sv3
As
filed with the Securities and Exchange Commission on February 18, 2010
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
PFSWEB, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or Other Jurisdiction of Incorporation or Organization)
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75-2837058
(I.R.S. Employer Identification Number) |
500 North Central Expressway
Plano, Texas 75074
(972) 881-2900
(Address, including zip code, and telephone number, including area code,
of registrants principal executive offices)
Mark C. Layton
Chief Executive Officer
PFSweb, Inc.
500 North Central Expressway
Plano, Texas 75074
(972) 881-2900
(Address, including zip code, and telephone number, including area code,
of agent for service)
Copies To:
Morris Bienenfeld
Wolff & Samson PC
One Boland Drive
West Orange, New Jersey 07052
Phone: (973) 530-2013
Fax: (973) 530-2213
Approximate date of commencement of proposed sale to the public: From time to time after this
registration statement becomes effective.
If the only securities being registered on this form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box. o
If any of the securities being registered on this form are to be offered on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, please check
the following box. þ
If this form is filed to register additional securities for an offering pursuant to Rule 462(b)
under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. o
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
If this form is a registration statement pursuant to General Instruction I.D. or a post-effective
amendment thereto that shall become effective upon filing with the Commission pursuant to Rule
462(e) under the Securities Act, check the following box. o
If this form is a post-effective amendment to a registration statement pursuant to General
Instruction I.D. filed to register additional securities or additional classes of securities
pursuant to Rule 413(b) under the Securities Act, check the following box. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o |
Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company þ
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum |
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Proposed Maximum |
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Title of Each Class of Securities to be |
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Amount to be |
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Offering Price Per |
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Aggregate Offering |
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Amount of |
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Registered (1) |
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Registered (1) |
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Unit (2) |
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Price |
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Registration Fee (3) |
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Common Stock, $0.001 par value per share (4) |
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Preferred Stock, $1.00 par value per share |
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Debt securities (5) |
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Warrants |
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Units (6) |
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Total |
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$30,000,000 |
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$2,139 |
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(1) There are being registered hereunder such indeterminate number of shares of common stock
and preferred stock, such indeterminate principal amount of debt securities, such indeterminate
number of warrants to purchase common stock, preferred stock and/or debt securities, and such
indeterminate number of units as may be sold by the registrant from time to time, which together
shall have an aggregate initial offering price not to exceed $30,000,000. If any debt securities
are issued at an original issue discount, then the offering price of such debt securities shall be
in such greater principal amount at maturity as shall result in an aggregate offering price not to
exceed $30,000,000, less the aggregate dollar amount of all securities previously issued hereunder.
Any securities registered hereunder may be sold separately or as units with the other securities
registered hereunder. The proposed maximum offering price per unit will be determined, from time to
time, by the registrant in connection with the issuance by the registrant of the securities
registered hereunder. Separate consideration may or may not be received for securities that are
issuable on exercise, conversion, or exchange of other securities or that are issued in units. The
securities registered hereunder also includes such indeterminate number of shares of common stock
and preferred stock and amount of debt securities as may be issued upon conversion of or exchange
for preferred stock or debt securities that provide for conversion or exchange, upon exercise of
warrants or pursuant to the antidilution provisions of any such securities. In addition, pursuant
to Rule 416 under the Securities Act, the shares being registered hereunder include such
indeterminate number of shares of common stock and preferred stock as may be issuable with respect
to the shares being registered hereunder as a result of stock splits, stock dividends or similar
transactions.
(2) The proposed maximum aggregate offering price per class of security will be determined from
time to time by the registrant in connection with the issuance by the registrant of the securities
registered hereunder and is not specified as to each class of security pursuant to General
Instruction II.D. of Form S-3 under the Securities Act.
(3) The registration fee for the unallocated securities registered hereby has been estimated solely
for the purpose of computing the registration fee calculated pursuant to Rule 457(o) under the
Securities Act.
(4) Includes associated rights to purchase shares of the registrants Series A preferred stock
(Purchase Rights) that are attached to all shares of our common stock, in accordance with the
Rights Agreement, dated as of June 8, 2000, as amended as of May 30, 2008, by and between the
registrant and Mellon Investor Services LLC, as successor to ChaseMellon Shareholder Services,
L.L.C., as rights agent (the Rights Agreement). The Purchase Rights are not exercisable until the
occurrence of certain events specified in the Rights Agreement, are evidenced by the stock
certificates representing common stock and are transferrable only with the common stock. The value
attributable to the Purchase Rights, if any, is reflected in the value of the common stock.
(5) The debt securities may consist of one or more series of senior debt securities or subordinated
debt securities as described in the applicable prospectus supplement.
(6) Each unit will be issued under a unit agreement or indenture and will represent an interest in
two or more securities, which may or may not be separable from one another.
The registrant hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission, acting pursuant to
said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell
securities under this registration statement until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to
sell any securities and it is not soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.
Subject
to Completion, Dated February 18, 2010
PROSPECTUS
$30,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We may from time to time may offer, issue and sell up to $30,000,000 of any combination of the
securities described in this prospectus, either individually or in units. We may also offer common
stock or preferred stock upon conversion of debt securities, common stock upon conversion of
preferred stock, or common stock, preferred stock or debt securities upon the exercise of warrants.
We will provide the specific terms of the securities to be offered in one or more supplements
to this prospectus. We may also authorize one or more free writing prospectuses to be provided to
you in connection with these offerings. The prospectus supplement and any related free writing
prospectus may also add, update or change information contained in this prospectus. You should
carefully read this prospectus, the applicable prospectus supplement and any related free writing
prospectus, as well as any documents incorporated by reference, before buying any of the securities
being offered. This prospectus may not be used to offer and sell our securities unless accompanied
by a prospectus supplement describing the method and terms of the offering of those offered
securities.
We may sell these securities directly to investors, through agents designated from time to
time or to or through underwriters or dealers, on a continuous or delayed basis. For additional
information on the methods of sale, you should refer to the section titled Plan of Distribution
in this prospectus. If any agents or underwriters are involved in the sale of any securities with
respect to which this prospectus is being delivered, the names of such agents or underwriters and
any applicable fees, commissions, discounts and over-allotment options will be set forth in a
prospectus supplement. The price to the public of such securities and the net proceeds that we
expect to receive from such sale will also be set forth in a prospectus supplement.
Investing in any of our securities involves risk. Please read carefully the section entitled
Risk Factors beginning on page 3 of this prospectus and contained in the applicable prospectus
supplement and any related free writing prospectus, and under similar headings in the other
documents that are incorporated by reference into this prospectus.
Our common stock is listed on the NASDAQ Capital Market under the symbol PFSW. As of
February 16, 2010, the aggregate market value of our outstanding common stock held by
non-affiliates was approximately $26.0 million. We have not issued any securities pursuant to
General Instruction I.B.6 of Form S-3 during the 12 calendar months prior to and including the date
of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is _____, 2010
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission, or SEC, utilizing a shelf registration process. Under this
shelf registration process, we may offer shares of our common stock or preferred stock, various
series of debt securities and/or warrants to purchase any of such securities, either individually
or in units, in one or more offerings, up to a total dollar amount of $30,000,000. This prospectus
provides you with a general description of the securities we may offer. Each time we offer a type
or series of securities under this prospectus, we will provide a prospectus supplement that will
contain more specific information about the terms of those securities. We may also authorize one or
more free writing prospectuses to be provided to you that may contain material information relating
to these offerings. We may also add or update in the prospectus supplement (and in any related free
writing prospectus that we may authorize to be provided to you) any of the information contained in
this prospectus or in the documents we have incorporated by reference into this prospectus. We urge
you to carefully read this prospectus, any applicable prospectus supplement and any related free
writing prospectus, together with the information incorporated herein by reference as described
under the heading Information We Incorporate by Reference, before buying any of the securities
being offered. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
You should rely only on the information contained or incorporated by reference in this
prospectus and in any prospectus supplement or in any free writing prospectus that we may provide
you. We have not authorized anyone to provide you with different information. You should not assume
that the information contained in this prospectus, any prospectus supplement, any document
incorporated by reference or any free writing prospectus is accurate as of any date, other than the
date mentioned on the cover page of these documents. We are not making offers to sell the
securities in any jurisdiction in which an offer or solicitation is not authorized or in which the
person making such offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make an offer or solicitation.
This prospectus contains summaries of certain provisions contained in some of the documents
described herein, but reference is made to the actual documents for complete information. All of
the summaries are qualified in their entirety by the actual documents. The registration statement
containing this prospectus, including exhibits to the registration statement, provides additional
information about us and the securities offered under this prospectus. Copies of some of the
documents referred to herein have been filed, will be filed or will be incorporated by reference as
exhibits to the registration statement of which this prospectus is a part, and you may obtain
copies of those documents as described below under the heading Where You Can Find Additional
Information.
In this prospectus, we refer to common stock, preferred stock, debt securities, warrants and
units collectively as securities. Unless otherwise mentioned or unless the context requires
otherwise, all references in this prospectus to we, us, our, the Company, and similar
references refer to PFSweb, Inc., a Delaware corporation, and its wholly-owned subsidiaries; except
that in the description of the securities we may offer these terms refer solely to PFSweb, Inc. and
not to any of our subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational reporting requirements of the Securities Exchange Act of
1934. We file reports, proxy statements and other information with the SEC. Our SEC filings are
available over the Internet at the SECs website at http://www.sec.gov. You may read and copy any
reports, statements and other information filed by us at the SECs Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the
Public Reference Room.
We make available, free of charge, on our website at http://www.pfsweb.com, our annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those
reports and statements as soon as reasonably practicable after they are filed with the SEC. The
contents of our website are not part of this prospectus, and the reference to our website does not
constitute incorporation by reference into this prospectus of the information contained at that
site, other than documents we file with the SEC that are incorporated by reference into this
prospectus.
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INFORMATION WE INCORPORATE BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus the information in
documents we file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is considered to be a
part of this prospectus, and information that we file later with the SEC will automatically update
and supersede this information. Any statement contained in any document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained in or omitted from this prospectus or any
accompanying prospectus supplement, or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
We incorporate by reference the documents listed below and any future documents that we file
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the date of the
initial filing of the registration statement of which this prospectus forms a part and prior to the
effectiveness of the registration statement and (2) after the date of this prospectus until the
offering of the securities is terminated.
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our annual report on Form 10-K for the year ended December 31, 2008, as amended by the
Form 10-K/A Amendment No. 1 thereto; |
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our quarterly reports on Form 10-Q for the quarters ended March 31, 2009, as amended by
the Form 10-Q/A Amendment No. 1 thereto, June 30, 2009, as amended by the Form 10-Q/A
Amendment No. 1 thereto, and September 30, 2009; |
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our current reports on Form
8-K filed on January 6, 2009 and January 9, 2009; and |
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the description of our common stock set forth in the registration statement on Form 8-A
filed on June 14, 2000, and all amendments and reports filed for the purpose of updating
that description. |
We will not, however, incorporate by reference in this prospectus any documents or portions
thereof that are not deemed filed with the SEC, including any information furnished pursuant to
Item 2.02 or Item 7.01 of our current reports on Form 8-K unless, and except to the extent,
specified in such current reports.
We will provide you with a copy of any of these filings (other than an exhibit to these
filings, unless the exhibit is specifically incorporated by reference into the filing requested) at
no cost, if you submit a request to us by writing or telephoning us at the following address and
telephone number:
PFSweb, Inc.
500 North Central Expressway
Plano, Texas 75074
(972) 881-2900
Attn: Secretary
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THE COMPANY
We are an international provider of integrated eCommerce and business process outsourcing
solutions. We provide these solutions to major brand name companies seeking to optimize their
supply chain efficiencies and to extend their traditional business and e-commerce initiatives.
Through our eCOST.com business unit, we are also a leading multi-category online discount retailer
of new, close-out and recertified brand-name merchandise, as well as an online retailer of name
brand household and other goods.
Corporate Information
We are incorporated in Delaware and our headquarters are located at 500 North Central
Expressway, Plano, Texas 75074. Our telephone number is (972) 881-2900. Our website is
http://www.pfsweb.com. The information accessible through our website is not part of this
prospectus, other than the documents that we file with the SEC that are incorporated by reference
into this prospectus.
RISK FACTORS
Investing in our securities involves risk. Prior to making a decision about investing in our
securities, you should carefully consider the specific factors discussed under the heading Risk
Factors in our most recent annual report on Form 10-K and in our most recent quarterly reports on
Form 10-Q, which are incorporated herein by reference and may be amended, supplemented or
superseded from time to time by other reports we file with the SEC in the future. The risks and
uncertainties we have described are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also affect our operations. If
any of these risks actually occurs, our business, results of operations and financial condition
could suffer. In that case, the trading price of our securities could decline, and you could lose
all or a part of your investment.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents incorporated by reference, contains, and any
prospectus supplement may contain, statements that constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by the use of predictive, future-tense or forward-looking terminology,
such as anticipates, believes, can, continue, could, estimates, expects, intends,
may, plans, potential, should, will, or other similar expressions. These statements speak
only as of the date of this prospectus, the date of the prospectus supplement or the date of the
document incorporated by reference, as applicable, and we undertake no ongoing obligation, other
than that imposed by law, to update these statements. These statements appear in a number of places
in this prospectus, including the documents incorporated by reference, and relate to, among other
things, our growth strategy, and our future financial performance, including our operations,
economic performance, financial condition, prospects, and other future events.
In addition, a number of known and unknown risks, uncertainties, and other factors could
affect the accuracy of these statements. These risks may cause our actual results, levels of
activity, performance, or achievements to differ materially from any future results, levels of
activity, performance, or achievements expressed or implied by these forward-looking statements.
Important factors to consider in evaluating our forward-looking statements include:
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our ability to retain and expand relationships with existing clients and attract
and implement new clients; |
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our reliance on the fees generated by the transaction volume or product sales of
our clients; |
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our reliance on our clients projections or transaction volume or product sales; |
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our dependence upon our agreements with International Business Machines
Corporation (IBM) and InfoPrint Solutions Company (IPS), a joint venture
company owned by Ricoh and IBM; |
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our dependence upon our agreements with our major clients; |
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our client mix, their business volumes and the seasonality of their business; |
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our ability to finalize pending contracts; |
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the impact of strategic alliances and acquisitions; |
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trends in e-commerce, outsourcing, government regulation both foreign and
domestic and the market for our services; |
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whether we can continue and manage growth; |
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increased competition; |
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our ability to generate more revenue and achieve sustainable profitability; |
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effects of changes in profit margins; |
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the customer and supplier concentration of our business; |
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the reliance on third-party subcontracted services; |
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the unknown effects of possible system failures and rapid changes in technology; |
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foreign currency risks and other risks of operating in foreign countries; |
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potential litigation; |
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our dependency on key personnel; |
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the impact of new accounting standards, and changes in existing accounting rules
or the interpretations of those rules; |
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our ability to raise additional capital or obtain additional financing; |
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our ability and the ability of our subsidiaries to borrow under current
financing arrangements and maintain compliance with debt covenants; |
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relationship with and our guarantees of certain of the liabilities and
indebtedness of our subsidiaries; |
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taxation on the sale of our products; |
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eCOSTs ability to maintain existing and build new relationships with
manufacturers and vendors and the success of its advertising and marketing efforts; |
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eCOSTs ability to increase its sales revenue and sales margin and improve
operating efficiencies; and |
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eCOSTs ability to generate projected cash flows sufficient to cover the values
of its intangible assets. |
4
These factors and the other risk factors described in this prospectus and any accompanying
prospectus supplement, including the documents incorporated by reference, are not necessarily all
of the important factors that could cause actual results to differ materially from those expressed
in any of our forward-looking statements. Other unknown or unpredictable factors also could harm
our results. Consequently, there can be no assurance that the actual results or developments
anticipated by us will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on us. We cannot guarantee that any forward-looking statement
will be realized, although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and inaccurate assumptions.
THE SECURITIES WE MAY OFFER
We may offer shares of our common stock or preferred stock, various series of debt securities
and/or warrants to purchase any of such securities, either individually or in units, in one or more
offerings, with a total value of up to $30,000,000 from time to time under this prospectus at
prices and on terms to be determined by market conditions at the time of any offering. This
prospectus provides you with a general description of the securities we may offer. Each time we
offer a type or series of securities under this prospectus, we will provide a prospectus supplement
that will describe the specific amounts, prices and other important terms of the securities
including, to the extent applicable:
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designation or classification; |
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aggregate principal amount or aggregate offering price; |
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maturity, if applicable; |
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original issue discount, if any; |
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rates and times of payment of interest or dividends, if any; |
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redemption, conversion, exercise, exchange or sinking fund terms, if any; |
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ranking; |
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restrictive covenants, if any; |
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voting or other rights, if any; |
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conversion prices, if any; and |
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important United States federal income tax considerations. |
The prospectus supplement and any related free writing prospectus that we may authorize to be
provided to you may also add or update information contained in this prospectus or in documents we
have incorporated by reference. However, no prospectus supplement or free writing prospectus will
offer a security that is not registered and described in this prospectus at the time of the
effectiveness of the registration statement of which this prospectus is a part.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY
A PROSPECTUS SUPPLEMENT.
We may sell the securities directly to investors or to or through agents, underwriters or
dealers. We, and our agents or underwriters, reserve the right to accept or reject all or part of
any proposed purchase of securities. If we do offer securities to or through agents or
underwriters, we will include in the applicable prospectus supplement:
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the names of those agents or underwriters; |
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applicable fees, discounts and commissions to be paid to them; |
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details regarding over-allotment options, if any; and |
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the net proceeds to us. |
Common Stock. We may issue shares of our common stock from time to time. The holders of
common stock are entitled to one vote for each share held of record on all matters submitted to a
vote of stockholders and do not have cumulative voting rights. Subject to preferences that may be
applicable to any outstanding shares of preferred stock, the holders of common stock are entitled
to receive ratably only those dividends as may be declared by our board of directors out of legally
available funds. Upon our liquidation, dissolution or winding up, holders of our common stock are
entitled to share ratably in all assets remaining after payment of liabilities and the liquidation
preferences of any outstanding shares of preferred stock.
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Preferred Stock. We may issue shares of our preferred stock from time to time, in one or
more series. Under our certificate of incorporation, as amended, our board of directors has the
authority, without further action by stockholders, to designate up to 1,000,000 shares of preferred
stock in one or more series and to fix the rights, preferences, privileges, qualifications and
restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion
rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund
terms, any or all of which may be greater than the rights of the common stock.
If we sell any series of preferred stock under this prospectus, we will fix the designations,
powers, preferences and rights of such series of preferred stock, as well as the qualifications,
limitations or restrictions thereon, in the certificate of designation relating to that series. We
will file as an exhibit to the registration statement of which this prospectus is a part, or will
incorporate by reference from reports that we file with the SEC, the form of any certificate of
designation that describes the terms of the series of preferred stock we are offering before the
issuance of the related series of preferred stock. We urge you to read the applicable prospectus
supplement (and any free writing prospectus that we may authorize to be provided to you) related to
the series of preferred stock being offered, as well as the complete certificate of designation
that contains the terms of the applicable series of preferred stock.
