTION
OF SECURITIES

 

SECTION 1101.     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 301 for Securities of any series) in accordance with
this Article.

 

SECTION
1102.     Election
to Redeem; Notice to Trustee.

 

The
election of the Company to redeem any Securities shall be evidenced by an
Officer’s Certificate.  In the case of
any redemption, at the election of the Company, of less than all the Securities
of any series, the Company shall, not less than 30 nor more than 60 days prior
to the Redemption Date fixed by the Company (unless the Trustee shall otherwise
agree), notify the Trustee of such Redemption Date and of the principal amount
of Securities of such series to be redeemed. 
In the case of any redemption of Securities (i) prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officers’ Certificate evidencing
compliance with such restriction or condition.

 

SECTION
1103.     Selection
by Trustee of Securities to Be Redeemed.

 

If
less than all the Securities of any series 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 Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection,

 

85

 

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 Registered Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series.  If so
specified in the Securities of a series, partial redemptions must be in an
amount not less than $ 1,000,000 principal amount of Securities.

 

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

 

SECTION
1104.     Notice
of Redemption.

 

Notice
of redemption shall be given in the manner provided in Section 106 to the
Holders of Securities to be redeemed not less than 30 nor more than 60 days
prior to the Redemption Date (unless the Trustee shall otherwise agree).

 

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,  the principal amounts) of the particular Securities to be
redeemed, and a  statement
to the effect that on or after the Redemption Date upon  surrender of such Security a new Security in the principal
amount equal to  the
unredeemed portion will be issued;

 

86

 

(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; and

 

(5)           that the redemption is for a sinking
fund, if such is the  case.

 

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, by the Trustee in the
name and at the expense of the Company [and shall be irrevoca- ble].  

 

SECTION 1105.     Deposit of Redemption Price.

 

Prior
to any 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 1003) 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 Securities which are to be
redeemed on that date.

 

SECTION 1106.     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 301, installments of interest on Registered Securities 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 307.

 

87

 

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.

 

SECTION
1107.     Securities
Redeemed in Part.

 

Any
Registered Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Registered Security or Securities of the same
series and of like tenor of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.  If a global security is so surrendered, such
new Security so issued shall be a new Global Security.

 

ARTICLE XII

 

SINKING
FUNDS

 

SECTION 1201.     Applicability of Article.

 

The
provisions of this Article shall be applicable to any sinking fund for the
retirement of Securities of a series to the extent or except as otherwise
specified as contemplated by Section 301 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 1202.  Each sinking fund payment shall be applied
to the redemption

 

88

 

of Securities of any series as
provided for by the terms of Securities of such series.

 

SECTION
1202.     Satisfaction
of Sinking Fund Payments with Securities.

 

The
Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption), and (2) may apply as a credit Securities of
a series 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 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
1203.     Redemption
of Securities for Sinking Fund.

 

Not
less than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers’ 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 1202 and will also deliver to the Trustee any Securities to be so
delivered.  Not less than 45 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 1103 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
1104.  Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in
the manner stated in Sections 1106 and 1107.

 

89

 

IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

 

	
   

  	
  HOUGHTON
  MIFFLIN COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Stephen O.  Jaeger

  	
   

  
	
   

  	
   

  	
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  [Seal]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Lois M. Novotny

  	
   

  	
   

  	
   

  
	
  Assistant Clerk

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  FIRST NATIONAL BANK OF  BOSTON

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Donna L.  Germano

  	
   

  
	
   

  	
   

  	
  Donna
  L. Germano

  
	
   

  	
   

  	
  Account
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Seal]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Eric J.  Donaghey

  	
   

  	
   

  	
   

  
	
  Eric
  J. Donaghey

  	
   

  	
   

  	
   

  
	
  Assistant
  Cashier

  	
   

  	
   

  	
   

  
						

 

90

 

	
  COMMONWEALTH
  OF MASSACHUSETTS

  	
  )

  
	
   

  	
  )
  ss.:

  
	
  COUNTY
  OF SUFFOLK

  	
  )

  

 

On
the 5th day of April, 1994, before me personally came Stephen O.  Jaeger, to me known, who, being by me duly
sworn, did depose and say that he is Executive Vice President of Houghton
Mifflin Company, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.