Debt Securities. We may issue debt securities from time to time, in one or more series, as
either senior or subordinated debt or as senior or subordinated convertible debt. The senior debt
securities will rank equally with any other unsecured and unsubordinated debt. The subordinated
debt securities will be subordinate and junior in right of payment, to the extent and in the manner
described in the instrument governing the debt, to all of our senior indebtedness. Convertible debt
securities will be convertible into or exchangeable for our common stock or our other securities.
Conversion may be mandatory or at your option and would be at prescribed conversion rates.
The debt securities will be issued under one or more indentures, which are contracts between
us and a national banking association or other eligible party, as trustee. In this prospectus, we
have summarized certain general features of the debt securities. We urge you, however, to read the
applicable prospectus supplement (and any free writing prospectus that we may authorize to be
provided to you) related to the series of debt securities being offered, as well as the complete
indentures that contain the terms of the debt securities. Forms of indentures have been filed as
exhibits to the registration statement of which this prospectus is a part, and supplemental
indentures and forms of debt securities containing the terms of the debt securities being offered
will be filed as exhibits to the registration statement of which this prospectus is a part or will
be incorporated by reference from reports that we file with the SEC.
Warrants. We may issue warrants for the purchase of common stock, preferred stock and/or
debt securities in one or more series. We may issue warrants together with common stock, preferred
stock and/or debt securities, and the warrants may be attached to or separate from these
securities. In this prospectus, we have summarized certain general features of the warrants. We
urge you, however, to read the applicable prospectus supplement (and any free writing prospectus
that we may authorize to be provided to you) related to the particular series of warrants being
offered, as well as the complete warrant agreements and warrant certificates that contain the terms
of the warrants. We will file as an exhibit to the registration statement of which this prospectus
is a part, or will incorporate by reference from reports that we file with the SEC, forms of the
warrant agreements and forms of warrant certificates containing the terms of the warrants being
offered.
We will evidence each series of warrants by warrant certificates that we will issue. Warrants
may be issued under an applicable warrant agreement that we enter into with a warrant agent. We
will indicate the name and address of the warrant agent, if applicable, in the prospectus
supplement relating to the particular series of warrants being offered.
Units. We may issue, in one or more series, units consisting of common stock, preferred
stock, debt securities and/or warrants for the purchase of common stock, preferred stock and/or
debt securities in any combination. In this prospectus, we have summarized certain general features
of the units. We urge you, however, to read the applicable prospectus supplement (and any free
writing prospectus that we may authorize to be provided to you) related to the series of units
being offered, as well as the complete unit agreement that contains the terms of the units. We will
file as exhibits to the registration statement of which this prospectus is a part, or will
incorporate by
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reference from reports that we file with the SEC, the form of unit agreement and any supplemental
agreements that describe the terms of the series of units it is offering before the issuance of the
related series of units.
DILUTION
We may set forth in a prospectus supplement the following information regarding any material
dilution of the equity interests of investors purchasing equity securities in an offering under
this prospectus:
the net tangible book value per share of our equity securities before and after
the offering; |
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the amount of the increase in such net tangible book value per share attributable
to the cash payments made by purchasers in the offering; and |
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the amount of the immediate dilution from the public offering price which will be
absorbed by such purchasers. |
USE OF PROCEEDS
Unless we inform you otherwise in the applicable prospectus supplement, we expect to use the
net proceeds from the sale of securities for general corporate purposes, including, but not limited
to, working capital, payment obligations and capital expenditures. Pending any specific
application, we may initially invest funds in debt instruments of the U.S. government and its
agencies, corporate debt securities, floating-rate notes and investment grade commercial paper.
DESCRIPTION OF OUR CAPITAL STOCK
We are authorized to issue 35,000,000 shares of common stock, par value $0.001 per share, and
1,000,000 shares of preferred stock, par value $1.00 per share.
Common Stock
This section describes the general terms and provisions of our common stock. For more detailed
information, you should refer to our Amended and Restated Certificate of Incorporation, as amended,
and Bylaws, copies of which have been filed with the SEC. These documents are also incorporated by
reference into the registration statement of which this prospectus forms a part.
Holders of shares of common stock will be entitled to receive dividends if and when declared
by the board of directors from funds legally available therefor, and, upon liquidation, dissolution
or winding-up of our company, will be entitled to share ratably in all assets remaining after
payment of liabilities. The holders of shares of common stock will not have any preemptive rights,
but will be entitled to one vote for each share of common stock held of record. Stockholders will
not have the right to cumulate their votes for the election of directors. The shares of common
stock offered hereby, when issued, will be fully paid and nonassessable.
Preferred Stock
This section describes the general terms and provisions of our preferred stock. For more
detailed information, you should refer to our Amended and Restated Certificate of Incorporation, as
amended, and Bylaws, copies of which have been filed with the SEC. These documents are also
incorporated by reference into the registration statement of which this prospectus forms a part.
Our board of directors is authorized, without action by our stockholders, to designate and
issue up to 1,000,000 shares of preferred stock, par value $1.00 per share, in one or more series.
The board of directors can fix the rights, preferences and privileges of the shares of each series
and any of its qualifications, limitations or restrictions. Our board of directors may authorize
the issuance of preferred stock with voting or conversion rights that could adversely affect the
voting power or other rights of the holders of common stock. The issuance of preferred stock, while
providing flexibility in connection with possible future financings, acquisitions and other
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corporate purposes could, under certain circumstances, have the effect of delaying, deferring or
preventing a change in control of us and could adversely affect the market price of our common
stock. We do not have any shares of preferred stock outstanding, and we have no current plans to
issue any preferred stock.
Preferred Share Purchase Rights
Each outstanding share of our common stock has attached to it one preferred share purchase
right (the Rights) that entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Preferred Stock, par value $1.00 per share (Series A
Shares), at an initial price of $67 (the Purchase Price), subject to adjustment. The Purchase Price shall
be paid in cash. The description and terms of the Rights are set forth in a Rights Agreement, dated
as of June 8, 2000, as amended as of May 30, 2008, between the Company and Mellon Investor Services
LLC, as successor to ChaseMellon Shareholder Services, L.L.C., as rights agent (the Rights
Agreement).
Until the earlier to occur of (a) 10 business days following a public announcement that a
person or group of affiliated or associated persons (collectively, an Acquiring Person) has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more of our outstanding
common stock or (b) 15 business days (or such later date as may be determined by the action of our
board of directors before any person becomes an Acquiring Person) following the commencement of a
tender offer or exchange offer if, upon consummation thereof, such person or group would be the
beneficial owner of 20% or more of our outstanding common stock (the earlier of such dates being
called the Separation Date), the Rights will be evidenced by the certificates representing our
common stock. The Rights Agreement provides that, until the Separation Date, the Rights will be
transferred with, and only with, common stock certificates. Until the Separation Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any certificates for common
stock will also constitute the transfer of the Rights associated with the common stock represented
by such certificates. As soon as practicable following the Separation Date, separate certificates
evidencing the Rights (Right Certificates) will be mailed to holders of record of our common
stock as of the close of business on the Separation Date and, thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Separation Date and will expire on July 6, 2010 (the
Final Expiration Date), unless earlier redeemed by the Company. The Company may also extend the
Final Expiration Date to a later date.
In the event that (a) a person (other than the Company and its affiliates) becomes the
beneficial owner of 20% or more of the then outstanding common stock (in any manner, except
pursuant to (i) the exercise of stock options granted pursuant to the Companys existing and future
stock option plans, and (ii) the exercise of conversion rights contained in specified stock issues
of the Company), or (b) the board of directors declares any person to be an adverse person upon a
determination that such person has become the beneficial owner of a substantial amount of common
stock (which shall in no event be less than 10% of the common stock then outstanding), the Rights
Agreement provides that proper provision shall be made so that each holder of a Right will
thereafter be entitled to receive, upon exercise, common stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times the exercise price
of the Right.
In the event that, at any time following the first date of public announcement by the Company
or an Acquiring Person indicating that an Acquiring Person has become such (the Shares
Acquisition Date), (a) the Company engages in a merger or other business combination transaction
in which the Company is not the surviving corporation, (b) the Company engages in a merger or other
business combination transaction with another person in which the Company is the surviving
corporation, but in which its common stock are changed or exchanged or (c) 50% or more of the
Companys assets or earning power is sold or transferred, the Rights Agreement provides that proper
provision shall be made so that each holder of a Right shall thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the Right, common shares of the
acquiring company having a value equal to two times the exercise price of the Right.
The board of directors may, at its option, at any time after the right of the board of
directors to redeem the Rights has expired or terminated (with certain exceptions), exchange all or
part of the then outstanding and exercisable Rights (other than those held by the Acquiring Person)
for common stock at a ratio of one share of
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common stock per Right, as adjusted; provided, however, that such Right cannot be exercised once a
person, together with such persons affiliates and associates, becomes the owner of 50% or more of
the outstanding common stock. If the board of directors authorize such an exchange, the Rights will
immediately cease to be exercisable.
Notwithstanding any of the foregoing, following the occurrence of any of the events set forth
in the Rights Agreement, any Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person shall immediately become null
and void. The Rights Agreement contains provisions intended to prevent the utilization of voting
trusts or similar arrangements that could have the effect of rendering ineffective or circumventing
the beneficial ownership rules set forth in the Rights Agreement.
The Purchase Price payable, and the number of Series A Shares or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent
dilution (a) in the event of a dividend of Series A Shares on, or a subdivision, combination or
reclassification of, the Series A Shares, (b) upon the grant to holders of the Series A Shares of
certain rights or warrants to subscribe for Series A Shares or securities convertible into Series A
Shares at less than the current market price of the Series A Shares or (c) upon the distribution to
holders of the Series A Shares of debt securities or assets (excluding regular quarterly cash
dividends and dividends payable in Series A Shares) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares that
are not integral multiples of one one-thousandth of a Series A Share will be issued and, in lieu
thereof, an adjustment in cash will be made based on the closing price of the Series A Shares on
the last trading date prior to the date of exercise.
At any time after the date of the Rights Agreement until the earlier of (A) the date a person
becomes an Acquiring Person or (B) the Final Expiration Date, the board of directors may redeem the
Rights in whole, but not in part, at a price of $0.001 per Right, subject to adjustment (the
Redemption Price). Immediately upon the action of the board ordering redemption of the Rights,
the Rights will no longer be exercisable. Thereafter the only right of the holders of Rights will
be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including, without limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for common stock (or other consideration) of the Company or for common shares of the
Acquiring Person as set forth above.
The provisions of the Rights Agreement may be amended by the board of directors without
approval of the holders of Rights; provided, however, that following the date on which a person has
become an Acquiring Person, no such amendment will adversely affect the interests of holders of
Rights.
The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a
person or group that attempts to acquire us on terms not approved by our board of directors, except
pursuant to an offer conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by our board of
directors since the Rights may be redeemed by us at the redemption price prior to the occurrence of
a Separation Date. The foregoing description of the rights is qualified in its entirety by
reference to the Rights Agreement
Transfer Agent and Registrar
We have appointed BNY Mellon Shareowner Services as the transfer agent and registrar for our
common stock.
Listing
Our common stock is listed on the NASDAQ Capital Market under the symbol PFSW.
9
DESCRIPTION OF DEBT SECURITIES
The following description, together with the additional information we include in any
applicable prospectus supplement, summarizes the material features, terms and provisions of any
debt securities that we may offer under this prospectus. This summary does not purport to be
complete and may not contain all the information that is important to you. Therefore, you should
read the applicable prospectus supplement relating to those debt securities and any other offering
materials that we may provide. We may issue debt securities, in one or more series, as either
senior or subordinated debt or as senior or subordinated convertible debt. Unless otherwise stated
in the applicable prospectus supplement, we will not be limited in the amount of debt securities
that we may issue, and neither the senior debt securities nor the subordinated debt securities will
be secured by any of our property or assets. Thus, by owning debt securities, you are one of our
unsecured creditors. While the terms we have summarized below will apply generally to any debt
securities that we may offer under this prospectus, we will describe the particular terms of any
debt securities that we may offer in more detail in the applicable prospectus supplement. The terms
of any debt securities offered under a prospectus supplement may differ from the terms described
below. For any debt securities that we may offer, an indenture (and any relevant supplemental
indenture) will contain additional important terms and provisions and will be incorporated by
reference as an exhibit to the registration statement that includes this prospectus, or as an
exhibit to a current report on Form 8-K, incorporated by reference in this prospectus. Unless the
context requires otherwise, whenever we refer to the indentures, we also are referring to any
supplemental indentures that specify the terms of a particular series of debt securities.
We conduct substantially all of our operations though subsidiaries. As a result, claims of
holders of debt securities will generally have a junior position to claims of creditors of our
subsidiaries, except to the extent that we may be recognized as a creditor of those subsidiaries.
In addition, our right to participate as a stockholder in any distribution of assets of any
subsidiary (and thus the ability of holders of debt securities to benefit from such distribution as
our creditors) is junior to creditors of each subsidiary.
We may issue senior debt securities or subordinated debt securities under one or separate
indentures, which may be supplemented or amended from time to time. Senior debt securities will be
issued under one or more senior indentures that we will enter into with the trustees named in such
senior indentures and subordinated debt securities will be issued under one or more subordinated
indentures that we will enter into with the trustees named in such subordinated indentures. Any
senior debt indentures and subordinated debt indentures are referred to individually in this
prospectus as the indenture and collectively as the indentures. The particular terms of a
series of debt securities will be described in a prospectus supplement relating to such series of
debt securities. Any indentures will be subject to, governed by and qualified under, the Trust
Indenture Act of 1939, as amended, and may be supplemented or amended from time to time following
their execution. We use the term debenture trustee to refer to either a trustee under a senior
indenture or a trustee under a subordinated indenture, as applicable. We have filed forms of
indentures to the registration statement of which this prospectus is a part, and supplemental
indentures and forms of debt securities containing the terms of the debt securities being offered
will be filed as exhibits to the registration statement of which this prospectus is a part or will
be incorporated by reference from reports that we file with the SEC.
Any indentures will contain the full legal text of the matters described in this section of
the prospectus. Because this section is a summary, it does not describe every aspect of the debt
securities or any applicable indentures. This summary is therefore subject to and is qualified in
its entirety by reference to all the provisions of any applicable indenture, including any
definitions of terms used in such indenture. Your rights will be defined by the terms of any
applicable indenture, not the summary provided herein. This summary is also subject to and
qualified by reference to the description of the particular terms of a particular series of debt
securities described in the applicable prospectus supplement or supplements.
The debt securities may be denominated and payable in U.S. dollars. We may also issue debt
securities, from time to time, with the principal amount, interest or other amounts payable on any
relevant payment date to be determined by reference to one or more currency exchange rates,
securities or baskets of securities, commodity prices, indices or any other financial, economic or
other measure or instrument, including the occurrence or non-occurrence of any event or
circumstance. In addition, we may issue debt securities as part of any units issued by us. All
references in this prospectus or any prospectus supplement to other amounts will include premiums,
if any, other
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cash amounts payable under the applicable indenture, and the delivery of securities or baskets
of securities under the terms of the debt securities. Debt securities may bear interest at a fixed
rate, which may be zero, or a floating rate.
Some of the debt securities may be issued as original issue discount debt securities. Original
issue discount securities bear no interest or bear interest at below market rates and will be sold
at a discount below their stated principal amount. A prospectus supplement relating to an issue of
original issue discount securities will contain information relating to United States federal
income tax, accounting, and other special considerations applicable to original issue discount
securities.
We will set forth in the applicable prospectus supplement the terms, if any, on which a series
of debt securities may be convertible into or exchangeable for our preferred stock, common stock or
other securities. We will include provisions as to whether conversion or exchange is mandatory, at
the option of the holder or at our option. We may include provisions pursuant to which the number
of shares of our preferred stock, common stock or other securities that holders of the series of
debt securities receive would be subject to adjustment.
We will generally have no obligation to repurchase, redeem, or change the terms of debt
securities upon any event (including a merger, consolidation, change in control or disposition of
substantially all of our assets) that might have an adverse effect on our credit quality.
The following summaries of material provisions of the senior debt securities, the subordinated
debt securities and the indentures are subject to, and qualified in their entirety by reference to,
all of the provisions of the indenture applicable to a particular series of debt securities. We
urge you to read the applicable prospectus supplements and any related free writing prospectuses
related to the debt securities that we may offer under this prospectus, as well as the complete
indentures that contains the terms of the debt securities. Except as we may otherwise indicate, the
terms of the senior indenture and the subordinated indenture are identical.
General
We will describe in the applicable prospectus supplement the terms of the series of debt
securities being offered, including:
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the principal amount being offered, and if a series, the total amount authorized and the
total amount outstanding; |
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any limit on the amount that may be issued; |
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whether or not we will issue the series of debt securities in global form, the terms and
who the depositary will be; |
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the maturity date; |
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the principal amount due at maturity; |
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whether and under what circumstances, if any, we will pay additional amounts on any debt
securities held by a person who is not a United States person for tax purposes, and whether
we can redeem the debt securities if we have to pay such additional amounts; |
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the annual interest rate, which may be fixed or variable, or the method for determining
the rate and the date interest will begin to accrue, the dates interest will be payable and
the regular record dates for interest payment dates or the method for determining such
dates; |
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whether or not the debt securities will be convertible into shares of common stock,
preferred stock or other securities and, if so, the terms of such conversion; |
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whether or not the debt securities will be secured or unsecured, and the terms of any
secured debt; |
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the terms of the subordination of any series of subordinated debt; |
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the place where payments will be payable; |
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restrictions on transfer, sale or other assignment, if any; |
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our right, if any, to defer payment of interest and the maximum length of any such
deferral period; |
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the date, if any, after which, and the price at which, we may, at our option, redeem the
series of debt securities pursuant to any optional or provisional redemption provisions and
the terms of those redemption provisions; |
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the date, if any, on which, and the price at which we are obligated, pursuant to any
mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the
holders option to purchase, the series of debt securities and the currency or currency
unit in which the debt securities are payable; |
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whether the indenture will restrict our ability and/or the ability of our subsidiaries
to: |
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incur additional indebtedness; |
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issue additional securities; |
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create liens; |
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pay dividends and make distributions in respect of our capital stock and the capital
stock of our subsidiaries; |
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redeem capital stock; |
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place restrictions on our subsidiaries ability to pay dividends, make distributions or
transfer assets; |
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make investments or other restricted payments; |
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sell or otherwise dispose of assets; |
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enter into sale-leaseback transactions; |
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engage in transactions with stockholders and affiliates; |
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issue or sell stock of our subsidiaries; |
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effect a consolidation or merger; |
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whether the indenture will require us to maintain any interest coverage, fixed charge,
cash flow-based, asset-based or other financial ratios; |
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a discussion of any material United States federal income tax considerations applicable
to the debt securities; |
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information describing any book-entry features; |
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provisions for a sinking fund purchase or other analogous fund, if any; |
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the applicability of the provisions in the indenture on discharge; |
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whether the debt securities are to be offered at a price such that they will be deemed
to be offered at an original issue discount as defined in paragraph (a) of Section 1273
of the Internal Revenue Code; |
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the currency of payment of debt securities if other than U.S. dollars and the manner of
determining the equivalent amount in U.S. dollars; |
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the denominations in which we will issue the series of debt securities, if other than
denominations of $1,000 and any integral multiple thereof; |
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whether we and/or the debenture trustee may change an indenture without the consent of
any holders; |
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the form of debt security and how it may be exchanged and transferred; |
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the governing law of the indentures and debt securities; |
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our ability to be discharged from our obligations with respect to one or more series of
debt securities; |
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the description of the debenture trustee and paying agent, and the method of payments;
and |
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any other specific terms, preferences, rights or limitations of, or restrictions on, the
debt securities, including any additional events of default, acceleration with or without
notice, indemnity or covenants provided with respect to the debt securities, rights to
institute a proceeding under the indentures and any terms that may be required by us or
advisable under applicable laws or regulations. |
Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms upon which a series of debt
securities may be convertible into or exchangeable for our common stock or our other securities. We
will include provisions as to whether conversion or exchange is mandatory, at the option of the
holder or at our option. We may include provisions pursuant to which the number of shares of our
common stock or our other securities that the holders of the series of debt securities receive
would be subject to adjustment.
Consolidation, Merger or Sale
Unless we provide otherwise in the prospectus supplement applicable to a particular series of
debt securities, the indentures will not contain any covenant that restricts our ability to merge
or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our
assets. However, any successor to or acquirer of such assets must assume all of our obligations
under the indentures or the debt securities, as appropriate. If the debt securities are convertible
into or exchangeable for our other securities or securities of other entities, the entity with whom
we consolidate or merge or to whom we sell all of our property must make provisions for the
conversion of the debt securities into securities that the holders of the debt securities would
have received if they had converted the debt securities before the consolidation, merger or sale.
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of common stock, preferred stock and/or debt
securities, in one or more series. We may issue warrants independently or together with common
stock, preferred stock and/or debt securities, and the warrants may be attached to or separate from
these securities. While the terms summarized below will apply generally to any warrants that we may
offer, we will describe the particular terms of any series of warrants in more detail in the
applicable prospectus supplement. The terms of any warrants offered under a prospectus supplement
may differ from the terms described below.
We will file as exhibits to the registration statement of which this prospectus is a part, or
will incorporate by reference from reports that we file with the SEC, the form of warrant agreement
that describes the terms of the particular series of warrants we are offering before the issuance
of the related series of units. The following
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summaries of material provisions of the warrants and the warrant agreements are subject to,
and qualified in their entirety by reference to, all the provisions of the warrant agreement and
warrant certificate applicable to the particular series of warrants that we may offer under this
prospectus. We urge you to read the applicable prospectus supplements related to the particular
series of warrants that we may offer under this prospectus, as well as any related free writing
prospectuses, and the complete warrant agreements that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplement the terms of the series of warrants
being offered, including:
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the offering price of securities that include such warrants and aggregate number of
warrants offered; |
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if applicable, the designation and terms of the securities with which the warrants are
issued and the number of warrants issued with each such security or each principal amount
of such security; |
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in the case of warrants to purchase debt securities, the principal amount of debt
securities purchasable upon exercise of one warrant and the price at, and currency in
which, this principal amount of debt securities may be purchased upon such exercise; |
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in the case of warrants to purchase common stock or preferred stock, the number of
shares of common stock or preferred stock, as the case may be, purchasable upon the
exercise of one warrant and the price at which these shares may be purchased upon such
exercise; |
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the effect of any merger, consolidation, sale or other disposition of our business on
the warrant agreements and the warrants; |
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the terms of any rights to redeem or call the warrants; |
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any provisions for changes to or adjustments in the exercise price or number of
securities issuable upon exercise of the warrants; |
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the dates on which the right to exercise the warrants will commence and expire; |
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the manner in which the warrant agreements may be modified; |
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a discussion of any material or special United States federal income tax consequences of
holding or exercising the warrants; |
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the terms of the securities issuable upon exercise of the warrants; and |
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any other specific terms, preferences, rights or limitations of or restrictions on the
warrants. |
Before exercising their warrants, holders of warrants will not have any of the rights of
holders of the securities purchasable upon such exercise, including:
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in the case of warrants to purchase debt securities, the right to receive payments of
principal of, or premium, if any, or interest on, the debt securities purchasable upon
exercise or to enforce covenants in the applicable indenture; or |
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in the case of warrants to purchase common stock or preferred stock, the right to
receive dividends, if any, or payments upon our liquidation, dissolution or winding up or
to exercise voting rights, if any. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the
applicable prospectus
14
supplement at the exercise price that we describe in the applicable prospectus supplement.
Holders of the warrants may exercise the warrants at any time up to the specified time on the
expiration date that we set forth in the applicable prospectus supplement. After the close of
business on the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the warrant agreement
representing the warrants to be exercised together with specified information, and paying the
required amount to us in immediately available funds, as provided in the applicable prospectus
supplement.
Upon receipt of the required payment and the warrant agreement properly completed and duly
executed at our or any other office indicated in the applicable prospectus supplement, we will
issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants
represented by the warrant agreement are exercised, then we will issue a new warrant agreement for
the remaining amount of warrants.
Enforceability of Rights by Holders of Warrants
Each warrant agent will act solely as our agent under the applicable warrant agreement and
will not assume any obligation or relationship of agency or trust with any holder of any warrant. A
single bank or trust company may act as warrant agent for more than one issue of warrants. A
warrant agent will have no duty or responsibility in case of any default by us under the applicable
warrant agreement or warrant, including any duty or responsibility to initiate any proceedings at
law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent
of the related warrant agent or the holder of any other warrant, enforce by appropriate legal
action its right to exercise, and receive the securities purchasable upon exercise of, its
warrants.
Governing Law
Unless we provide otherwise in the applicable prospectus supplement, the warrant agreements
will be governed by and construed in accordance with the laws of the State of Delaware.
DESCRIPTION OF UNITS
We may issue, in one more series, units consisting of common stock, preferred stock, debt
securities and/or warrants for the purchase of common stock, preferred stock and/or debt securities
in any combination. While the terms we have summarized below will apply generally to any units that
we may offer under this prospectus, we will describe the particular terms of any series of units in
more detail in the applicable prospectus supplement. The terms of any units offered under a
prospectus supplement may differ from the terms described below.
We will file as exhibits to the registration statement of which this prospectus is a part, or
will incorporate by reference from reports that we file with the SEC, the form of unit agreement
that describes the terms of the series of units we are offering, and any supplemental agreements,
before the issuance of the related series of units. The following summaries of material terms and
provisions of the units are subject to, and qualified in their entirety by reference to, all the
provisions of the unit agreement and any supplemental agreements applicable to a particular series
of units. We urge you to read the applicable prospectus supplements related to the particular
series of units that we may offer under this prospectus, as well as any related free writing
prospectuses and the complete unit agreement and any supplemental agreements that contain the terms
of the units.
General
Each unit will be issued so that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder
of each included security. The unit agreement under which a unit is issued may provide that the
securities included in the unit may not be held or transferred separately, at any time or at any
time before a specified date.
We will describe in the applicable prospectus supplement the terms of the series of units
being offered,
15
including:
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the designation and terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may be held or transferred
separately; |
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any provisions of the governing unit agreement that differ from those described below;
and |
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any provisions for the issuance, payment, settlement, transfer or exchange of the units
or of the securities comprising the units. |
The provisions described in this section, as well as those described under Description of Our
Capital Stock, Description of Debt Securities and Description of Warrants will apply to each
unit to the extent comprised of any such security included in each unit, as well as the underlying,
relevant securities, respectively.
Issuance in Series
We may issue units in such amounts and in such numerous distinct series as we determine.
Enforceability of Rights by Holders of Units
Each unit agent will act solely as our agent under the applicable unit agreement and will not
assume any obligation or relationship of agency or trust with any holder of any unit. A single bank
or trust company may act as unit agent for more than one series of units. A unit agent will have no
duty or responsibility in case of any default by us under the applicable unit agreement or unit,
including any duty or responsibility to initiate any proceedings at law or otherwise, or to make
any demand upon us. Any holder of a unit may, without the consent of the related unit agent or the
holder of any other unit, enforce by appropriate legal action its rights as holder under any
security included in the unit.
Title
We, and any unit agent and any of their agents, may treat the registered holder of any unit
certificate as an absolute owner of the units evidenced by that certificate for any purpose and as
the person entitled to exercise the rights attaching to the units so requested, despite any notice
to the contrary. See Legal Ownership of Securities below.
LEGAL OWNERSHIP OF SECURITIES
We can issue securities in registered form to holders and indirect holders or
as global
securities. We refer to those persons who have securities registered in their own names on the
books that we or any applicable trustee or depositary maintain for this purpose as the holders of
those securities. These persons are the legal holders of the securities. We refer to those persons
who, indirectly through others, own beneficial interests in securities that are not registered in
their own names, as indirect holders of those securities. As discussed below, indirect holders
are not legal holders, and investors in securities issued in book-entry form or in street name will
be indirect holders.
Book-Entry Holders
We may issue securities in book-entry form only, as we will specify in the applicable
prospectus supplement. This means securities may be represented by one or more global securities
registered in the name of a financial institution that holds them as depositary on behalf of other
financial institutions that participate in the depositarys book-entry system. These participating
institutions, which are referred to as participants, in turn, hold beneficial interests in the
securities on behalf of themselves or their customers.
Only the person in whose name a security is registered is recognized as the holder of that
security. Securities issued in global form will be registered in the name of the depositary or its
participants. Consequently, for
16
securities issued in global form, we will recognize only the depositary as the holder of the
securities, and we will make all payments on the securities to the depositary. The depositary
passes along the payments it receives to its participants, which in turn pass the payments along to
their customers who are the beneficial owners. The depositary and its participants do so under
agreements they have made with one another or with their customers; they are not obligated to do so
under the terms of the securities.
As a result, investors in a book-entry security will not own securities directly. Instead,
they will own beneficial interests in a global security, through a bank, broker or other financial
institution that participates in the depositarys book-entry system or holds an interest through a
participant. As long as the securities are issued in global form, investors will be indirect
holders, and not holders, of the securities.
Street Name Holders
We may terminate a global security or issue securities in non-global form. In these cases,
investors may choose to hold their securities in their own names or in street name. Securities
held by an investor in street name would be registered in the name of a bank, broker or other
financial institution that the investor chooses, and the investor would hold only a beneficial
interest in those securities through an account he or she maintains at that institution.
For securities held in street name, we will recognize only the intermediary banks, brokers and
other financial institutions in whose names the securities are registered as the holders of those
securities, and will make all payments, if any, on those securities to them. These institutions
pass along the payments they receive to their customers who are the beneficial owners, but only
because they agree to do so in their customer agreements or because they are legally required to do
so. Investors who hold securities in street name will be indirect holders, not holders, of those
securities.
Legal Holders
Our obligations, as well as the obligations of any applicable trustee and of any third parties
employed by us or a trustee, run only to the legal holders of the securities. we do not have
obligations to investors who hold beneficial interests in global securities, in street name or by
any other indirect means. This will be the case whether an investor chooses to be an indirect
holder of a security or has no choice because we are issuing the securities only in global form.
For example, once we make a payment, if any, or give a notice to the holder, we have no
further responsibility for the payment or notice even if that holder is required, under agreements
with depositary participants or customers or by law, to pass it along to the indirect holders but
does not do so. Similarly, we may want to obtain the approval of the holders to amend an indenture,
to relieve us of the consequences of a default or of our obligation to comply with a particular
provision of the indenture or for other purposes. In such an event, we would seek approval only
from the holders, and not the indirect holders, of the securities. Whether and how the holders
contact the indirect holders is up to the holders.
Special Considerations For Indirect Holders
If you hold securities through a bank, broker or other financial institution, either in
book-entry form or in street name, you should check with your own institution to find out:
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how it handles securities payments and notices; |
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whether it imposes fees or charges; |
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how it would handle a request for the holders consent, if ever required; |
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whether and how you can instruct it to send you securities registered in your own name
so you can be a holder, if that is permitted in the future; |
17
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how it would exercise rights under the securities if there were a default or other event
triggering the need for holders to act to protect their interests; and |
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if the securities are in book-entry form, how the depositarys rules and procedures will
affect these matters. |
Global Securities
A global security is a security that represents one or any other number of individual
securities held by a depositary. Generally, all securities represented by the same global
securities will have the same terms.
Each security issued in book-entry form will be represented by a global security that we
deposit with and register in the name of a financial institution or its nominee that we select. The
financial institution that we select for this purpose is called the depositary. Unless we specify
otherwise in the applicable prospectus supplement, The Depository Trust Company, New York, New
York, known as DTC, will be the depositary for all securities issued in book-entry form.
A global security may not be transferred to or registered in the name of anyone other than the
depositary, its nominee or a successor depositary, unless special termination situations arise. We
describe those situations below under Special Situations When a Global Security Will Be
Terminated. As a result of these arrangements, the depositary, or its nominee, will be the sole
registered owner and holder of all securities represented by a global security, and investors will
be permitted to own only beneficial interests in a global security. Beneficial interests must be
held by means of an account with a broker, bank or other financial institution that in turn has an
account with the depositary or with another institution that does. Thus, an investor whose security
is represented by a global security will not be a holder of the security, but only an indirect
holder of a beneficial interest in the global security.
If the prospectus supplement for a particular security indicates that the security will be
issued in global form only, then the security will be represented by a global security at all times
unless and until the global security is terminated. If termination occurs, we may issue the
securities through another book-entry clearing system or decide that the securities may no longer
be held through any book-entry clearing system.
Special Considerations For Global Securities
The rights of an indirect holder relating to a global security will be governed by the account
rules of the investors financial institution and of the depositary, as well as general laws
relating to securities transfers. We do not recognize an indirect holder as a holder of securities
but instead deal only with the depositary that holds the global security.
If securities are issued only in the form of a global security, an investor should be aware of
the following:
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an investor cannot cause the securities to be registered in his or her name, and cannot
obtain non-global certificates for his or her interest in the securities, except in the
special situations described below; |
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an investor will be an indirect holder and must look to his or her own bank or broker
for payments on the securities and protection of his or her legal rights relating to the
securities, as described above; |
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an investor may not be able to sell interests in the securities to some insurance
companies and to other institutions that are required by law to own their securities in
non-book-entry form; |
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an investor may not be able to pledge his or her interest in a global security in
circumstances where certificates representing the securities must be delivered to the
lender or other beneficiary of the pledge in order for the pledge to be effective; |
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the depositarys policies, which may change from time to time, will govern payments,
transfers, exchanges and other matters relating to an investors interest in a global
security; |
18
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we and any applicable trustee have no responsibility for any aspect of the depositarys
actions or for its records of ownership interests in a global security, nor do we or any
applicable trustee supervise the depositary in any way; |
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the depositary may, and we understand that DTC will, require that those who purchase and
sell interests in a global security within its book-entry system use immediately available
funds, and your broker or bank may require you to do so as well; and |
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financial institutions that participate in the depositarys book-entry system, and
through which an investor holds its interest in a global security, may also have their own
policies affecting payments, notices and other matters relating to the securities. |
There may be more than one financial intermediary in the chain of ownership for an investor.
We do not monitor and are not responsible for the actions of any of those intermediaries.
Special Situations When a Global Security Will Be Terminated
In a few special situations described below, the global security will terminate and interests
in it will be exchanged for physical certificates representing those interests. After that
exchange, the choice of whether to hold securities directly or in street name will be up to the
investor. Investors must consult their own banks or brokers to find out how to have their interests
in securities transferred to their own name, so that they will be direct holders. We have described
the rights of holders and street name investors above.
Unless we provide otherwise in the applicable prospectus supplement, the global security will
terminate when the following special situations occur:
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if the depositary notifies us that it is unwilling, unable or no longer qualified to
continue as depositary for that global security and we do not appoint another institution
to act as depositary within 90 days; |
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if we notify any applicable trustee that we wish to terminate that global security; or |
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if an event of default has occurred with regard to securities represented by that global
security and has not been cured or waived. |
The prospectus supplement may also list additional situations for terminating a global
security that would apply only to the particular series of securities covered by the applicable
prospectus supplement. When a global security terminates, the depositary, and not us or any
applicable trustee, is responsible for deciding the names of the institutions that will be the
initial direct holders.
PLAN OF DISTRIBUTION
Pursuant to General Instruction I.B.6 of Form S-3, we are permitted to utilize the
registration statement of which this prospectus forms a part to sell a maximum amount of securities
equal to one-third of the aggregate market value of the outstanding voting and non-voting common
equity held by our non-affiliates in any 12 month period. We may, from to time, offer the
securities registered hereby up to this maximum amount. In addition, under current NASDAQ
Marketplace Rules, we may be required to obtain shareholder approval prior to issuing common stock
at a discount from book or market value if the number of shares issuable will exceed 20% of our
outstanding shares or, even in the absence of a discount from market value, if such issuance would
result in a change in control.
We may sell the securities from time to time pursuant to underwritten public offerings,
negotiated transactions, block trades or a combination of these methods. We may sell the securities
to or through underwriters or dealers, with or without an underwriting syndicate, through agents,
or directly to one or more purchasers or a combination of these methods. We may distribute
securities from time to time in one or more transactions:
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at a fixed price or prices, which may be changed; |
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at market prices prevailing at the time of sale; |
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at prices related to such prevailing market prices; or |
19
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at negotiated prices or in competitively bid transactions. |
A prospectus supplement or supplements will describe the terms of the offering of the securities,
including:
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the name or names of the underwriters, dealers or agents, if any, and the types and
amounts of securities underwritten or purchased by each of them; |
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the purchase price of the securities and the proceeds we will receive from the sale; |
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any over-allotment options under which underwriters may purchase additional securities
from us; |
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any agency fees or underwriting discounts and other items constituting agents or
underwriters compensation; |
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any public offering price; |
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any discounts or concessions allowed or reallowed or paid to dealers; and |
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any securities exchange or market on which the securities may be listed. |
Only underwriters named in the prospectus supplement will be underwriters of the securities
offered by the prospectus supplement.
If underwriters are used in the sale, they will acquire the securities for their own account
and may resell the securities from time to time in one or more transactions at a fixed public
offering price or at varying prices determined at the time of sale. The obligations of the
underwriters to purchase the securities will be subject to the conditions set forth in the
applicable underwriting agreement. We may offer the securities to the public through underwriting
syndicates represented by managing underwriters or by underwriters without a syndicate. Subject to
certain conditions, the underwriters will be obligated to purchase all of the securities offered by
the prospectus supplement, other than securities covered by any over-allotment option. Any public
offering price and any discounts or concessions allowed or reallowed or paid to dealers may change
from time to time. We may use underwriters with whom we have a material relationship. We will
describe in the prospectus supplement, naming the underwriter, the nature of any such relationship.