 

	
   

  	
   

  	
  /s/ Kathleen A.  Rideout

  	
  [Seal]

  
	
  Notary Public,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Commonwealth of Massachusetts

  
	
   

  	
   

  	
  Qualified in Suffolk County

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Commission
  Expires July 27, 1995

  
					

 

 

91

 

	
  COMMONWEALTH
  OF MASSACHUSETTS

  	
  )

  
	
   

  	
  )
  ss.:

  
	
  COUNTY
  OF SUFFOLK

  	
  )

  

 

On
the 4th day of April, 1994, before me personally came Donna L.  Germano, to me known, who, being by me duly
sworn, did depose and say that he is Account Manager of The First National Bank
of Boston, a national banking association described in and which executed the
foregoing instrument; that he knows the seal of said association; that the seal
affixed to said instrument is such association seal; that it was so affixed by
authority of the Board of Directors of said association, and that he signed his
name thereto by like authority.

 

	
   

  	
   

  	
  /s/ Bernadette May

  	
  [Seal]

  
	
  Notary Public,

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Commonwealth of Massachusetts

  
	
   

  	
   

  	
  Qualified in Norfolk County

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Commission
  Expires October 31, 1997

  
					

 

92

 

EXHIBIT A

 

[Form of Registered Security Which Is Not

An  Original Issue Discount Security]

 

[Form of Face]

 

HOUGHTON MIFFLIN COMPANY

 

	
  No.  [R-]

  	
  $

  

 

Houghton
Mifflin Company, a corporation duly organized and existing under the laws of
the Commonwealth of Massachusetts (herein called the “Company”, which term
includes any successor Person under the Indenture re- ferred to on the reverse
hereof), for value received, hereby promises to pay to
                    
or registered assigns, the principal sum of                 
Dollars on
                 ,
and to pay interest thereon from                  ,
19     or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, [semi-annually in arrears on
               
and                 
in each year] [annually in arrears on
                   
in each year], commencing                ,
19   , at the rate of       % per
annum, until the principal hereof is paid or made avail- able for payment [If
applicable, insert—and (to the extent that the payment of such interest shall
be legally enforceable) at the rate of         %
per annum on any over-due 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.  Except as
otherwise provided in the Indenture, 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 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

 

A-1

 

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.  Payment of the principal of [(and premium,
if any)] and interest on this Security will be made at the office or agency of
the Company maintained for that purpose designated pursuant to Section 1002 of
the Indenture, 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 at
the Corporate Trust Office of the Trustee or such other office or agency of the
Company as may be designated by it for such purpose pursuant to Section 1002 of
the Indenture, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts [If applicable, insert—; 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]
[or by wire transfer to an account maintained by such Person with a bank in The
City of New York (so long as the Company has received proper transfer
instructions in writing)].

 

[If
Securities of the series are to be offered to United States Aliens, insert—The
Company will pay to the Holder of this Security who is a United States Alien
(as defined below) such additional amounts as may be necessary in order that
every net payment of the principal of [(and premium, if any)] and interest on this
Security, after deduction or withholding for or on account of any present or
future tax, assessment or other governmental charge imposed by the United
States (as defined below) or any political subdivision or taxing authority
thereof or therein upon or as a result of such payment, will not be less than
the amount provided for in this Security to be then due and payable; provided,
however, that the foregoing obligation to pay additional  amounts will not apply to any one or more of the following:

 

(a)           any tax, assessment or other
governmental charge which would  not
have been so imposed but for (i) the existence of any present or former  connection between such Holder (or between a fiduciary, settlor,  beneficiary or member of such Holder, if such Holder is

 

A-2

 

an
estate, a trust or a partnership) and the United States, including,  without limitation, such Holder (or such fiduciary, settlor,
beneficiary  or member) being or having been a
citizen or resident or treated as a  resident
thereof, or being or having been engaged in trade or business or  present therein, or having or having had a permanent
establishment  therein, or
-(ii) such Holders’ present or former status as a personal  holding company, a foreign personal holding company, a
controlled foreign  corporation
for United States tax purposes or a corporation which  accumulates earnings to avoid United States federal income tax;

 

(b)           any tax, assessment or other
governmental charge imposed on  interest
received by a Person holding, actually or constructively, 10% or  more of the total combined voting power of all classes of stock
of the  Company entitled to vote;

 

(c)           any tax, assessment or other
governmental charge which would  not
have been imposed but for the failure to comply with any certification,  identification or other reporting requirements concerning the
nationality,  residence,
identity or connection with the United States of the Holder or  beneficial owner of this Security, if compliance is required by
the statute  or by regulation of the United States
Treasury Department as a precondition  to
exemption from such tax, assessment or other governmental charge;

 

(d)           any estate, inheritance, gift, sales,
transfer, personal  property or
any similar tax, assessment or other governmental charge;

 

(e)           any tax, assessment or other
governmental charge which is  payable
otherwise than by deduction or withholding from payments of  principal of [(and premium, if any)] or interest on this
Security; or

 

(f)            any tax, assessment or other
governmental charge which would  not
have been

 

A-3

 

so
imposed but for the presentation by the Holder of this Security for  payment on a date more than 15 days after the date on which such
payment  became due and payable or the date on
which payment thereof is duly  provided
for, whichever occurs later;

 

nor
will additional amounts be paid with respect to any payment of principal of
[(and premium, if any)] or interest on this Security to any United States Alien
who is a fiduciary or partnership or other than the sole beneficial owner of
any such payment to the extent that a beneficiary or settlor with respect to
such fiduciary, a member of such a partnership or the beneficial owner would
not have been entitled to the additional amounts had such beneficiary, settlor,
member or beneficial owner been the Holder of this Security.  The term “United States Alien” means any
Person who, for United States federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non- resident alien fiduciary
of a foreign estate or trust or a foreign partnership one or more of the
members of which is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non- resident alien fiduciary
of a foreign estate or trust, and the term “United States” means the United
States of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction.]

 

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, directly or through an Authenticating Agent,
by manual signature of an authorized signatory, 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:

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  [Seal]

  	
  By

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  
	
   

  	
   

  	 

 

A-4

 

	
  Attest:

  
	
   

  
	
   

  	
   

  

 

[Form of Reverse]

 

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 September      , 1992
(herein called the “Indenture”), between the Company and The First National
Bank of Boston, 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 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
$        ].  As provided in the Indenture and subject to certain limitations
therein set forth, Registered Securities of this series are exchangeable for a
like aggregate principal amount of Registered Securities of this series and of
like tenor of any authorized denominations, as requested by the Holder
surrendering the same, upon surrender of the Registered Security or Registered
Securities to be exchanged at any office or agency described below where
Registered Securities of this series may be presented for registration of
transfer.

 

[If
applicable, insert—The Securities of this series are subject to redemption
[(1)] [If applicable, insert—on
             
in any year commencing with the year        and
ending with the year       through operation of the
sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, [and](2)] [If applicable, insert—at any time [on or after
           ,
19    ], 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,

 

A-5

 

	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  	
  Year

  	
   

  	
  Redemption

  Price

  	
   

  

 

 

 

and
thereafter at a Redemption Price equal to    % of the principal
amount,] [If applicable, insert—[and (      )]
under the circumstances described in the next [two] succeeding paragraph[s] at
a Redemption Price equal to 100% of the principal amount,] together in the case
of any such redemption [If applicable, insert—(whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date;
provided, however, that installments  of
interest on this Security whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holder of this Security, 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.] 

[If
applicable, insert—The Securities of this series are subject to redemption (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
               ,
19    ], 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.  [If applicable,
insert—and (3) under the circumstances described in the next [two] succeeding
paragraph[s] at a Redemption Price equal to 100% 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

 

A-6

 

Date;
provided, however, that installments of interest on this Security whose  Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, 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.] [Notwithstanding the
foregoing, the Company may not, prior to
                   
redeem any Securities of this series as contemplated by Clause [(2)] above 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.]