If we use dealers in the sale of securities, we will sell securities to such dealers as
principals. The dealers may then resell the securities to the public at varying prices to be
determined by such dealers at the time of resale. We may solicit offers to purchase the securities
directly, and we may sell the securities directly to institutional or other investors, who may be
deemed underwriters within the meaning of the Securities Act with respect to any resales of those
securities. The terms of these sales will be described in the applicable prospectus supplement. If
we use agents in the sale of securities, unless otherwise indicated in the prospectus supplement,
they will use their reasonable best efforts to solicit purchases for the period of their
appointment. Unless otherwise indicated in a prospectus supplement, if we sell directly, no
underwriters, dealers or agents would be involved. We will not make an offer of securities in any
jurisdiction that does not permit such an offer.
We may sell securities directly or through agents we designate from time to time. We will name
any agent involved in the offering and sale of securities and will describe any commissions we will
pay the agent in the prospectus supplement. Unless the prospectus supplement states otherwise, our
agent will act on a best-efforts basis for the period of its appointment.
We may authorize underwriters, dealers, or agents to solicit offers by certain types of
institutional investors or other purchasers to purchase our securities from them at the public
offering price set forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. The contracts will be subject
to those conditions set forth in the prospectus supplement, and the prospectus supplement will set
forth any commissions or discounts we pay for solicitation of these contracts.
We may provide agents and underwriters with indemnification against civil liabilities,
including liabilities
20
under the Securities Act, or contribution with respect to payments that the agents or
underwriters may make with respect to these liabilities. Agents and underwriters may engage in
transactions with, or perform services for, us in the ordinary course of business.
Unless otherwise specified in an applicable prospectus supplement, each class or series of
securities will be a new issue with no established trading market, other than our common stock,
which is listed on the NASDAQ Capital Market under the symbol PFSW. Any common stock sold
pursuant to a prospectus supplement will be listed on the NASDAQ Capital Market, subject to
official notice of issuance. We may elect to list any other class or series of securities on any
exchange, but we are not obligated to do so. It is possible that one or more underwriters may make
a market in a class or series of securities, but the underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. We cannot give any assurance as
to the liquidity of the trading market for any of the securities. We cannot guarantee the liquidity
of the trading markets for any securities.
In connection with any offering, the underwriters may purchase and sell securities in the open
market. Any underwriter may engage in short sales, over-allotment, stabilizing transactions,
short-covering transactions and penalty bids in accordance with Regulation M under the Exchange
Act. Short sales involve the sale by the underwriters of a greater number of securities than they
are required to purchase in an offering. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified maximum price and are
made for the purpose of preventing or retarding a decline in the market price of the securities
while an offering is in progress. Syndicate-covering or other short-covering transactions involve
purchases of the securities, either through exercise of the over-allotment option or in the open
market after the distribution is completed, to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the securities originally sold by
the dealer are purchased in a stabilizing or covering transaction to cover short positions. These
activities by the underwriters may stabilize, maintain or otherwise affect the market price of the
securities. As a result, the price of the securities may be higher than the price that otherwise
might exist in the open market. If these activities are commenced, they may be discontinued by the
underwriters at any time. These transactions may be effected on an exchange or automated quotation
system, if the securities are listed on an exchange or admitted for trading on an automated
quotation system, in the over-the-counter market, or otherwise.
Any underwriters that are qualified market makers on the NASDAQ Capital Market may engage in
passive market making transactions in our common stock on the NASDAQ Capital Market in accordance
with Regulation M under the Exchange Act, during the business day prior to the pricing of the
offering, before the commencement of offers or sales of the common stock. Passive market makers
must comply with applicable volume and price limitations and must be identified as passive market
makers. In general, a passive market maker must display its bid at a price not in excess of the
highest independent bid for such security; if all independent bids are lowered below the passive
market makers bid, however, the passive market makers bid must then be lowered when certain
purchase limits are exceeded. Passive market making may stabilize the market price of the
securities at a level above that which might otherwise prevail in the open market and, if
commenced, may be discontinued at any time.
In compliance with guidelines of the Financial Industry Regulatory Authority, or FINRA, the
maximum consideration or discount to be received by any FINRA member or independent broker dealer
may not exceed 8% of the aggregate amount of the securities offered pursuant to this prospectus and
any applicable prospectus supplement.
We may enter into derivative transactions with third parties, or sell securities not covered
by this prospectus to third parties in privately negotiated transactions. If the applicable
prospectus supplement indicates in connection with those derivatives then the third parties may
sell securities covered by this prospectus and the applicable prospectus supplement, including in
short sale transactions. If so, the third party may use securities pledged by us or borrowed from
us or others to settle those sales or to close out any related open borrowings of stock, and may
use securities received from us in settlement of those derivatives to close out any related open
borrowings of securities. The third party in such sale transactions will be an underwriter and will
be identified in the applicable prospectus supplement (or a post-effective amendment).
LEGAL MATTERS
Wolff & Samson PC will pass upon the validity of the securities being offered hereby.
21
EXPERTS
The consolidated financial statements and schedules of PFSweb, Inc. and subsidiaries appearing in
PFSwebs Annual Report on Form 10-K for the year ended December 31, 2008 incorporated by reference
in this prospectus and elsewhere in the registration statement have been so incorporated by reference in
reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the
authority of said firm as experts in accounting and auditing in giving said reports.
The
consolidated financial statements of PFSweb, Inc. and subsidiaries as
of December 31, 2007, and for each of the years in the two-year period
ended December 31, 2007, have been incorporated by reference herein
in reliance upon the report of KPMG LLP, independent registered
public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
22
PROSPECTUS
$30,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
, 2010
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following are the estimated expenses of the issuance and distribution of the securities
being registered, all of which are payable by us. All of the items below, except for the
registration fee, are estimates.
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Securities and Exchange Commission registration fee |
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$ |
2,139 |
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Transfer agent and registrar fees |
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* |
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Printing expenses |
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* |
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Accountings fees and expenses |
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* |
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Legal fees and expenses |
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* |
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Miscellaneous |
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* |
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Total |
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$ |
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* |
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* Estimated expenses are presently not known and cannot be estimated.
Item 15. Indemnification of Directors and Officers.
Delaware law provides that directors of a company will not be personally liable for monetary
damages for breach of their fiduciary duty as directors, except for liabilities:
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for any breach of their duty of loyalty to the company or its stockholders; |
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for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; |
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for unlawful payment of dividend or unlawful stock repurchase or redemption, as provided
under Section 174 of the General Corporation Law of the State of Delaware (the DGCL); or |
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for any transaction from which the director derived an improper personal benefit. |
The provisions of Delaware law that relate to indemnification expressly state that the rights
provided by the statute are not exclusive and are in addition to any rights provided in bylaws, by
agreement, or otherwise. Our certificate of incorporation also provides that if Delaware law is
amended to further eliminate or limit the liability of directors, then the liability of our
directors shall be eliminated or limited, without further stockholder action, to the fullest extent
permissible under Delaware law as so amended.
Our certificate of incorporation requires us to indemnify, to the fullest extent permitted by
the DGCL, any and all persons we have the power to indemnify under the DGCL from and against any
and all expenses, liabilities or other matters covered by the DGCL. Additionally, our certificate
of incorporation requires us to indemnify each of our directors and officers in each and every
situation where the DGCL permits or empowers us (but does not obligate us) to provide such
indemnification, subject to the provisions of our bylaws. Our bylaws requires us to indemnify our
directors to the fullest extent permitted by the DGCL, and permits us, to the extent authorized by
the board of directors, to indemnify our officers and any other person we have the power to
indemnify against liability, reasonable expense or other matters.
Under our certificate of incorporation, indemnification may be provided to directors and
officers acting in their official capacity, as well as in other capacities. Indemnification will
continue for persons who have ceased to be directors, officers, employees or agents, and will inure
to the benefit of their heirs, executors and administrators. Additionally, under our certificate of
incorporation, except under certain circumstances, our directors are not personally liable to us or
our stockholders for monetary damages for breach of fiduciary duty as a director. At present, there
is no pending litigation or proceeding involving any of our directors, officers, or employees in
which indemnification is sought, nor are we aware of any threatened litigation that may result in
claims for indemnification.
II-1
Our bylaws also permit us to secure insurance on behalf of any officer, director, employee, or
agent for any liability arising out of actions in his or her capacity as an officer, director,
employee, or agent. We have obtained an insurance policy that insures our directors and officers
against losses, above a deductible amount, from specified types of claims.
Item 16. Exhibits.
The following documents are exhibits to the registration statement:
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
1.1*
|
|
Form of Underwriting Agreement. |
|
|
|
1.2*
|
|
Form of Agency Agreement. |
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of PFSweb, Inc. (Incorporated by reference
from PFSweb, Inc. Registration Statement on Form S-1 (Commission File No. 333-87657), Annual
Report on Form 10-K for the Fiscal Year ended December 31, 2005 filed on March 31, 2006 and
Quarterly Report on Form 10-Q for the Fiscal Quarter ended June 30, 2009 filed on August 14,
2009). |
|
|
|
3.2
|
|
Bylaws of PFSweb, Inc. (Incorporated by reference from PFSweb, Inc. Registration Statement on
Form S-1 (Commission File No. 333-87657), Annual Report on Form 10-K for the Fiscal Year ended
December 31, 2005 filed on March 31, 2006 and Current Report on Form 8-K filed on November 13,
2007 ). |
|
|
|
4.1
|
|
Form of Common Stock certificate of PFSweb, Inc. (Incorporated by reference to Exhibit 4.1 to
Form S-1/A filed by the Company on November 23, 1999). |
|
|
|
4.2
|
|
Rights Agreement, dated as of June 8, 2000, between the Company and ChaseMellon Shareholder
Services, LLC, which includes the Certificate of Designation in respect of the Series A
Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of
Rights to Purchase Series A Preferred Stock as Exhibit C (Incorporated by reference to Exhibit
4 to Form 8-K filed on June 8, 2000), as amended by Amendment No. 1 to Rights Agreement, dated
as of May 30, 2008 between the Company and Mellon Investor Services LLC, as successor to
ChaseMellon Shareholder Services, L.L.C., as rights agent. (Incorporated by reference to
Exhibit 4.1 to Form 8-K filed by the Company on May 30, 2008) |
|
|
|
4.3*
|
|
Form of Warrant Agreement and Warrant Certificate. |
|
|
|
4.4*
|
|
Form of Unit Agreement and Unit Certificate. |
|
|
|
4.5
|
|
Form of Senior Debt Indenture |
|
|
|
4.6*
|
|
Form of Senior Note |
|
|
|
4.7
|
|
Form of Subordinated Debt Indenture |
|
|
|
4.8*
|
|
Form of Subordinated Note |
|
|
|
5.1
|
|
Opinion of Wolff & Samson PC. |
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm Grant Thornton LLP. |
|
|
|
23.2
|
|
Consent of Independent Registered Public Accounting Firm KPMG LLP. |
II-2
|
|
|
23.3
|
|
Consent of Wolff & Samson PC
(included in Exhibit 5.1 to this Registration Statement). |
|
|
|
24.1
|
|
Power of Attorney (included on the signature page). |
* |
|
To be filed either by amendment or as an exhibit to a report filed under the Securities
Exchange Act of 1934, and incorporated herein by reference. |
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
|
(i) |
|
To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933; |
|
|
(ii) |
|
To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the Calculation of Registration
Fee table in the effective registration statement; and |
|
|
(iii) |
|
To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; |
provided, however, that the undertakings set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) do
not apply if the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of this registration statement.
2. That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
4. That, for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
|
(i) |
|
Each prospectus filed by the registrant pursuant to Rule
424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration
statement; and |
|
|
(ii) |
|
Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on
Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or
(x) for the purpose of providing the information required by |
II-3
|
|
|
section 10(a) of the Securities Act of 1933 shall be deemed to be a part of
and included in the registration statement as of the earlier date such form
of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed to be
a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof. Provided, however , that no statement
made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that
is a part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such effective date. |
5. That, for the purpose of determining liability of the registrant under the Securities Act
of 1933 to any purchaser in the initial distribution of the securities the undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the purchaser and will be considered
to offer or sell such securities to such purchaser:
|
(i) |
|
Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424; |
|
|
(ii) |
|
Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant; |
|
|
(iii) |
|
The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
|
|
(iv) |
|
Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser. |
The undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrants annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plans annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has
reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Plano, State of Texas, on February 18, 2010.
|
|
|
|
|
|
PFSWEB, INC.
|
|
|
By: |
/s/ Thomas J. Madden
|
|
|
|
Thomas J. Madden, Vice President- |
|
|
|
Finance |
|
|
Each person whose signature to this Registration Statement appears below hereby appoints
Thomas J. Madden as his attorney-in-fact to sign on his behalf individually and in the capacity
stated below and to file all amendments and post-effective amendments to this Registration
Statement, and any and all instruments or documents filed as a part of or in connection with this
Registration Statement or the amendments thereto, and the attorney-in-fact, or either of them, may
make such changes and additions to this Registration Statement as the attorney-in-fact, or either
of them, may deem necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
By:
|
|
/s/ Mark C. Layton
Mark C. Layton
|
|
Chairman of the Board,
President, and
Chief
Executive Officer
(Principal
Executive
Officer)
|
|
February 18, 2010 |
|
|
|
|
|
|
|
By:
|
|
/s/ Thomas J. Madden
Thomas J. Madden
|
|
Executive Vice
President, Chief
Financial Officer and
Chief
Accounting
Officer (Principal
Financial Officer and
Principal
Accounting
Officer)
|
|
February 18, 2010 |
|
|
|
|
|
|
|
By:
|
|
/s/ David Beatson
David Beatson
|
|
Director
|
|
February 18, 2010 |
|
|
|
|
|
|
|
By:
|
|
/s/ Timothy M. Murray
Timothy M. Murray
|
|
Director
|
|
February 18, 2010 |
|
|
|
|
|
|
|
By:
|
|
/s/ James Reilly
James Reilly
|
|
Director
|
|
February 18, 2010 |
|
|
|
|
|
|
|
By:
|
|
/s/ Neil Jacobs
Neil Jacobs
|
|
Director
|
|
February 18, 2010 |
II-5
INDEX TO EXHIBITS
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
1.1*
|
|
Form of Underwriting Agreement. |
|
|
|
1.2*
|
|
Form of Agency Agreement. |
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of PFSweb, Inc. (Incorporated by reference
from PFSweb, Inc. Registration Statement on Form S-1 (Commission File No. 333-87657), Annual
Report on Form 10-K for the Fiscal Year ended December 31, 2005 filed on March 31, 2006 and
Quarterly Report on Form 10-Q for the Fiscal Quarter ended June 30, 2009 filed on August 14,
2009). |
|
|
|
3.2
|
|
Bylaws of PFSweb, Inc. (Incorporated by reference from PFSweb, Inc. Registration Statement on
Form S-1 (Commission File No. 333-87657), Annual Report on Form 10-K for the Fiscal Year ended
December 31, 2005 filed on March 31, 2006 and Current Report on Form 8-K filed on November 13,
2007 ) |
|
|
|
4.1
|
|
Form of Common Stock certificate of PFSweb, Inc. (Incorporated by reference to Exhibit 4.1 to
Form S-1/A filed by the Company on November 23, 1999). |
|
|
|
4.2
|
|
Rights Agreement, dated as of June 8, 2000, between the Company and ChaseMellon Shareholder
Services, LLC, which includes the Certificate of Designation in respect of the Series A
Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of
Rights to Purchase Series A Preferred Stock as Exhibit C (Incorporated by reference to Exhibit
4 to Form 8-K filed on June 8, 2000), as amended by Amendment No. 1 to Rights Agreement, dated
as of May 30, 2008 between the Company and Mellon Investor Services LLC, as successor to
ChaseMellon Shareholder Services, L.L.C., as rights agent. (Incorporated by reference to
Exhibit 4.1 to Form 8-K filed by the Company on May 30, 2008) |
|
|
|
4.3*
|
|
Form of Warrant Agreement and Warrant Certificate. |
|
|
|
4.4*
|
|
Form of Unit Agreement and Unit Certificate. |
|
|
|
4.5
|
|
Form of Senior Debt Indenture |
|
|
|
4.6*
|
|
Form of Senior Note |
|
|
|
4.7
|
|
Form of Subordinated Debt Indenture |
|
|
|
4.8*
|
|
Form of Subordinated Note |
|
|
|
5.1
|
|
Opinion of Wolff & Samson PC. |
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm Grant Thornton LLP. |
|
|
|
23.2
|
|
Consent of Independent Registered Public Accounting Firm KPMG LLP. |
|
|
|
23.3*
|
|
Consent of Wolff & Samson PC (included in Exhibit 5.1 to this Registration Statement). |
|
|
|
24.1
|
|
Power of Attorney (included on the signature page) |
* |
|
To be filed either by amendment or as an Exhibit to a report filed under the Securities
Exchange Act of 1934, and incorporated herein by reference. |
exv4w5
Exhibit 4.5
PFSWEB, INC.