 

[If
Securities of the series are to be offered to United States Aliens, insert—The
Securities of this series may be redeemed, as a whole but not in part, at the
option of the Company, at a Redemption Price equal to 100% of their principal
amount, together with interest accrued to the date fixed for redemption, if, as
a result of any amendment to, or change in, the laws or regulations of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, or any amendment to or change in an official
interpretation or application of such laws or regulations, which amendment or
change is effective on or after
               ,
19   , the Company will become obligated to pay additional
amounts (as described on the face hereof) on the next succeeding Interest
Payment Date and such obligation cannot be avoided by the use of reasonable
measures available to the Company; provided,  however, that (a)
no such notice of redemption may be given earlier than 90 days prior to the
earliest date on which the Company would be obligated to pay such additional
amounts were a payment in respect of the Securities of this series then due,
and (b) at the time notice of such redemption is given, such obligation to pay
such additional amounts remains in effect. 
Immediately prior to the publication of any notice of redemption
pursuant to this paragraph, the Company shall deliver to the Trustee a
certificate stating that the Company is entitled to effect such redemption and setting
forth a statement of facts showing that the conditions precedent to the right
of the Company so to redeem have occurred.]

 

[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

 

A-7

 

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 may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made — in
the inverse order in which they become due.]]

 

Notice
of redemption will be given by mail to Holders of Registered Securities, not
less than 30 nor more than 60 days prior to the date fixed for redemption, all
as provided in the Indenture.

 

In
the event of redemption of this Security in part only, a new Registered
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.

 

[The
Indenture contains provisions of defeasance of (a) the entire indebtedness of
this Security and (b) certain restrictive covenants upon compliance by the
Company with certain conditions set forth therein.]

 

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.

 

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 hereof or in lieu hereof,
whether or not notation

 

A-8

 

of such consent or waiver is made
upon this Security.

 

As
set forth in, and subject to, the provisions of the Indenture, no Holder of any
Security of this series will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall have received from the
Holders of a majority in principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days; provided, however, that such  limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of [(and premium, if
any)] or interest on this Security on or after the respective due dates
expressed herein.

 

No
reference herein to the Indenture and no 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 [(including additional amounts, as described on the face hereof)] on
this Security at the times, place[s] and rate, herein prescribed.

 

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable 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 premium, if any)] 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 attorney duly
authorized in writing, and thereupon one or more new Registered Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated trans- feree or
transferees.

 

The
Securities of this series are issuable only in registered form, without
coupons, in denominations of

 

A-9

 

$1,000
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 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 is overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

 

The
Indenture and the Securities shall be governed by and construed in accordance
with the laws of the State of New York.

 

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

 

A-10

 

FORM OF ASSIGNMENT

 

(I)
or (we) assign and transfer this Security to                                                                                         
(Insert assignee’s soc.  sec.  or tax I.D. 
no.)

 

 

 

(Print
or type assignee’s name, address and zip code)

 

and
irrevocably appoint

 

agent
to transfer this Security on the books of the
                          Company.  The agent may
substitute another to act for him.

 

	
  Date:

  	
  Your
  Signature:  

  	
   

  	
   

  

 

 

(Sign
exactly as your name appears on the other side of this Security)

 

Signature
Guarantee.

 

A-11

 

EXHIBIT B

 

[FORM OF REGISTERED SECURITY WHICH IS AN

ORIGINAL ISSUE DISCOUNT SECURITY]

 

[Form of Face]

 

FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS
$         PER $1,000 OF ITS PRINCIPAL
AMOUNT, THE ISSUE DATE IS                      ,
19    [,—AND] THE YIELD TO MATURITY IS
     % [, THE METHOD USED TO DETERMINE THE YIELD IS
                              
AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF
                   ,
19    TO
                  ,
19      IS
$         PER $1,000 OF THE PRINCIPAL
AMOUNT OF THIS SECURITY].

 

HOUGHTON
MIFFLIN COMPANY

 

	
  No.  [R-]

  	
  $

  

 

Houghton
Mifflin Company, a corporation duly organized and existing under the laws of
the Commonwealth of Massachusetts (herein called the “Company”, which term
includes any successor Person under the Indenture re- ferred to on the reverse
hereof), for value received, hereby promises to pay to
                                    ,
or registered assigns, the principal sum of
                                              
Dollars on                                    
[If the Security is interest-bearing, insert—, and to pay interest thereon from
                        ,
19    or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, [semi-annually in arrears on
                               
and in each year] [annually in arrears on
                              
in each year], commencing                  ,
19   , at the rate of
          % per annum, until
the principal hereof is paid or made available for payment [If applicable,
insert—, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of
         % per annum on any
overdue amounts.  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.

 

B-1

 

Except
as otherwise provided in the Indenture, 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 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]. 
[If the Security is not to bear interest prior to Maturity, insert—This
Security shall not bear interest except in the case of a default in payment of
amounts due upon acceleration, upon redemption or at Stated Maturity, and in
such case such amounts shall bear interest at the rate of
       % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such amounts has
been made or duly provided for. 
Interest on any overdue amount shall be payable on demand.  Any such interest on any overdue amount that
is not so paid on demand shall bear interest at the rate of
        % per annum (to the extent that
the payment of such interest shall be legally enforceable), 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 amounts due with respect to this Security will be made at
the office or agency of the Company maintained for that purpose designated
pursuant to Section 1002 of the Indenture, 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 at the Corporate Trust Office of the Trustee or
such other office or agency of the Company as may be designated pursuant to
Section 1002 of the Indenture, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts or (b) subject to any laws or regulations applicable
thereto and to the right of the Company (limited as provided in the Indenture)
to rescind the designation of any such Paying Agent, at the [main] offices of
               
in
                   ,
             
in
               
              
in            ,
              in
             
and
              
in
                ,
or at such

 

B-2

 

other
offices or agencies as the Company may designate, by [United States dollar]
check drawn on, or transfer to a United States dollar account maintained by the
payee with, a bank in The City of New York] [If applicable, insert—; 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] [or by wire transfer to an account
maintained by such Person with a bank in The City of New York (so long as the
Company has received proper transfer instructions in writing)].

 

[If
Securities of the series are to be offered to United States Aliens, insert—The
Company will pay to the Holder of this Security who is a United States Alien
(as defined below) such additional amounts as may be necessary in order that
[If the Security is interest-bearing, insert—every net payment of the principal
of [(and premium, if any)] and interest on this Security] [If the Security is
not to bear interest prior to Maturity, insert— (i) the net payment of amounts
due with respect to this Security (including interest on overdue amounts, if
any) and (ii) the net proceeds from the sale or exchange of this Security,
including, in each case, amounts accreted in respect of original issue
discount], after deduction or withholding for or on account of any present or
future tax, assessment or other governmental charge imposed by the United
States (as defined below) or any political subdivision or taxing authority
thereof or therein upon or as a result of such payment [If the Security is not
to bear interest prior to Maturity, insert—or, as a result of such sale or
exchange] will not be less than the amount provided for in this Security to be
then due and payable [If the Security is not to bear interest prior to
Maturity; insert—or, in the case of a sale or exchange, the amount of the net
proceeds from the sale or exchange before any such tax, assessment or other governmental
charge]; provided, however, that the foregoing obligation to  pay additional amounts will not apply to any one or more of the
following:

 

(a)           any tax, assessment or other
governmental charge which would  not
have been so imposed but for (i) the existence of any present or former  connection between such Holder (or between a fiduciary, settlor,  beneficiary or member of such Holder, if such Holder is an
estate, a trust  or a
partnership) and the United States, including, without limitation,

 

B-3

 

such
Holder (or such fiduciary, settlor, beneficiary or member) being or  having been a citizen or resident or treated as a resident
thereof, or  being or having been engaged in trade
or business or present therein, or  having
or having had a permanent establishment therein, or -(ii) such  Holder’s present or former status as a personal holding company,
a foreign  personal holding company, a
controlled foreign corporation for United  States
tax purposes or a corporation which accumulates earnings to avoid  United States federal income tax;

 

(b)           any tax, assessment or other
governmental charge imposed [If  the
Security is interest-bearing, insert—on interest received by a Person  holding, actually or constructively, 10% or more of the total
combined  voting power of all classes of stock
of the Company entitled to vote] [If  the
Security is not to bear interest prior to Maturity, insert—by reason  of such Holder’s past or present status as the actual or
constructive owner  of 10% or
more of the total combined voting power of all classes of stock  of the Company entitled to vote];