SENIOR DEBT SECURITIES
INDENTURE
Dated as of
Trustee
TABLE OF CONTENTS
|
|
|
|
|
Article 1 DEFINITIONS |
|
1 |
Section 1.1 |
|
Definitions of Terms |
|
1 |
|
|
|
|
|
Article 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES |
|
5 |
Section 2.1 |
|
Designation and Terms of Securities |
|
5 |
Section 2.2 |
|
Form of Securities and Trustees Certificate |
|
7 |
Section 2.3 |
|
Denominations ; Provisions for Payment |
|
7 |
Section 2.4 |
|
Execution and Authentications |
|
9 |
Section 2.5 |
|
Registration of Transfer and Exchange |
|
9 |
Section 2.6 |
|
Temporary Securities |
|
10 |
Section 2.7 |
|
Mutilated, Destroyed, Lost or Stolen Securities |
|
11 |
Section 2.8 |
|
Cancellation |
|
12 |
Section 2.9 |
|
Benefits of Indenture |
|
12 |
Section 2.10 |
|
Authenticating Agent |
|
12 |
Section 2.11 |
|
Global Securities |
|
13 |
|
|
|
|
|
Article 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS |
|
14 |
Section 3.1 |
|
Redemption |
|
14 |
Section 3.2 |
|
Notice of Redemption |
|
14 |
Section 3.3 |
|
Payment Upon Redemption |
|
15 |
Section 3.4 |
|
Sinking Fund |
|
15 |
Section 3.5 |
|
Satisfaction of Sinking Fund Payments with Securities |
|
16 |
Section 3.6 |
|
Redemption of Securities for Sinking Fund |
|
16 |
|
|
|
|
|
Article 4 COVENANTS |
|
16 |
Section 4.1 |
|
Payment of Principal, Premium and Interest |
|
16 |
Section 4.2 |
|
Maintenance of Office or Agency |
|
17 |
Section 4.3 |
|
Paying Agents |
|
17 |
Section 4.4 |
|
Appointment to Fill Vacancy in Office of Trustee |
|
18 |
Section 4.5 |
|
Compliance with Consolidation Provisions |
|
18 |
|
|
|
|
|
Article 5 SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
|
19 |
Section 5.1 |
|
Company to Furnish Trustee Names and Addresses of Securityholders |
|
19 |
Section 5.2 |
|
Preservation of Information; Communications With Securityholders |
|
19 |
Section 5.3 |
|
Reports by the Company |
|
19 |
Section 5.4 |
|
Reports by the Trustee |
|
19 |
|
|
|
|
|
Article 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
|
20 |
Section 6.1 |
|
Events of Default |
|
20 |
i
|
|
|
|
|
Section 6.2 |
|
Collection of Indebtedness and Suits for Enforcement by Trustee |
|
22 |
Section 6.3 |
|
Application of Moneys Collected |
|
23 |
Section 6.4 |
|
Limitation on Suits |
|
23 |
Section 6.5 |
|
Rights and Remedies Cumulative; Delay or Omission Not Waiver |
|
24 |
Section 6.6 |
|
Control by Securityholders |
|
25 |
Section 6.7 |
|
Undertaking to Pay Costs |
|
25 |
|
|
|
|
|
Article 7 CONCERNING THE TRUSTEE |
|
25 |
Section 7.1 |
|
Certain Duties and Responsibilities of Trustee |
|
25 |
Section 7.2 |
|
Certain Rights of Trustee |
|
27 |
Section 7.3 |
|
Trustee Not Responsible for Recitals or Issuance or Securities |
|
28 |
Section 7.4 |
|
May Hold Securities |
|
28 |
Section 7.5 |
|
Moneys Held in Trust |
|
28 |
Section 7.6 |
|
Compensation and Reimbursement |
|
29 |
Section 7.7 |
|
Reliance on Officers Certificate |
|
29 |
Section 7.8 |
|
Disqualification; Conflicting Interests |
|
29 |
Section 7.9 |
|
Corporate Trustee Required; Eligibility |
|
29 |
Section 7.10 |
|
Resignation and Removal; Appointment of Successor |
|
30 |
Section 7.11 |
|
Acceptance of Appointment by Successor |
|
31 |
Section 7.12 |
|
Merger, Conversion, Consolidation or Succession to Business |
|
32 |
Section 7.13 |
|
Preferential Collection of Claims Against the Company |
|
33 |
Section 7.14 |
|
Notice of Default |
|
33 |
|
|
|
|
|
Article 8 CONCERNING THE SECURITYHOLDERS |
|
33 |
Section 8.1 |
|
Evidence of Action by Securityholders |
|
33 |
Section 8.2 |
|
Proof of Execution by Securityholders |
|
34 |
Section 8.3 |
|
Who May be Deemed Owners |
|
34 |
Section 8.4 |
|
Certain Securities Owned by Company Disregarded |
|
34 |
Section 8.5 |
|
Actions Binding on Future Securityholders |
|
35 |
|
|
|
|
|
Article 9 SUPPLEMENTAL INDENTURES |
|
35 |
Section 9.1 |
|
Supplemental Indentures Without the Consent of Securityholders |
|
35 |
Section 9.2 |
|
Supplemental Indentures With Consent of Securityholders |
|
36 |
Section 9.3 |
|
Effect of Supplemental Indentures |
|
37 |
Section 9.4 |
|
Securities Affected by Supplemental Indentures |
|
37 |
Section 9.5 |
|
Execution of Supplemental Indentures |
|
37 |
|
|
|
|
|
Article 10 SUCCESSOR ENTITY |
|
38 |
Section 10.1 |
|
Company May Consolidate, Etc |
|
38 |
Section 10.2 |
|
Successor Entity Substituted |
|
38 |
Section 10.3 |
|
Evidence of Consolidation, Etc. to Trustee |
|
39 |
|
|
|
|
|
Article 11 SATISFACTION AND DISCHARGE |
|
39 |
Section 11.1 |
|
Satisfaction and Discharge of Indenture |
|
39 |
Section 11.2 |
|
Discharge of Obligations |
|
39 |
Section 11.3 |
|
Deposited Moneys to be Held in Trust |
|
40 |
Section 11.4 |
|
Payment of Moneys Held by Paying Agents |
|
40 |
ii
|
|
|
|
|
Section 11.5 |
|
Repayment to Company |
|
40 |
|
|
|
|
|
Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
|
41 |
Section 12.1 |
|
No Recourse |
|
41 |
|
|
|
|
|
Article 13 MISCELLANEOUS PROVISIONS |
|
41 |
Section 13.1 |
|
Effect on Successors and Assigns |
|
41 |
Section 13.2 |
|
Actions by Successors |
|
41 |
Section 13.3 |
|
Surrender of Company Powers |
|
41 |
Section 13.4 |
|
Notices |
|
42 |
Section 13.5 |
|
Governing Law |
|
42 |
Section 13.6 |
|
Treatment of Securities as Debt |
|
42 |
Section 13.7 |
|
Certificates and Opinions as to Conditions Precedent |
|
42 |
Section 13.8 |
|
Payments on Business Days |
|
42 |
Section 13.9 |
|
Conflict with Trust Indenture Act |
|
43 |
Section 13.10 |
|
Counterparts |
|
43 |
Section 13.11 |
|
Separability |
|
43 |
Section 13.12 |
|
Compliance Certificates |
|
43 |
iii
INDENTURE
INDENTURE, dated as of _______, 20___, between PFSWEB, INC., a Delaware corporation (the
Company), and ___________, as trustee (the Trustee):
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of debt securities (hereinafter referred to
as the Securities), in an unlimited aggregate principal amount to be issued from time to time in
one or more series as in this Indenture provided, as registered Securities without coupons, to be
authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the execution of this
Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the
holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit
of the holders of Securities:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions of Terms.
(a) The terms defined in this Section (except as in this Indenture or any indenture
supplemental hereto otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Section and shall include the plural as well as the singular. All other
terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or
that are by reference in such Act or as defined in the Securities Act of 1933, as amended (except
as herein or any indenture supplemental hereto otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of the execution of this instrument.
Authenticating Agent means an authenticating agent with respect to all or any of the series
of Securities appointed by the Trustee pursuant to Section 2.10.
Bankruptcy Law means Title 11, U.S. Code, or any similar federal or state law for the relief
of debtors.
Board of Directors means the Board of Directors of the Company or any duly authorized
committee of such Board.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
Business Day means, with respect to any series of Securities, any day other than a day on
which federal or state banking institutions in the Borough of Manhattan, the City of New York, or
in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law,
executive order or regulation to close.
Certificate means a certificate signed by any Officer. The Certificate need not comply with
the provisions of Section 13.07.
Company means PFSweb, Inc., a corporation duly organized and existing under the laws of the
State of Delaware, and, subject to the provisions of Article Ten, shall also include its successors
and assigns.
Corporate Trust Office means the office of the Trustee at which, at any particular time, its
corporate trust business shall be principally administered, which office at the date hereof is
located at _______________________.
Custodian means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Default means any event, act or condition that with notice or lapse of time, or both, would
constitute an Event of Default.
Depositary means, with respect to Securities of any series for which the Company shall
determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under
the Securities and Exchange Act of 1934, as amended (the Exchange Act), or other applicable
statute or regulation, which, in each case, shall be designated by the Company pursuant to either
Section 2.01 or 2.11.
Event of Default means, with respect to Securities of a particular series, any event
specified in Section 6.01, continued for the period of time, if any, therein designated.
Global Security means, with respect to any series of Securities, a Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the Depositarys instruction,
all in accordance with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
Governmental Obligations means securities that are (a) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not callable or redeemable at
the option of the issuer thereof at any time prior to the stated maturity of the Securities, and
shall also include a depositary receipt issued by a bank or trust company as custodian with respect
to
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any such Governmental Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
Herein, hereof and hereunder, and other words of similar import, refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision.
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 in accordance
with the terms hereof.
Interest Payment Date, when used with respect to any installment of interest on a Security
of a particular series, means the date specified in such Security or in a Board Resolution or in an
indenture supplemental hereto with respect to such series as the fixed date on which an installment
of interest with respect to Securities of that series is due and payable.
Officer means, with respect to the Company, the chairman of the Board of Directors, a chief
executive officer, a president, a chief financial officer, a chief operating officer, any executive
vice president, any senior vice president, any vice president, the treasurer or any assistant
treasurer, the controller or any assistant controller or the secretary or any assistant secretary.
Officers Certificate means a certificate signed by any two Officers. Each such certificate
shall include the statements provided for in Section 13.07, if and to the extent required by the
provisions thereof.
Opinion of Counsel means an opinion in writing subject to customary exceptions of legal
counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in
accordance with the terms hereof. Each such opinion shall include the statements provided for in
Section 13.07, if and to the extent required by the provisions thereof.
Outstanding, when used with reference to Securities of any series, means, subject to the
provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Securities or portions of such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee shall have been
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made for giving such notice; and (c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.
Person means any individual, corporation, partnership, joint venture, joint-stock company,
limited liability company, association, trust, unincorporated organization, any other entity or
organization, including a government or political subdivision or an agency or instrumentality
thereof.
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 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or
stolen Security.
Responsible Officer when used with respect to the Trustee means the chairman of its board of
directors, the chief executive officer, the president, any vice president, the secretary, the
treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
Securities means the debt Securities authenticated and delivered under this Indenture.
Securityholder, holder of Securities, registered holder, or other similar term, means
the Person or Persons in whose name or names a particular Security shall be registered on the books
of the Company kept for that purpose in accordance with the terms of this Indenture.
Security Register and Security Registrar shall have the meanings as set forth in Section
2.05.
Subsidiary means, with respect to any Person, (i) any corporation at least a majority of
whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a majority of whose outstanding
partnership or similar interests shall at the time be owned by such Person, or by one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.
Trustee means, and, subject to the provisions of Article Seven, shall also include its
successors and assigns, and, if at any time there is more than one Person acting in such capacity
hereunder, Trustee shall mean each such Person. The term Trustee as used with respect to a
particular series of the Securities shall mean the trustee with respect to that series.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended.
Voting Stock, as applied to stock of any Person, means shares, interests, participations or
other equivalents in the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of such Person,
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other than shares, interests, participations or other equivalents having such power only by
reason of the occurrence of a contingency.
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE
OF SECURITIES
Section 2.1 Designation and Terms of Securities.
(a) The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate
principal amount of Securities of that series from time to time authorized by or pursuant to a
Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial
issuance of Securities of any series, there shall be established in or pursuant to a Board
Resolution, and set forth in an Officers Certificate, or established in one or more indentures
supplemental hereto:
(1) the title of the Securities of the series (which shall distinguish the Securities of that
series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of that series that 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 that
series);
(3) the date or dates on which the principal of the Securities of the series is payable, any
original issue discount that may apply to the Securities of that series upon their issuance, the
principal amount due at maturity, and the place(s) of payment;
(4) the rate or rates at which the Securities of the series shall bear interest or the manner
of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the Interest Payment Dates on
which such interest will be payable or the manner of determination of such Interest Payment Dates,
the place(s) of payment, and the record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates or the manner of determination of such record dates;
(6) the right, if any, to extend the interest payment periods and the duration of such
extension;
(7) the period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities of the series
pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments
made in cash in satisfaction of future sinking fund obligations)
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or at the option of a holder thereof and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) the form of the Securities of the series including the form of the Certificate of
Authentication for such series;
(10) if other than denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof, the denominations in which the Securities of the series shall be issuable;
(11) any and all other terms (including terms, to the extent applicable, relating to any
auction or remarketing of the Securities of that series and any security for the obligations of the
Company with respect to such Securities) with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including
any terms which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of that series;
(12) whether the Securities are issuable as a Global Security and, in such case, the terms and
the identity of the Depositary for such series;
(13) whether the Securities will be convertible into or exchangeable for shares of common
stock or other securities of the Company or any other Person and, if so, the terms and conditions
upon which such Securities will be so convertible or exchangeable, including the conversion or
exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or
optional (at the Companys option or the holders option) conversion or exchange features, and the
applicable conversion or exchange period;
(14) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01;
(15) any additional or different Events of Default or restrictive covenants (which may
include, among other restrictions, restrictions on the Companys ability or the ability of the
Companys Subsidiaries to: incur additional indebtedness; issue additional securities; create
liens; pay dividends or make distributions in respect of their capital stock; redeem capital stock;
place restrictions on such Subsidiaries placing restrictions on their ability to pay dividends,
make distributions or transfer assets; make investments or other restricted payments; sell or
otherwise dispose of assets; enter into sale-leaseback transactions; engage in transactions with
stockholders and affiliates; issue or sell stock of their Subsidiaries; or effect a consolidation
or merger) or financial covenants (which may include, among other financial covenants, financial
covenants that require the Company and its Subsidiaries to maintain specified interest coverage,
fixed charge, cash flow-based or asset-based ratios) provided for with respect to the Securities of
the series;
(16) if other than dollars, the coin or currency in which the Securities of the series are
denominated (including, but not limited to, foreign currency);
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(17) the terms and conditions, if any, upon which the Company shall pay amounts in addition to
the stated interest, premium, if any and principal amounts of the Securities of the series to any
Securityholder that is not a United States person for federal tax purposes; and
(18) any restrictions on transfer, sale or assignment of the Securities of the series.
All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board
Resolution of the Company, a copy of an appropriate record of such action shall be certified by the
secretary or an assistant secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers Certificate of the Company setting forth the terms of the series.
Securities of any particular series may be issued at various times, with different dates on
which the principal or any installment of principal is payable, with different rates of interest,
if any, or different methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.
Section 2.2 Form of Securities and Trustees Certificate.
The Securities of any series and the Trustees certificate of authentication to be borne by
such Securities shall be substantially of the tenor and purport as set forth in one or more
indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officers
Certificate, and they may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or
as may be required to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which Securities of that series may be
listed, or to conform to usage.
Section 2.3 Denominations ; Provisions for Payment.
The Securities shall be issuable as registered Securities and in the denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10).
The Securities of a particular series shall bear interest payable on the dates and at the rate
specified with respect to that series. Subject to Section 2.01(a)(16), the principal of and the
interest on the Securities of any series, as well as any premium thereon in case of redemption
thereof prior to maturity, shall be payable in the coin or currency of the United States of America
that at the time is legal tender for public and private debt, at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, the City and State of New York.
Each Security shall be dated the date of its authentication. Interest on the Securities shall be
computed on the basis of a 360-day year composed of twelve 30-day months.
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The interest installment on any Security that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date for Securities of that series shall be paid to the
Person in whose name said Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest installment. In the event that any
Security of a particular series or portion thereof is called for redemption and the redemption date
is subsequent to a regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Security will be paid upon presentation and surrender of
such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date for Securities of the same series (herein called Defaulted Interest)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by
virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its
election, as provided in clause (1) or clause (2) below:
(a) The Company may make payment of any Defaulted Interest on Securities to the Persons in
whose names such Securities (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 such Security and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not be more than 15 nor 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 Securityholder at his or her address as it appears in
the Security Register (as hereinafter defined), 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 mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Securities (or their respective Predecessor Securities) are registered on such
special record date.
(b) The Company may make payment of any Defaulted Interest on any Securities 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.
Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto
establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term
regular record date as used in this Section with respect to a series of Securities and any
Interest Payment Date for such series shall mean either the fifteenth day of the month immediately
8
preceding the month in which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the
first day of the month in which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month,
whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security of a series delivered under
this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.
Section 2.4 Execution and Authentications.
The Securities shall be signed on behalf of the Company by one of its Officers. Signatures may
be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall have been an Officer,
notwithstanding the fact that at the time the Securities shall be authenticated and delivered or
disposed of such Person shall have ceased to be such an officer of the Company. The Securities may
contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each
Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized signatory of the
Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder and that the holder
is entitled to the benefits of this Indenture. 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 written order of the Company for
the authentication and delivery of such Securities, signed by an Officer, and the Trustee in
accordance with such written order shall authenticate and deliver such Securities.
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 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustees own rights, duties or immunities
under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable
to the Trustee.
Section 2.5 Registration of Transfer and Exchange.
(a) Securities of any series may be exchanged upon presentation thereof at the office or
agency of the Company designated for such purpose in the Borough of Manhattan, the City and State
of New York, for other Securities of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any
9
Securities so surrendered for exchange, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in exchange therefor the Security or
Securities of the same series that the Securityholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or agency designated for such
purpose in the Borough of Manhattan, the City and State of New York, or such other location
designated by the Company, a register or registers (herein referred to as the Security Register)
in which, subject to such reasonable regulations as it may prescribe, the Company shall register
the Securities and the transfers of Securities as in this Article provided and which at all
reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of
registering Securities and transfer of Securities as herein provided shall be appointed as
authorized by Board Resolution (the Security Registrar).
Upon surrender for transfer of any Security at the office or agency of the Company designated
for such purpose, the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new Security or Securities of
the same series as the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration of transfer, as provided
in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by
a written instrument or instruments of transfer, in form satisfactory to the Company or the
Security Registrar, duly executed by the registered holder or by such holders duly authorized
attorney in writing.
(c) Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth
in an Officers Certificate, or established in one or more indentures supplemental to this
Indenture, no service charge shall be made for any exchange or registration of transfer of
Securities, or issue of new Securities in case of partial redemption of any series, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not
involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or register the transfer of any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding Securities of the same series
and ending at the close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for redemption, other than
the unredeemed portion of any such Securities being redeemed in part. The provisions of this
Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.
Section 2.6 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but with such omissions,
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insertions and variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Every temporary Security of any series shall be executed by the Company
and be authenticated by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities of such series. Without unnecessary delay the
Company will execute and will furnish definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange therefor (without charge to the
holders), at the office or agency of the Company designated for the purpose in the Borough of
Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or
agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount
of definitive Securities of such series, unless the Company advises the Trustee to the effect that
definitive Securities need not be executed and furnished until further notice from the Company.
Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series authenticated and delivered hereunder.
Section 2.7 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated or be destroyed, lost or
stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Companys
request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the
same series, bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or
stolen. In every case the applicant for a substituted Security shall furnish to the Company and the
Trustee such security or indemnity as may be required by them to save each of them harmless, and,
in every case of destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicants
Security and of the ownership thereof. The Trustee may authenticate any such substituted Security
and deliver the same upon the written request or authorization of any officer of the Company. Upon
the issuance of any substituted Security, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Security that has matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as they may require to save them harmless, and, in case of destruction, loss
or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or
theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this Section shall constitute
an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost
or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities
of the same series duly issued hereunder. All Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
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replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude
(to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
Section 2.8 Cancellation.
All Securities surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of the provisions of
this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver
to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures and deliver a
certificate of disposition to the Company. If the Company shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are delivered to the Trustee
for cancellation.
Section 2.9 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give or be construed
to give to any Person, other than the parties hereto and the holders of the Securities any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained; all such covenants, conditions and provisions being for
the sole benefit of the parties hereto and of the holders of the Securities.
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there may be an
Authenticating Agent for any or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, transfer or partial redemption
thereof, 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. All
references in this Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall
be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the laws of any jurisdiction under
which it is organized or in which it is doing business to conduct a trust business, and that is
otherwise authorized under such laws to conduct such business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating Agent shall cease to
be eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time (and upon request by the
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Company shall) terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor
Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance
of its appointment hereunder, shall become vested with all the rights, powers and duties of its
predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company shall establish pursuant to Section 2.01 that the Securities of a
particular series are to be issued as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that
(i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount
of, all of the Outstanding Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositarys instruction and (iv) shall bear a legend substantially to the following effect:
Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred,
in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary.