 

(c)           any tax, assessment or other
governmental charge which would  not
have been imposed but for the failure to comply with any certification,  identification or other reporting requirements concerning the
nationality,  residence,
identity or connection with the United States of the Holder or  beneficial owner of this Security, if compliance is required by
the statute  or by regulation of the United States
Treasury Department as a precondition  to
exemption from such tax, assessment or other governmental charge;

 

(d)           any estate, inheritance, gift, sales,
transfer, personal  property or
any similar tax, assessment or other governmental charge;

 

(e)           any tax, assessment or other
governmental charge which is  payable
otherwise than by deduction or withholding from payments of [If the  Security is interest-bearing, insert—principal of [(and premium,
if any)]  or

 

B-4

 

interest
on this Security] [If the Security is not to bear interest prior  to maturity, insert—principal of (or interest on overdue
principal, if  any, on)
this Security or from payments from the proceeds of a sale or  exchange of this Security]; or

 

(f)            any tax, assessment or other
governmental charge which would  not
have been so imposed but for the presentation by the Holder of this  Security for payment on a date more than 15 days after the date
on which  such payment became due and payable
or the date on which payment thereof is  duly
provided for, whichever occurs later;

 

nor will additional amounts be paid
with respect to any payment of amounts due with respect to this Security to any
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of any such payment to the extent that a beneficiary or
settlor with respect to such fiduciary, a member of such a partnership or the
beneficial owner would not have been entitled to the additional amounts had
such beneficiary, settlor, member or beneficial owner been the Holder of this
Security.  The term “United States
Alien” means any Person who, for United States federal income tax purposes, is
a foreign corporation, a non-resident alien individual, a non-resident alien
fiduciary of a foreign estate or trust or a foreign partnership one or more of
the members of which is, for United States federal income tax purposes, a
foreign corporation, a non-resident alien individual or a non-resident alien
fiduciary of a foreign estate or trust, and the term “United States” means the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.]

 

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, directly or through an Authenticating Agent,
by manual signature of an authorized signatory, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

 

B-5

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  [Seal]

  	
  By

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

									

 

[Form of Reverse]

 

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 September    , 1992 (herein called the
“Indenture”), between the Company and The First National Bank of Boston, 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 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
$             ].  As provided in the Indenture and subject to
certain limitations therein set forth, Registered Securities of this series are
exchangeable for a like aggregate principal amount of Registered Securities of
this series and of like tenor of any authorized denominations, as requested by
the Holder surrendering the same, upon surrender of the Security or Securities
to be exchanged at any office or agency described below where Registered
Securities of this series may be presented for registration of transfer.

 

[If
applicable, insert—The Securities of this series are subject to redemption
[(1)] [If applicable, insert—on
                           
in any year commencing with the year        
and ending with the year          
through operation of the sinking fund for this series at a Redemption Price
equal [Insert formula for determining the amount], [and]

 

B-6

 

(2)] [If applicable, insert—at any
time [on or after
                          ,
19    ], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
accreted value [or principal amount, as the case may be]): 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 accreted value [or principal amount, as the case may be], [If
applicable, insert—[and (       )] under the
circumstances described in the next [two] succeeding paragraph[s] at a
Redemption Price equal to [Insert formula for determining the amount]] [If the
Security is interest-bearing, insert—, together in the case of any such
redemption [If applicable, insert—(whether through operation of the sinking
fund or otherwise)] with accrued interest to the Redemption Date; provided,  however, that installments of interest on this Security whose
Stated Maturity is on or prior to such Redemption Date will be payable to the
Holder of this Security, or one or more Predecessor Securities, of record at
the close of busi- ness on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture].

 

[If
applicable, insert—The Securities of this series are subject to redemption (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 accreted value [or principal amount, as the case may be]) set forth in
the table below, and (2) at any time [on or after                     ,
19   ], 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 accreted value [or principal
amount, as the case may be]) set forth in the table below: If redeemed during
the 12-month period beginning
                                
of the years indicated,

 

B-7

 

	
  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 accreted value
[or principal amount, as the case may be]. 
[If applicable, insert—and (3) under the circumstances described in the
next [two] succeeding paragraph[s] at a Redemption Price equal to [Insert
formula for determining the amount]] [If the Security is interest-bearing,
insert—, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of  interest
on this Security whose Stated Maturity is on or prior to such Redemption Date
will be payable to the Holder of this Security, 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].]
[Notwithstanding the foregoing, the Company may not, prior to                                         ,
redeem any Securities of this series as contemplated by Clause [(2) above 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.]

 

[If
Securities of the series are to be offered to United States Aliens, insert—The
Securities of this series may be redeemed, as a whole but not in part, at the
option of the Company, determined as set forth in the preceding paragraph [If
the Security interest-bearing, insert—, together with interest accrued to the
date fixed for redemption,] if, as a result of any amendment to, or change in,
the laws or regulations of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or any amendment to or
change in an official interpretation or application of such laws or
regulations, which amendment or change is effective on or after
                              ,
19   , the Company will become obligated to pay additional
amounts (as described on the face hereof) [If the Security is interest-bearing,
insert— on the next succeeding Interest Payment Date] [If the Security is not
to bear interest prior to Maturity, insert—at Maturity or upon the sale or
exchange of any

 

B-8

 

Security]
and such obligation cannot be avoided by the use of reasonable measures
available to the Company; provided, however, that (a) no such notice of  redemption may be given earlier than 90 days prior to the
earliest date on which the Company would be obligated to pay such additional
amounts were a payment in respect of the Securities of this series then due [If
the Security is not to bear interest prior to Maturity, insert—or were a sale
or exchange of a Security of this series then made], and (b) at the time notice
of such redemption is given, such obligation to pay such additional amounts
remains in effect.  Immediately prior to
the publication of any notice of redemption pursuant to this paragraph, the
Company shall deliver to the Trustee a certificate stating that the Company is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Company so to redeem
have occurred.]

 

[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 accreted value [or principal amount, as the case may be] of
Securities of this series.  [Securities
of this series acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made—in the inverse
order in which they become due.]]

 

Notice
of redemption will be given by mail to Holders of Registered Securities, not
less than 30 nor more than 60 days prior to the date fixed for redemption, all
as provided in the Indenture.

 

In
the event of redemption of this Security in part only, a new Registered
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.

 

[The
Indenture contains provisions of defeasance of (a) the entire indebtedness of
this Security and (b) certain restrictive covenants upon compliance by the
Company with certain conditions set forth therein.]

 

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

 

B-9

 

be
declared due and payable in the manner and with the effect provided in the
Indenture.  Such amount shall be equal
to—insert formula for determining the amount. 
Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), 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.

 

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
set forth in, and subject to, the provisions of the Indenture, no Holder of any
Security of this series will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days; provided, however, that such  limitations do not

 

B-10

 

apply
to a suit instituted by the Holder hereof for the enforcement of payment of
amounts due with respect to this Security on or after the respective due dates
expressed herein.

 

No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay amounts due with respect to this Security
[(including any additional amounts, as described on the face hereof)] at the
times, place[s] and rate, and in the coin or currency, herein prescribed.

 

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable 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 amounts due with respect to 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 attorney duly authorized in writing, and
thereupon one or more new Registered 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.

 

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 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

 

B-11

 

is
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.

 

The
Indenture and the Securities and any coupons appertaining thereto shall be
governed by and construed in accordance with the laws of the State of New York.

 

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

 

B-12

FORM
OF ASSIGNMENT

 

(I)
or (we) assign and transfer this Security to                                                                                         
(Insert assignee’s soc.  sec.  or tax I.D. 
no.)

 

 

 

(Print
or type assignee’s name, address and zip code)

 

and
irrevocably appoint

 

agent
to transfer this Security on the books of the
                          Company.  The agent may
substitute another to act for him.

 

	
  Date:

  	
  Your
  Signature:  

  	
   

  	
   

  

 

 

(Sign
exactly as your name appears on the other side of this Security)

 

Signature
Guarantee.