(b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be
transferred, in whole but not in part and in the manner provided in Section 2.05, only to another
nominee of the Depositary for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities notifies the Company that it
is unwilling or unable to continue as Depositary for such series or if at any time the Depositary
for such series shall no longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, and a successor Depositary for such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, or if an Event of Default has occurred and is continuing and the
Company has received a request from the Depositary, this Section 2.11 shall no longer be applicable
to the Securities of such series and the Company will execute, and subject to Section 2.04, the
Trustee will authenticate and deliver the Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such Global Security. In
addition, the Company may at any time determine that the Securities of any series shall no longer
be represented by a Global Security and that the provisions of this Section 2.11 shall no longer
apply to the Securities of such series. In such event the Company will execute and, subject to
Section 2.04, the Trustee, upon receipt of an Officers Certificate evidencing such determination
by the Company, will authenticate and deliver the Securities of such series in definitive
registered form without coupons, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security of such series in exchange for such Global
Security. Upon the exchange of the Global Security for such Securities in definitive registered
form without coupons, in authorized denominations, the Global Security shall be canceled by the
Trustee. Such Securities in definitive registered form issued in exchange
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for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the Persons in whose names such Securities are so
registered.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.1 Redemption.
The Company may redeem the Securities of any series issued hereunder on and after the dates
and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.2 Notice of Redemption.
(a) In case the Company shall desire to exercise such right to redeem all or, as the case may
be, a portion of the Securities of any series in accordance with any right the Company reserved for
itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to,
give notice of such redemption to holders of the Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not
more than 90 days before the date fixed for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register, unless a shorter period is specified in
the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered holder receives the
notice. In any case, failure duly to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in the notice, shall not affect the
validity of the proceedings for the redemption of any other Securities of such series or any other
series. In the case of any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers Certificate evidencing compliance with any such
restriction.
Each such notice of redemption shall specify the date fixed for redemption and the redemption
price at which Securities of that series are to be redeemed, and shall state that payment of the
redemption price of such Securities to be redeemed will be made at the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, that from and after said date interest will cease to accrue and that
the redemption is for a sinking fund, if such is the case. If less than all the Securities of a
series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in
part shall specify the particular Securities to be so redeemed.
In case any Security is to be redeemed in part only, the notice that relates to such Security
shall state the portion of the principal amount thereof to be redeemed, and shall state that on and
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after the redemption date, upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be redeemed, the Company shall give the
Trustee at least 45 days notice (unless a shorter notice shall be satisfactory to the Trustee) in
advance of the date fixed for redemption as to the aggregate principal amount of Securities of the
series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it
shall deem appropriate and fair in its discretion and that may provide for the selection of a
portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Securities of a denomination larger than $1,000, the Securities to
be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the
Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect,
by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying
agent to call all or any part of the Securities of a particular series for redemption and to give
notice of redemption in the manner set forth in this Section, such notice to be in the name of the
Company or its own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying agent, the Company
shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Security Register, transfer books or other records, or suitable
copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this Section.
Section 3.3 Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been completed as above provided, the
Securities or portions of Securities of the series to be redeemed specified in such notice shall
become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption and interest on
such Securities or portions of Securities shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such redemption price and accrued
interest with respect to any such Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the place of payment specified in the
notice, said Securities shall be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed for redemption (but if the date
fixed for redemption is an interest payment date, the interest installment payable on such date
shall be payable to the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Security of such series that is to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the expense of the Company, a new
Security of the same series of authorized denominations in principal amount equal to the unredeemed
portion of the Security so presented.
Section 3.4 Sinking Fund.
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The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the
retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01
for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a mandatory sinking fund payment, and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an optional sinking fund payment. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
Section 3.5 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit
Securities of a series that 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 3.6 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any series of Securities
(unless a shorter period shall be satisfactory to the Trustee), 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 the series, the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the
basis for such credit and will, together with such Officers Certificate, deliver to the Trustee
any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.02 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 3.02. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.1 Payment of Principal, Premium and Interest.
The Company will duly and punctually pay or cause to be paid the principal of (and premium, if
any) and interest on the Securities of that series at the time and place and in the manner provided
herein and established with respect to such Securities. Payments of principal on
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the Securities may be made at the time provided herein and established with respect to such
Securities by U.S. dollar check drawn on and mailed to the address of the Securityholder entitled
thereto as such address shall appear in the Security Register, or U.S. dollar wire transfer to, a
U.S. dollar account (such wire transfer to be made only to a Securityholder of an aggregate
principal amount of Securities of the applicable series in excess of U.S. $2,000,000 and only if
such Securityholder shall have furnished wire instructions to the Trustee no later than 15 days
prior to the relevant payment date). Payments of interest on the Securities may be made at the time
provided herein and established with respect to such Securities by U.S. dollar check mailed to the
address of the Securityholder entitled thereto as such address shall appear in the Security
Register, or U.S. dollar wire transfer to, a U.S. dollar account (such a wire transfer to be made
only to a Securityholder of an aggregate principal amount of Securities of the applicable series in
excess of U.S. $2,000,000 and only if such Securityholder shall have furnished wire instructions in
writing to the Security Registrar and the Trustee no later than 15 days prior to the relevant
payment date).
Section 4.2 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company agrees to maintain an
office or agency in the Borough of Manhattan, the City and State of New York, with respect to each
such series and at such other location or locations as may be designated as provided in this
Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of
that series may be presented as herein above authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the Securities of that series
and this Indenture may be given or served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by any officer authorized to sign an
Officers Certificate and delivered to the Trustee, designate some other office or agency for such
purposes or any of them. If at any time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such presentations, notices and
demands. The Company initially appoints the Corporate Trust Office of the Trustee located in the
Borough of Manhattan, the City of New York as its paying agent with respect to the Securities.
Section 4.3 Paying Agents.
(a) the Company shall appoint one or more paying agents for all or any series of the
Securities, other than the Trustee, the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section:
(1) that it will hold all sums held by it as such agent for the payment of the principal of
(and premium, if any) or interest on the Securities of that series (whether such sums have been
paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;
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(2) that it will give the Trustee notice of any failure by the Company (or by any other
obligor of such Securities) to make any payment of the principal of (and premium, if any) or
interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure referred to in the
preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to any series of the
Securities, it will on or before each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or
any failure (by it or any other obligor on such Securities) to take such action. 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 premium, if any) or interest on any Securities of that series,
deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) 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 this action or failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums
in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) 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 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 terms and conditions as those upon which such sums were held by the Company or such paying
agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to such money.
Section 4.4 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 4.5 Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain Outstanding, consolidate with or
merge into any other Person, in either case where the Company is not the survivor of such
transaction, or sell or convey all or substantially all of its property to any other Person unless
the provisions of Article Ten hereof are complied with.
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ARTICLE 5
SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY AND
THE TRUSTEE
Section 5.1 Company to Furnish Trustee Names and Addresses of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each
regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Securities as of such regular
record date, provided that the Company shall not be obligated to furnish or cause to furnish such
list at any time that the list shall not differ in any respect from the most recent list furnished
to the Trustee by the Company and (b) 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; provided,
however, that, in either case, no such list need be furnished for any series for which the Trustee
shall be the Security Registrar.
Section 5.2 Preservation of Information; Communications With Securityholders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Securities contained in the most recent
list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt
of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act
with other Securityholders with respect to their rights under this Indenture or under the
Securities, and, in connection with any such communications, the Trustee shall satisfy its
obligations under Section 312(b) of the Trust Indenture Act in accordance with the provisions of
Section 312(b) of the Trust Indenture Act.
Section 5.3 Reports by the Company.
The Company covenants and agrees to provide a copy to the Trustee, after the Company files the
same with the Securities and Exchange Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of the foregoing as the
Securities and Exchange Commission may from time to time by rules and regulations prescribe) that
the Company files with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the
Trustee any materials for which the Company has sought and received confidential treatment by the
Securities and Exchange Commission.
Section 5.4 Reports by the Trustee.
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(a) If required by Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60)
days after each May 1, shall transmit by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register, a brief report dated as of such May
1, which complies with Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to Securityholders, be
filed by the Trustee with the Company, with each securities exchange upon which any Securities are
listed (if so listed) and also with the Securities and Exchange Commission. The Company agrees to
notify the Trustee when any Securities become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
OF DEFAULT
Section 6.1 Events of Default.
(a) Whenever used herein with respect to Securities of a particular series, Event of Default
means any one or more of the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any installment of interest upon any of the
Securities of that series, as and when the same shall become due and payable, and such default
continues for a period of 90 days; provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any indenture supplemental hereto shall not
constitute a default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or premium, if any, on) any of
the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking
or analogous fund established with respect to that series; provided, however, that a valid
extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform any other of its covenants or agreements with
respect to that series contained in this Indenture or otherwise established with respect to that
series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has
been expressly included in this Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating that such notice is a Notice of
Default hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the
Securities of that series at the time Outstanding;
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(4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a
voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for
relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all
or substantially all of its property or (iii) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days.
(b) In each and every such case (other than an Event of Default specified in clause (4) or
clause (5) above), unless the principal of all the Securities of that series shall have already
become due and payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by such Securityholders), may declare the principal of
(and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to
be due and payable immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above
occurs, the principal of and accrued and unpaid interest on all the Securities of that series shall
automatically be immediately due and payable without any declaration or other act on the part of
the Trustee or the holders of the Securities.
(c) At any time after the principal of (and premium, if any, on) and accrued and unpaid
interest on the Securities of that series shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of
that series then Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited
with the Trustee a sum sufficient to pay all matured installments of interest upon all the
Securities of that series and the principal of (and premium, if any, on) any and all Securities of
that series that shall have become due otherwise than by acceleration (with interest upon such
principal and premium, if any, and, to the extent that such payment is enforceable under applicable
law, upon overdue installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to the Trustee under
Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such
series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid
interest on Securities of that series that shall not have become due by their terms, shall have
been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any subsequent default or
impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with respect to Securities
of that series under this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case, subject to any
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determination in such proceedings, the Company and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and powers of the Company
and the Trustee shall continue as though no such proceedings had been taken.
Section 6.2 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that (i) in case it shall default in the payment of any installment
of interest on any of the Securities of a series, or in any payment required by any sinking or
analogous fund established with respect to that series as and when the same shall have become due
and payable, and such default shall have continued for a period of 90 days, or (ii) in case it
shall default in the payment of the principal of (or premium, if any, on) any of the Securities of
a series when the same shall have become due and payable, whether upon maturity of the Securities
of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Securities of that
series, the whole amount that then shall have been become due and payable on all such Securities
for principal (and premium, if any) or interest, or both, as the case may be, with interest upon
the overdue principal (and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law) upon overdue installments of interest at the rate per annum
expressed in the Securities of that series; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee
under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Securities of that series
and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity
out of the property of the Company or other obligor upon the Securities of that series, wherever
situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
readjustment, arrangement, composition or judicial proceedings affecting the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any
action therein that may be permitted by the court and shall (except as may be otherwise provided by
law) be entitled to file such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of Securities of such
series allowed for the entire amount due and payable by the Company under the Indenture at the date
of institution of such proceedings and for any additional amount that may become due and payable by
the Company after such date, and to collect and receive any moneys or other property payable or
deliverable on any such claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of such series to make
such payments to the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to such Securityholders, to pay to the Trustee any amount due it under
Section 7.06.
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(d) All rights of action and of asserting claims under this Indenture, or under any of the
terms established with respect to Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.
Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding.
Section 6.3 Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article with respect to a particular
series of Securities shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal (or premium, if
any) or interest, upon presentation of the Securities of that series, and notation thereon of the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses of collection and of all amounts
payable to the Trustee under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon Securities of such series for
principal (and premium, if any) and interest, 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 premium, if any) and interest,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company or any other Person lawfully
entitled thereto.
Section 6.4 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (i) such holder previously shall have given to the Trustee
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written notice of an Event of Default and of the continuance thereof with respect to the
Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the
holders of not less than 25% in aggregate principal amount of the Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder; (iii) such holder or holders shall have offered to
the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities
to be incurred therein or thereby; (iv) the Trustee for 90 days after its receipt of such notice,
request and offer of indemnity, shall have failed to institute any such action, suit or proceeding
and (v) during such 90 day period, the holders of a majority in principal amount of the Securities
of that series do not give the Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary or any other provisions of this
Indenture, the right of any holder of any Security to receive payment of the principal of (and
premium, if any) and interest on such Security, as therein provided, on or after the respective due
dates expressed in such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such respective dates or
redemption date, shall not be impaired or affected without the consent of such holder and by
accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and common benefit of all holders
of Securities of such series. For the protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Section 6.5 Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07, all powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or otherwise established
with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given
by this Article or by law to the Trustee or the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
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Section 6.6 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities of any series at the
time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such series; provided,
however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee in good faith shall, by a Responsible Officer or officers of the
Trustee, determine that the proceeding so directed, subject to the Trustees duties under the Trust
Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to
the Securityholders not involved in the proceeding. The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding affected thereby,
determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities
of such series waive any past default in the performance of any of the covenants contained herein
or established pursuant to Section 2.01 with respect to such series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities
otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium has been deposited with the Trustee
(in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders
of the Securities of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 6.7 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities by such holders
acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys fees, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security of such series, on or after
the respective due dates expressed in such Security or established pursuant to this Indenture.
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.1 Certain Duties and Responsibilities of Trustee.
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(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities
of a series and after the curing of all Events of Default with respect to the Securities of that
series that may have occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this Indenture, and no
implied covenants shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a series has occurred (that has not been cured or
waived), the Trustee shall exercise with respect to Securities of that series such of the rights
and powers vested in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs.
(b) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that:
(1) prior to the occurrence of an Event of Default with respect to the Securities of a series
and after the curing or waiving of all such Events of Default with respect to that series that may
have occurred:
(A) the duties and obligations of the Trustee shall with respect to the Securities of such
series be determined solely by the express provisions of this Indenture, and the Trustee shall not
be liable with respect to the Securities of such series except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to
the Securities of such series conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Indenture with respect to the
Securities of that series; and
(4) None of the provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers if there is
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reasonable ground for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk
is not reasonably assured to it.
Section 7.2 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(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, consent, order,
approval, bond, security or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company by
any authorized officer of the Company (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken
or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a series of the Securities (that has not
been cured or waived), to exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs;
(e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good
faith and believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(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, consent,
order, approval, bond, security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the Outstanding Securities of the
particular series affected thereby (determined as provided in Section 8.04); provided, however,
that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities
as a condition to so proceeding. The reasonable expense of every such
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examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the
Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of
Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1) and 6.01(a)(2) or
(2) any Default or Event of Default of which the Trustee shall have received written notification
in the manner set forth in this Indenture or a Responsible Officer of the Trustee shall have
obtained actual knowledge. Delivery of reports, information and documents to the Trustee under
Section 5.03 is for informational purposes only and the information and the Trustees receipt of
the foregoing shall not constitute constructive notice of any information contained therein, or
determinable from information contained therein including the Companys compliance with any of
their covenants thereunder (as to which the Trustee is entitled to rely exclusively on an Officers
Certificate).
Section 7.3 Trustee Not Responsible for Recitals or Issuance or Securities.
(a) The recitals contained herein and in the Securities shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency of this Indenture
or of the Securities.
(c) The Trustee shall not be accountable for the use or application by the Company of any of
the Securities or of the proceeds of such Securities, or for the use or application of any moneys
paid over by the Trustee in accordance with any provision of this Indenture or established pursuant
to Section 2.01, or for the use or application of any moneys received by any paying agent other
than the Trustee.
Section 7.4 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.
Section 7.5 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but 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 moneys received by it hereunder except such as it may
agree with the Company to pay thereon.
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Section 7.6 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled
to, such reasonable compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as the Company and the Trustee may from time to
time agree in writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all Persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from its negligence or
bad faith and except as the Company and Trustee may from time to time agree in writing. The Company
also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for,
and to hold it harmless against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of defending itself
against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a
lien prior to that of the Securities upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the holders of particular Securities.
Section 7.7 Reliance on Officers Certificate.
Except as otherwise provided in Section 7.01, whenever in the administration of the provisions
of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
Section 7.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.9 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws of the United
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States of America or any state or territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Securities and Exchange Commission,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation or other Person publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation or other Person
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect specified in Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed may at any time resign with respect to
the Securities of one or more series by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee with respect to
Securities of such series by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing 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 Securities of such series, or any Securityholder of that series who has been a bona fide
holder of a Security or Securities for at least six months may on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request
therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or
Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09
and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be appointed or consented to, or any public officer shall take
30
charge or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation; then, in any such case, the Company may remove the
Trustee with respect to all Securities and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or any Securityholder
who has been a bona fide holder of a Security or Securities for at least six months may, on behalf
of that holder and all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the Securities of any series at
the time Outstanding may at any time remove the Trustee with respect to such series by so notifying
the Trustee and the Company and may appoint a successor Trustee for such series with the consent of
the Company.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee with
respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section
7.11.
(e) Any successor trustee appointed pursuant to this Section may be appointed with respect to
the Securities of one or more series or all of such series, and at any time there shall be only one
Trustee with respect to the Securities of any particular series.
Section 7.11 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 (i)
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, (ii) 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
31
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 (iii) 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 supplemental indenture shall constitute such Trustees co-trustees of the same
trust, 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 that no Trustee shall
be responsible for any act or failure to act on the part of any other Trustee hereunder; 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, such retiring Trustee shall
with respect to the Securities of that or those series to which the appointment of such successor
trustee relates have no further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this Indenture, 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, to the extent contemplated by such supplemental indenture, the 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.
(e) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
Section 7.12 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 the corporate trust business of the
Trustee, including the administration of the trust created by this Indenture, shall be the
successor of the Trustee hereunder, provided that such corporation shall be qualified under the
provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution
or filing of any paper or any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger,
32
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 7.13 Preferential Collection of Claims Against the Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent included therein.
Section 7.14 Notice of Default.
If any Default or any Event of Default occurs and is continuing and if such Default or Event
of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Securityholder in the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act notice of the Default or Event of Default within 45 days after it occurs, unless such Default
or Event of Default has been cured; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall be
protected in withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.1 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Securities of a particular series may take any
action (including the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of
that series in person or by agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such
a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be Securityholders for the purposes
of determining whether Securityholders of the requisite proportion of Outstanding Securities of
that series have authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities
of that series shall be computed as of the record date; provided, however,
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that no such authorization, agreement or consent by such Securityholders on the record date
shall be deemed effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
Section 8.2 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any instrument may be proved in
any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security Register of such Securities or
by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any matter referred to in this Section as it
shall deem necessary.
Section 8.3 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security, the Company, the
Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name
such Security shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to the contrary.