 

B-13

 

EXHIBIT C

 

[Forms of Certification]

 

EXHIBIT C.1

 

[Form of Certificate to Be Given by
Euro-Clear

and Cedel S.A.  in Connection with the
Exchange of a

Portion of a Temporary Global Security]

 

CERTIFICATE

 

[Insert title or sufficient description

of Securities to be delivered]

 

This
is to certify with respect to $
             
principal amount of the above-captioned Securities (i) that we have received
from each of the persons appearing in our records as persons entitled to a portion
of such principal amount (our “Qualified Account Holders”) a certificate with
respect to such portion substantially in the form attached hereto, and (ii)
that we are not submitting herewith for exchange any portion of the temporary
global Security representing the above-captioned Securities excepted in such
certificates.

 

We
further certify that as of the date hereof we have not received any
notification from any of our Qualified Account Holders to the effect that the
state-ments made by such Qualified Account Holders with respect to any portion
of the part submitted herewith for exchange are no longer true and cannot be
relied upon as of the date hereof.

 

	
  Dated:                       ,
  19       

  	
   

  
	
  [To
  be dated no earlier

  than  the Exchange Date]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [MORGAN
  GUARANTY TRUST COMPANY

  OF NEW YORK, Brussels Office, as

  Operator of the Euro-clear System]

  [Cedel S.A.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  

 

C.1-1

 

EXHIBIT C.2

 

[Form of Certificate to Be Given by
Euro-Clear and Cedel

S.A.  to Obtain Interest Prior to an
Exchange Date]

 

CERTIFICATE

 

[Insert title or sufficient description of
Securities]

 

We
confirm that the interest payable on the Interest Payment Date on [Insert Date]
will be paid to each of the persons appearing in our records as being entitled
to interest payable on such date from whom we have received a written
certification, dated not earlier than such Interest Payment Date, substantially
in the form attached hereto.  We
undertake to retain certificates received from our member organizations in
connection herewith for four years from the end of the calendar year in which
such certificates are received.

 

We
undertake that any interest received by us and not paid as provided above shall
be returned to the Trustee for the above Securities immediately prior to the
expiration of two years after such Interest Payment Date in order to be repaid
by such Trustee to the above issuer at the end of two years after such Interest
Payment Date.

 

	
  Dated:                       ,
  19       

  	
   

  
	
  [To
  be dated on or after the

  relevant Interest Payment Date]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [MORGAN
  GUARANTY TRUST COMPANY

  OF NEW YORK, Brussels Office, as

  Operator of the Euro-clear System]

  [Cedel S.A.]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  

 

C.2-1

 

EXHIBIT C.3

 

[Form of Certificate to Be Given by Beneficial
Owners to

Obtain Interest Prior to an Exchange Date]

 

CERTIFICATE

 

[Insert title or sufficient description of
Securities]

 

This
is to certify that as of the Interest Payment Date on [Insert date] and except
as provided in the third paragraph hereof, none of the above- captioned
Securities held by you for our account was beneficially owned by a United
States person or, if any of such Securities held by you for our account were
beneficially owned by a United States person, such United States person either
provided an Internal Revenue Service Form W-9 with respect to such interest
payment or certified with respect to such interest payment that it was an
exempt recipient as defined in Section 1.6049-4(c)(1)(ii) of the United States
Treasury regulations.

 

As
used herein, “United States person” means any citizen or resident of the United
States, any corporation, partnership or other entity created or organized in or
under the laws of the United States and any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source,
and “United States” means the United States of America (including the States
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.

 

This
certificate excepts and does not relate to U.S.  $    principal amount of
the above-captioned Securities appearing in your books as being held for our
account as to which we are not yet able to certify and as to which we
understand interest cannot be credited unless and until we are able so to
certify.

 

C.3-1

 

We
understand that this certificate may be required in connection with certain tax
legislation in the United States.  If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings.

 

 

	
  Dated:                       ,
  19       

  	
   

  
	
  [To
  be dated on or after the relevant

  Interest Payment Date]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Person Entitled to

  Receive Interest]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Authorized
  Signatory)

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

C.3-2

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