Section 8.4 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal amount of Securities
of a particular series have concurred in any direction, consent or waiver under this Indenture, the
Securities of that series that are owned by the Company or any other obligor on the Securities of
that series or by any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgees right so to act with respect to such Securities and that
the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other
34
obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
Section 8.5 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of the majority or percentage in aggregate
principal amount of the Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Security. Except as aforesaid any such action taken by the holder of
any Security shall be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto
is made upon such Security. Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the Trustee and the
holders of all the Securities of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without the Consent of Securityholders.
In addition to any supplemental indenture otherwise authorized by this Indenture, the Company
and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in addition to or in place of certificated Securities;
(d) to add to the covenants, restrictions, conditions or provisions relating to the Company
for the benefit of the holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the benefit of less than all series of
Securities, stating that such covenants, restrictions, conditions or provisions are expressly being
included solely for the benefit of such series), to make the occurrence, or the occurrence and the
continuance, of a default in any such additional covenants, restrictions, conditions or provisions
an Event of Default, or to surrender any right or power herein conferred upon the Company;
35
(e) to add to, delete from, or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as
herein set forth;
(f) to make any change that does not adversely affect the rights of any Securityholder in any
material respect;
(g) to provide for the issuance of and establish the form and terms and conditions of the
Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to
add to the rights of the holders of any series of Securities;
(h) to evidence and provide for the acceptance of appointment hereunder by a successor
trustee; or
(i) to comply with any requirements of the Securities and Exchange Commission or any successor
in connection with the qualification of this Indenture under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustees own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section may be executed by the
Company and the Trustee without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.
Section 9.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not less than a
majority in aggregate principal amount of the Securities of each series affected by such
supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a
Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of
such series under this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and affected thereby, (a)
extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture.
36
It shall not be necessary for the consent of the Securityholders of any series affected
thereby under this Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Section 9.3 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of this Article or
of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders
of Securities of the series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.4 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated and delivered
after the execution of such supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, may bear a notation in form approved by the Company, provided such form meets the
requirements of any securities exchange upon which such series may be listed, as to any matter
provided for in such supplemental indenture. If the Company shall so determine, new Securities of
that series so modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the Securities of that series
then Outstanding.
Section 9.5 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions authorizing the
execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join
with the Company in the execution of such supplemental indenture unless such supplemental indenture
affects the Trustees own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, may receive an Officers
Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms to, the terms of this
Article and that it is proper for the Trustee under the provisions of this Article to join in the
execution thereof; provided, however, that such Officers Certificate or Opinion of Counsel need
not be provided in connection with the execution of a supplemental indenture that establishes the
terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to
the Securityholders of all series affected thereby as their names and addresses
37
appear upon the Security Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.1 Company May Consolidate, Etc.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in
an Officers Certificate, or established in one or more indentures supplemental to this Indenture,
nothing contained in this Indenture shall prevent any consolidation or merger of the Company with
or into any other Person (whether or not affiliated with the Company) or successive consolidations
or mergers in which the Company or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or
its successor or successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or its successor or successors) authorized
to acquire and operate the same; provided, however, (a) the Company hereby covenants and agrees
that, upon any such consolidation or merger (in each case, if the Company is not the survivor of
such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (premium, if any) and interest on all of the Securities of all series in
accordance with the terms of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture with respect to
each series or established with respect to such series pursuant to Section 2.01 to be kept or
performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform
to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory in form to
the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or
into which the Company shall have been merged, or by the entity which shall have acquired such
property and (b) in the event that the Securities of any series then Outstanding are convertible
into or exchangeable for shares of common stock or other securities of the Company, such entity
shall, by such supplemental indenture, make provision so that the Securityholders of Securities of
that series shall thereafter be entitled to receive upon conversion or exchange of such Securities
the number of securities or property to which a holder of the number of shares of common stock or
other securities of the Company deliverable upon conversion or exchange of those Securities would
have been entitled had such conversion or exchange occurred immediately prior to such
consolidation, merger, sale, conveyance, transfer or other disposition.
Section 10.2 Successor Entity Substituted.
(a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
and upon the assumption by the successor entity by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section
10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to
and be substituted for the Company with the same effect as if it had been named as the Company
herein, and thereupon the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities.
38
(b) In case of any such consolidation, merger, sale, conveyance, transfer or other
disposition, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
(c) Nothing contained in this Article shall require any action by the Company in the case of a
consolidation or merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).
Section 10.3 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive an Officers Certificate
or an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply with the provisions of
this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.1 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee for cancellation all
Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation
(other than any Securities that shall have been destroyed, lost or stolen and that shall have been
replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated and held in trust by the Company
and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05);
or (b) all such Securities of a particular series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations
or 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 at
maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder with respect to such series by the
Company then this Indenture shall thereupon cease to be of further effect with respect to such
series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that
shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06
and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.
Section 11.2 Discharge of Obligations.
39
If at any time all such Securities of a particular series not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as described in Section 11.01
shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption
all such Securities of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company with respect to such series, then
after the date such moneys or Governmental Obligations, as the case may be, are deposited with the
Trustee the obligations of the Company under this Indenture with respect to such series shall cease
to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03,
7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.3 Deposited Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.02 shall be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.
Section 11.4 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand
of the Company, be paid to the Trustee and thereupon such paying agent hall be released from all
further liability with respect to such moneys or Governmental Obligations.
Section 11.5 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then
held by the Company, in trust for payment of principal of or premium, if any, or interest on the
Securities of a particular series that are not applied but remain unclaimed by the holders of such
Securities for at least two years after the date upon which the principal of (and premium, if any)
or interest on such Securities shall have respectively become due and payable, or such other
shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be
repaid to the Company on May 31 of each year or upon the Companys request or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general
creditor, look only to the Company for the payment thereof.
40
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 12.1 No Recourse.
No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any
Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such, of the Company or
of any predecessor or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood
that this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such incorporator, stockholder,
officer or director as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issuance of such
Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.1 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture made by or on
behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.2 Actions by Successors.
Any act or proceeding by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be done and performed
with like force and effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful successor of the Company.
Section 13.3 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon
such power so surrendered shall terminate both as to the Company and as to any successor
corporation.
41
Section 13.4 Notices.
Except as otherwise expressly provided herein, any notice, request or demand that by any
provision of this Indenture is required or permitted to be given, made or served by the Trustee or
by the holders of Securities or by any other Person pursuant to this Indenture to or on the Company
may be given or served by being deposited in first class mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Trustee), as follows: PFSweb, Inc., 500
North Central Expressway, Plano, TX, Att: Chief Financial Officer. Any notice, election, request or
demand by the Company or any Securityholder or by any other Person pursuant to this Indenture to or
upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.5 Governing Law.
This Indenture and each Security shall be deemed to be a contract made under the internal laws
of the State of New York, and for all purposes shall be construed in accordance with the laws of
said State, except to the extent that the Trust Indenture Act is applicable.
Section 13.6 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness and not as equity for
federal income tax purposes. The provisions of this Indenture shall be interpreted to further this
intention.
Section 13.7 Certificates and Opinions as to Conditions Precedent.
(a) Upon any application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers
Certificate stating that all conditions precedent provided for in this Indenture (other than the
certificate to be delivered pursuant to Section 13.12) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no additional certificate or
opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee
with respect to compliance with a condition or covenant in this Indenture shall include (i) a
statement that the Person making such certificate or opinion has read such covenant or condition;
(ii) 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; (iii) a statement
that, in the opinion of such Person, he has made such examination or investigation as is reasonably
necessary to enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.\
Section 13.8 Payments on Business Days.
42
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in
an Officers Certificate, or established in one or more indentures supplemental to this Indenture,
in any case where the date of maturity of interest or principal of any Security or the date of
redemption of any Security shall not be a Business Day, then payment of interest or principal (and
premium, if any) may be made on the next succeeding Business Day with the same force and effect as
if made on the nominal date of maturity or redemption, and no interest shall accrue for the period
after such nominal date.
Section 13.9 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
Section 13.10 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same instrument.
Section 13.11 Separability.
In case any one or more of the provisions contained in this Indenture or in the Securities of
any series shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.12 Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year
during which any Securities of any series were outstanding, an officers certificate stating
whether or not the signers know of any Default or Event of Default that occurred during such fiscal
year. Such certificate shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer of the Company that a review has been
conducted of the activities of the Company and the Companys performance under this Indenture and
that the Company has complied with all conditions and covenants under this Indenture. For purposes
of this Section 13.12, such compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If the officer of the Company signing such
certificate has knowledge of such a Default or Event of Default, the certificate shall describe any
such Default or Event of Default and its status.
[SIGNATURE PAGE FOLLOWS]
43
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as
of the day and year first above written.
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PFSWEB, INC.
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By: |
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Name: |
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Title: |
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[TRUSTEE], as Trustee
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By: |
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Name: |
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Title: |
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[SIGNATURE PAGE TO SENIOR DEBT SECURITIES]
44
CROSS-REFERENCE TABLE (1)
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Section of Trust Indenture |
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Section of Indenture |
Act of 1939, as Amended |
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310(a) |
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7.09 |
310(b) |
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7.08 |
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7.10 |
310(c) |
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Inapplicable |
311(a) |
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7.13 |
311(b) |
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7.13 |
311(c) |
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Inapplicable |
312(a) |
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5.01 |
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5.02(a) |
312(b) |
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5.02(c) |
312(c) |
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5.02(c) |
313(a) |
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5.04(a) |
313(b) |
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5.04(b) |
313(c) |
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5.04(a) |
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5.04(b) |
313(d) |
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5.04(c) |
314(a) |
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5.03 |
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13.12 |
314(b) |
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Inapplicable |
314(c) |
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13.07(a) |
314(d) |
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Inapplicable |
314(e) |
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13.07(b) |
314(f) |
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Inapplicable |
315(a) |
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7.01(a) |
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7.01(b) |
315(b) |
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7.14 |
315(c) |
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7.01 |
315(d) |
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7.01(b) |
315(e) |
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6.07 |
316(a) |
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6.06 |
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8.04 |
316(b) |
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6.04 |
316(c) |
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8.01 |
317(a) |
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6.02 |
317(b) |
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4.03 |
318(a) |
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13.09 |
(1) This Cross-Reference Table does not constitute part of the Indenture and shall not have any
bearing on the interpretation of any of its terms or provisions.
45
exv4w7
Exhibit 4.7
PFSWEB, INC.
SUBORDINATED DEBT SECURITIES
INDENTURE
Dated as of
Trustee
TABLE OF CONTENTS
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Page |
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Article 1 DEFINITIONS |
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1 |
Section 1.1 |
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Definitions of Terms |
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1 |
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Article 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES |
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5 |
Section 2.1 |
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Designation and Terms of Securities |
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5 |
Section 2.2 |
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Form of Securities and Trustees Certificate |
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7 |
Section 2.3 |
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Denominations: Provisions for Payment |
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7 |
Section 2.4 |
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Execution and Authentications |
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9 |
Section 2.5 |
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Registration of Transfer and Exchange |
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9 |
Section 2.6 |
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Temporary Securities |
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10 |
Section 2.7 |
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Mutilated, Destroyed, Lost or Stolen Securities |
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11 |
Section 2.8 |
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Cancellation |
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12 |
Section 2.9 |
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Benefits of Indenture |
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12 |
Section 2.10 |
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Authenticating Agent |
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12 |
Section 2.11 |
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Global Securities |
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13 |
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Article 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS |
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14 |
Section 3.1 |
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Redemption |
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14 |
Section 3.2 |
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Notice of Redemption |
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14 |
Section 3.3 |
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Payment Upon Redemption |
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15 |
Section 3.4 |
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Sinking Fund |
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16 |
Section 3.5 |
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Satisfaction of Sinking Fund Payments with Securities |
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16 |
Section 3.6 |
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Redemption of Securities for Sinking Fund |
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16 |
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Article 4 COVENANTS |
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16 |
Section 4.1 |
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Payment of Principal, Premium and Interest |
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16 |
Section 4.2 |
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Maintenance of Office or Agency |
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17 |
Section 4.3 |
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Paying Agents |
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17 |
Section 4.4 |
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Appointment to Fill Vacancy in Office of Trustee |
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18 |
Section 4.5 |
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Compliance with Consolidation Provisions |
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18 |
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Article 5 SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
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19 |
Section 5.1 |
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Company to Furnish Trustee Names and Addresses of Securityholders |
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19 |
Section 5.2 |
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Preservation Of Information; Communications With Securityholders |
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19 |
Section 5.3 |
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Reports by the Company |
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19 |
Section 5.4 |
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Reports by the Trustee |
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20 |
i
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Article 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT |
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20 |
Section 6.1 |
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Events of Default |
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20 |
Section 6.2 |
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Collection of Indebtedness and Suits for Enforcement by Trustee |
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22 |
Section 6.3 |
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Application of Moneys Collected |
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23 |
Section 6.4 |
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Limitation on Suits |
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24 |
Section 6.5 |
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Rights and Remedies Cumulative; Delay or Omission Not Waiver |
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24 |
Section 6.6 |
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Control by Securityholders |
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25 |
Section 6.7 |
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Undertaking to Pay Costs |
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25 |
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Article 7 CONCERNING THE TRUSTEE |
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26 |
Section 7.1 |
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Certain Duties and Responsibilities of Trustee |
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26 |
Section 7.2 |
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Certain Rights of Trustee |
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27 |
Section 7.3 |
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Trustee Not Responsible for Recitals or Issuance or Securities |
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28 |
Section 7.4 |
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May Hold Securities |
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28 |
Section 7.5 |
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Moneys Held in Trust |
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28 |
Section 7.6 |
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Compensation and Reimbursement |
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29 |
Section 7.7 |
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Reliance on Officers Certificate |
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29 |
Section 7.8 |
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Disqualification; Conflicting Interests |
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29 |
Section 7.9 |
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Corporate Trustee Required; Eligibility |
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29 |
Section 7.10 |
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Resignation and Removal; Appointment of Successor |
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30 |
Section 7.11 |
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Acceptance of Appointment By Successor |
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31 |
Section 7.12 |
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Merger, Conversion, Consolidation or Succession to Business |
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32 |
Section 7.13 |
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Preferential Collection of Claims Against the Company |
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33 |
Section 7.14 |
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Notice of Default |
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33 |
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Article 8 CONCERNING THE SECURITYHOLDERS |
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33 |
Section 8.1 |
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Evidence of Action by Securityholders |
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33 |
Section 8.2 |
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Proof of Execution by Securityholders |
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34 |
Section 8.3 |
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Who May be Deemed Owners |
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34 |
Section 8.4 |
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Certain Securities Owned by Company Disregarded |
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34 |
Section 8.5 |
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Actions Binding on Future Securityholders |
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35 |
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Article 9 SUPPLEMENTAL INDENTURES |
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35 |
Section 9.1 |
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Supplemental Indentures Without the Consent of Securityholders |
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35 |
Section 9.2 |
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Supplemental Indentures With Consent of Securityholders |
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36 |
Section 9.3 |
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Effect of Supplemental Indentures |
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37 |
Section 9.4 |
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Securities Affected by Supplemental Indentures |
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37 |
Section 9.5 |
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Execution of Supplemental Indentures |
|
37 |
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Article 10 SUCCESSOR ENTITY |
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38 |
Section 10.1 |
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Company May Consolidate, Etc. |
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38 |
Section 10.2 |
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Successor Entity Substituted |
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38 |
Section 10.3 |
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Evidence of Consolidation, Etc. to Trustee |
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39 |
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Article 11 SATISFACTION AND DISCHARGE |
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39 |
Section 11.1 |
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Satisfaction and Discharge of Indenture |
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39 |
ii
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Section 11.2 |
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Discharge of Obligations |
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39 |
Section 11.3 |
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Deposited Moneys to be Held in Trust |
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40 |
Section 11.4 |
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Payment of Moneys Held by Paying Agents |
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40 |
Section 11.5 |
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Repayment to Company |
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40 |
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Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
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41 |
Section 12.1 |
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No Recourse |
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41 |
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Article 13 MISCELLANEOUS PROVISIONS |
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41 |
Section 13.1 |
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Effect on Successors and Assigns |
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41 |
Section 13.2 |
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Actions by Successor |
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41 |
Section 13.3 |
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Surrender of Company Powers |
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41 |
Section 13.4 |
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Notices |
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42 |
Section 13.5 |
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Governing Law |
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42 |
Section 13.6 |
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Treatment of Securities as Debt |
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42 |
Section 13.7 |
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Certificates and Opinions as to Conditions Precedent |
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42 |
Section 13.8 |
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Payments on Business Days |
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42 |
Section 13.9 |
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Conflict with Trust Indenture Act |
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43 |
Section 13.10 |
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Counterparts |
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43 |
Section 13.11 |
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Separability |
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43 |
Section 13.12 |
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Compliance Certificates |
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43 |
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Article 14 SUBORDINATION OF SECURITIES |
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44 |
Section 14.1 |
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Subordination Terms |
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44 |
iii
INDENTURE
INDENTURE, dated as of 20___, between PFSWEB, INC., a Delaware corporation (the
Company), and , as trustee (the Trustee):
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of subordinated debt securities (hereinafter
referred to as the Securities), in an unlimited aggregate principal amount to be issued from time
to time in one or more series as in this Indenture provided, as registered Securities without
coupons, to be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the execution of this
Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the
holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit
of the holders of Securities:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions of Terms. The terms defined in this Section (except as in this Indenture
or any indenture supplemental hereto otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section and shall include the plural as well as the
singular. All other terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or that are by reference in such Act or defined in the Securities Act of 1933, as
amended (except as herein or any indenture supplemental hereto otherwise expressly provided or
unless the context otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of the execution of this
instrument.
Authenticating Agent means an authenticating agent with respect to all or any of the series
of Securities appointed by the Trustee pursuant to Section 2.10.
Bankruptcy Law means Title 11, U.S. Code, or any similar federal or state law for the relief
of debtors.
Board of Directors means the Board of Directors of the Company or any duly authorized
committee of such Board.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
Business Day means, with respect to any series of Securities, any day other than a day on
which federal or state banking institutions in the Borough of Manhattan, the City of New York, or
in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law,
executive order or regulation to close.
Certificate means a certificate signed by any Officer. The Certificate need not comply with
the provisions of Section 13.07.
Company means PFSweb, Inc., a corporation duly organized and existing under the laws of the
State of Delaware, and, subject to the provisions of Article Ten, shall also include its successors
and assigns.
Corporate Trust Office means the office of the Trustee at which, at any particular time, its
corporate trust business shall be principally administered, which office at the date hereof is
located at o.
Custodian means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Default means any event, act or condition that with notice or lapse of time, or both, would
constitute an Event of Default.
Depositary means, with respect to Securities of any series for which the Company shall
determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under
the Securities and Exchange Act of 1934, as amended (the Exchange Act), or other applicable
statute or regulation, which, in each case, shall be designated by the Company pursuant to either
Section 2.01 or 2.11.
Event of Default means, with respect to Securities of a particular series, any event
specified in Section 6.01, continued for the period of time, if any, therein designated.
Global Security means, with respect to any series of Securities, a Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the Depositarys instruction,
all in accordance with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
Governmental Obligations means securities that are (a) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not callable or redeemable at
the option of the issuer thereof at any time prior to the stated maturity of the Securities, and
shall also include a depositary receipt issued by a bank or trust company as custodian with respect
to
any such Governmental Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any
2
amount
received by the custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such depositary receipt.
herein, hereof and hereunder, and other words of similar import, refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision.
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 in accordance
with the terms hereof.
Interest Payment Date, when used with respect to any installment of interest on a Security
of a particular series, means the date specified in such Security or in a Board Resolution or in an
indenture supplemental hereto with respect to such series as the fixed date on which an installment
of interest with respect to Securities of that series is due and payable.
Officer means, with respect to the Company, the chairman of the Board of Directors, a chief
executive officer, a president, a chief financial officer, a chief operating officer, any executive
vice president, any senior vice president, any vice president, the treasurer or any assistant
treasurer, the controller or any assistant controller or the secretary or any assistant secretary.
Officers Certificate means a certificate signed by any two Officers. Each such certificate
shall include the statements provided for in Section 13.07, if and to the extent required by the
provisions thereof.
Opinion of Counsel means an opinion in writing subject to customary exceptions of legal
counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in
accordance with the terms hereof. Each such opinion shall include the statements provided for in
Section 13.07, if and to the extent required by the provisions thereof.
Outstanding, when used with reference to Securities of any series, means, subject to the
provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Securities or portions of such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee shall have been
made for giving such notice; and (c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.
Person means any individual, corporation, partnership, joint venture, joint-stock company,
limited liability company, association, trust, unincorporated organization, any other
3
entity or
organization, including a government or political subdivision or an agency or instrumentality
thereof.
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 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or
stolen Security.
Responsible Officer when used with respect to the Trustee means the chairman of its board of
directors, the chief executive officer, the president, any vice president, the secretary, the
treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
Securities means the debt Securities authenticated and delivered under this Indenture.
Securityholder, holder of Securities, registered holder, or other similar term, means
the Person or Persons in whose name or names a particular Security shall be registered on the books
of the Company kept for that purpose in accordance with the terms of this Indenture.
Security Register and Security Registrar shall have the meanings as set forth in Section
2.05.
Subsidiary means, with respect to any Person, (i) any corporation at least a majority of
whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a majority of whose outstanding
partnership or similar interests shall at the time be owned by such Person, or by one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.
Trustee means, and, subject to the provisions of Article Seven, shall also include its
successors and assigns, and, if at any time there is more than one Person acting in such capacity
hereunder, Trustee shall mean each such Person. The term Trustee as used with respect to a
particular series of the Securities shall mean the trustee with respect to that series.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended.
Voting Stock, as applied to stock of any Person, means shares, interests, participations or
other equivalents in the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such power only by
reason of the occurrence of a contingency.
4
ARTICLE 2
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE
OF SECURITIES
Section 2.1 Designation and Terms of Securities.
(a) The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series up to the aggregate
principal amount of Securities of that series from time to time authorized by or pursuant to a
Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the initial
issuance of Securities of any series, there shall be established in or pursuant to a Board
Resolution, and set forth in an Officers Certificate, or established in one or more indentures
supplemental hereto:
(1) the title of the Securities of the series (which shall distinguish the Securities of that
series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of that series that 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 that
series);
(3) the date or dates on which the principal of the Securities of the series is payable, any
original issue discount that may apply to the Securities of that series upon their issuance, the
principal amount due at maturity, and the place(s) of payment;
(4) the rate or rates at which the Securities of the series shall bear interest or the manner
of calculation of such rate or rates, if any;
(5) the date or dates from which such interest shall accrue, the Interest Payment Dates on
which such interest will be payable or the manner of determination of such Interest Payment Dates,
the place(s) of payment, and the record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates or the manner of determination of such record dates;
(6) the right, if any, to extend the interest payment periods and the duration of such
extension;
(7) the period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole or in part, at the option
of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities of the series
pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments
made in cash in satisfaction of future sinking fund obligations)
or at the option of a holder thereof and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
5
(9) the form of the Securities of the series including the form of the Certificate of
Authentication for such series;
(10) if other than denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof, the denominations in which the Securities of the series shall be issuable;
(11) any and all other terms (including terms, to the extent applicable, relating to any
auction or remarketing of the Securities of that series and any security for the obligations of the
Company with respect to such Securities) with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including
any terms which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of that series;
(12) whether the Securities are issuable as a Global Security and, in such case, the terms and
the identity of the Depositary for such series;
(13) whether the Securities will be convertible into or exchangeable for shares of common
stock or other securities of the Company or any other Person and, if so, the terms and conditions
upon which such Securities will be so convertible or exchangeable, including the conversion or
exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or
optional (at the Companys option or the holders option) conversion or exchange features, and the
applicable conversion or exchange period;
(14) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01;
(15) any additional or different Events of Default or restrictive covenants (which may
include, among other restrictions, restrictions on the Companys ability or the ability of the
Companys Subsidiaries to: incur additional indebtedness; issue additional securities; create
liens; pay dividends or make distributions in respect of their capital stock; redeem capital stock;
place restrictions on such Subsidiaries placing restrictions on their ability to pay dividends,
make distributions or transfer assets; make investments or other restricted payments; sell or
otherwise dispose of assets; enter into sale-leaseback transactions; engage in transactions with
stockholders and affiliates; issue or sell stock of their Subsidiaries; or effect a consolidation
or merger) or financial covenants (which may include, among other financial covenants, financial
covenants that require the Company and its Subsidiaries to maintain specified interest coverage,
fixed charge, cash flow-based or asset-based ratios) provided for with respect to the Securities of
the series;
(16) if other than dollars, the coin or currency in which the Securities of the series are
denominated (including, but not limited to, foreign currency);
(17) the terms and conditions, if any, upon which the Company shall pay amounts in addition to
the stated interest, premium, if any and principal amounts of the Securities of the series to any
Securityholder that is not a United States person for federal tax purposes;
6
(18) any restrictions on transfer, sale or assignment of the Securities of the series; and
(19) the subordination terms of the Securities of the series.
All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board
Resolution of the Company, a copy of an appropriate record of such action shall be certified by the
secretary or an assistant secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers Certificate of the Company setting forth the terms of the series.
Securities of any particular series may be issued at various times, with different dates on
which the principal or any installment of principal is payable, with different rates of interest,
if any, or different methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.
Section 2.2 Form of Securities and Trustees Certificate.
The Securities of any series and the Trustees certificate of authentication to be borne by
such Securities shall be substantially of the tenor and purport as set forth in one or more
indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officers
Certificate, and they may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or
as may be required to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which Securities of that series may be
listed, or to conform to usage.
Section 2.3 Denominations: Provisions for Payment.
The Securities shall be issuable as registered Securities and in the denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10).
The Securities of a particular series shall bear interest payable on the dates and at the rate
specified with respect to that series. Subject to Section 2.01(a)(16), the principal of and the
interest on the Securities of any series, as well as any premium thereon in case of redemption
thereof prior to maturity, shall be payable in the coin or currency of the United States of America
that at the time is legal tender for public and private debt, at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, the City and State of New York.
Each Security shall be dated the date of its authentication. Interest on the Securities shall be
computed on the basis of a 360-day year composed of twelve 30-day months.
The interest installment on any Security that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date for Securities of that series shall be paid to the
Person in whose name said Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest installment. In the event that any
7
Security of a particular series or portion thereof is called for redemption and the redemption date
is subsequent to a regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Security will be paid upon presentation and surrender of
such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date for Securities of the same series (herein called Defaulted Interest)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by
virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its
election, as provided in clause (1) or clause (2) below:
(a) The Company may make payment of any Defaulted Interest on Securities to the Persons in
whose names such Securities (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 such Security and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not be more than 15 nor 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 Securityholder at his or her address as it appears in
the Security Register (as hereinafter defined), 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 mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Securities (or their respective Predecessor Securities) are registered on such
special record date.
(b) The Company may make payment of any Defaulted Interest on any Securities 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.
Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto
establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term
regular record date as used in this Section with respect to a series of Securities and any
Interest Payment Date for such series shall mean either the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the
first day of the month in which an Interest Payment Date established for such series pursuant to
8
Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month,
whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security of a series delivered under
this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.
Section 2.4 Execution and Authentications.
The Securities shall be signed on behalf of the Company by one of its Officers. Signatures may
be in the form of a manual or facsimile signature.
The Company may use the facsimile signature of any Person who shall have been an Officer,
notwithstanding the fact that at the time the Securities shall be authenticated and delivered or
disposed of such Person shall have ceased to be such an officer of the Company. The Securities may
contain such notations, legends or endorsements required by law, stock exchange rule or usage. Each
Security shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an authorized signatory of the
Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder and that the holder
is entitled to the benefits of this Indenture. 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 written order of the Company for
the authentication and delivery of such Securities, signed by an Officer, and the Trustee in
accordance with such written order shall authenticate and deliver such Securities.
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 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustees own rights, duties or immunities
under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable
to the Trustee.
Section 2.5 Registration of Transfer and Exchange.
(a) Securities of any series may be exchanged upon presentation thereof at the office or
agency of the Company designated for such purpose in the Borough of Manhattan, the City and State
of New York, for other Securities of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section. In respect of any
Securities so surrendered for exchange, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in exchange therefor the Security or
Securities of the
9
same series that the Securityholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or agency designated for such
purpose in the Borough of Manhattan, the City and State of New York, or such other location
designated by the Company, a register or registers (herein referred to as the Security Register)
in which, subject to such reasonable regulations as it may prescribe, the Company shall register
the Securities and the transfers of Securities as in this Article provided and which at all
reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of
registering Securities and transfer of Securities as herein provided shall be appointed as
authorized by Board Resolution (the Security Registrar).
Upon surrender for transfer of any Security at the office or agency of the Company designated
for such purpose, the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new Security or Securities of
the same series as the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration of transfer, as provided
in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by
a written instrument or instruments of transfer, in form satisfactory to the Company or the
Security Registrar, duly executed by the registered holder or by such holders duly authorized
attorney in writing.
(c) Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth
in an Officers Certificate, or established in one or more indentures supplemental to this
Indenture, no service charge shall be made for any exchange or registration of transfer of
Securities, or issue of new Securities in case of partial redemption of any series, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not
involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or register the transfer of any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding Securities of the same series
and ending at the close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for redemption, other than
the unredeemed portion of any such Securities being redeemed in part. The provisions of this
Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.
Section 2.6 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and
the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Every temporary Security of any series shall be executed by the
10
Company
and be authenticated by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Securities of such series. Without unnecessary delay the
Company will execute and will furnish definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange therefor (without charge to the
holders), at the office or agency of the Company designated for the purpose in the Borough of
Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or
agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount
of definitive Securities of such series, unless the Company advises the Trustee to the effect that
definitive Securities need not be executed and furnished until further notice from the Company.
Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series authenticated and delivered hereunder.
Section 2.7 Mutilated, Destroyed, Lost or Stolen Securities.
In case any temporary or definitive Security shall become mutilated or be destroyed, lost or
stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Companys
request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the
same series, bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or
stolen. In every case the applicant for a substituted Security shall furnish to the Company and the
Trustee such security or indemnity as may be required by them to save each of them harmless, and,
in every case of destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicants
Security and of the ownership thereof. The Trustee may authenticate any such substituted Security
and deliver the same upon the written request or authorization of any officer of the Company. Upon
the issuance of any substituted Security, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Security that has matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as they may require to save them harmless, and, in case of destruction, loss
or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or
theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this Section shall constitute
an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost
or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities
of the same series duly issued hereunder. All Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude
(to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute
11
existing or hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
Section 2.8 Cancellation.
All Securities surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of the provisions of
this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver
to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures and deliver a
certificate of disposition to the Company. If the Company shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are delivered to the Trustee
for cancellation.
Section 2.9 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give or be construed
to give to any Person, other than the parties hereto and the holders of the Securities (and, with
respect to the provisions of Article Fourteen, the holders of any indebtedness of the Company to
which the Securities of any series are subordinated) any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Securities (and, with respect to the provisions of Article
Fourteen, the holders of any indebtedness of the Company to which the Securities of any series are
subordinated).
Section 2.10 Authenticating Agent.
So long as any of the Securities of any series remain Outstanding there may be an
Authenticating Agent for any or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, transfer or partial redemption
thereof, 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. All
references in this Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall
be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the laws of any jurisdiction under
which it is organized or in which it is doing business to conduct a trust business, and that is
otherwise authorized under such laws to conduct such business and is subject to supervision or
examination by federal or state authorities. If at any time any
Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
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Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility
of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder
as if originally named as an Authenticating Agent pursuant hereto.
Section 2.11 Global Securities.
(a) If the Company shall establish pursuant to Section 2.01 that the Securities of a
particular series are to be issued as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that
(i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount
of, all of the Outstanding Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositarys instruction and (iv) shall bear a legend substantially to the following effect:
Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred,
in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary.
(b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be
transferred, in whole but not in part and in the manner provided in Section 2.05, only to another
nominee of the Depositary for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities notifies the Company that it
is unwilling or unable to continue as Depositary for such series or if at any time the Depositary
for such series shall no longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, and a successor Depositary for such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, or if an Event of Default has occurred and is continuing and the
Company has received a request from the Depositary, this Section 2.11 shall no longer be applicable
to the Securities of such series and the Company will execute, and subject to Section 2.04, the
Trustee will authenticate and deliver the Securities of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such Global Security. In
addition, the Company may at any time determine that the Securities of any series shall no longer
be represented by a Global Security and that the provisions of this Section 2.11 shall no longer
apply to the Securities of such series. In such event the Company will execute and, subject to
Section 2.04, the Trustee, upon receipt of an Officers Certificate evidencing such determination
by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global Security of such series
in exchange for such Global Security. Upon the exchange of the Global Security for such Securities
13
in definitive registered form without coupons, in authorized denominations, the Global Security
shall be canceled by the Trustee. Such Securities in definitive registered form issued in exchange
for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the Persons in whose names such Securities are so
registered.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
Section 3.1 Redemption.
The Company may redeem the Securities of any series issued hereunder on and after the dates
and in accordance with the terms established for such series pursuant to Section 2.01 hereof.
Section 3.2 Notice of Redemption.
(a) In case the Company shall desire to exercise such right to redeem all or, as the case may
be, a portion of the Securities of any series in accordance with any right the Company reserved for
itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to,
give notice of such redemption to holders of the Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not
more than 90 days before the date fixed for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register, unless a shorter period is specified in
the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered holder receives the
notice. In any case, failure duly to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in the notice, shall not affect the
validity of the proceedings for the redemption of any other Securities of such series or any other
series. In the case of any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers Certificate evidencing compliance with any such
restriction.
Each such notice of redemption shall specify the date fixed for redemption and the redemption
price at which Securities of that series are to be redeemed, and shall state that payment of the
redemption price of such Securities to be redeemed will be made at the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, that from and after said date interest will cease to accrue and that
the redemption is for a sinking fund, if such is the case. If less than all
the Securities of a series are to be redeemed, the notice to the holders of Securities of that
series to be redeemed in part shall specify the particular Securities to be so redeemed.
14
In case any Security is to be redeemed in part only, the notice that relates to such Security
shall state the portion of the principal amount thereof to be redeemed, and shall state that on and
after the redemption date, upon surrender of such Security, a new Security or Securities of such
series in principal amount equal to the unredeemed portion thereof will be issued.
(b) If less than all the Securities of a series are to be redeemed, the Company shall give the
Trustee at least 45 days notice (unless a shorter notice shall be satisfactory to the Trustee) in
advance of the date fixed for redemption as to the aggregate principal amount of Securities of the
series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it
shall deem appropriate and fair in its discretion and that may provide for the selection of a
portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof)
of the principal amount of such Securities of a denomination larger than $1,000, the Securities to
be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the
Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so elect,
by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any paying
agent to call all or any part of the Securities of a particular series for redemption and to give
notice of redemption in the manner set forth in this Section, such notice to be in the name of the
Company or its own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying agent, the Company
shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Security Register, transfer books or other records, or suitable
copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this Section.
Section 3.3 Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been completed as above provided, the
Securities or portions of Securities of the series to be redeemed specified in such notice shall
become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption and interest on
such Securities or portions of Securities shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such redemption price and accrued
interest with respect to any such Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the place of payment specified in the
notice, said Securities shall be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed for redemption (but if the date
fixed for redemption is an interest payment date, the interest installment payable on such date
shall be payable to the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Security of such series that is to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the expense of the
Company, a new Security of the same series of authorized denominations in principal amount
equal to the unredeemed portion of the Security so presented.
15
Section 3.4 Sinking Fund.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the
retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01
for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a mandatory sinking fund payment, and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an optional sinking fund payment. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
Section 3.5 Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit
Securities of a series that 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 3.6 Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any series of Securities
(unless a shorter period shall be satisfactory to the Trustee), 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 the series, the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the
basis for such credit and will, together with such Officers Certificate, deliver to the Trustee
any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.02 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 3.02. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.
ARTICLE 4
COVENANTS
Section 4.1 Payment of Principal, Premium and Interest.
16
The Company will duly and punctually pay or cause to be paid the principal of (and premium, if
any) and interest on the Securities of that series at the time and place and in the manner provided
herein and established with respect to such Securities. Payments of principal on the Securities may
be made at the time provided herein and established with respect to such Securities by U.S. dollar
check drawn on and mailed to the address of the Securityholder entitled thereto as such address
shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account (such
wire transfer to be made only to a Securityholder of an aggregate principal amount of Securities of
the applicable series in excess of U.S. $2,000,000 and only if such Securityholder shall have
furnished wire instructions to the Trustee no later than 15 days prior to the relevant payment
date). Payments of interest on the Securities may be made at the time provided herein and
established with respect to such Securities by U.S. dollar check mailed to the address of the
Securityholder entitled thereto as such address shall appear in the Security Register, or U.S.
dollar wire transfer to, a U.S. dollar account (such a wire transfer to be made only to a
Securityholder of an aggregate principal amount of Securities of the applicable series in excess of
U.S. $2,000,000 and only if such Securityholder shall have furnished wire instructions in writing
to the Security Registrar and the Trustee no later than 15 days prior to the relevant payment
date).
Section 4.2 Maintenance of Office or Agency.
So long as any series of the Securities remain Outstanding, the Company agrees to maintain an
office or agency in the Borough of Manhattan, the City and State of New York, with respect to each
such series and at such other location or locations as may be designated as provided in this
Section 4.02, where (i) Securities of that series may be presented for payment, (ii) Securities of
that series may be presented as herein above authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the Securities of that series
and this Indenture may be given or served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by any officer authorized to sign an
Officers Certificate and delivered to the Trustee, designate some other office or agency for such
purposes or any of them. If at any time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such presentations, notices and
demands. The Company initially appoints the Corporate Trust Office of the Trustee located in the
Borough of Manhattan, the City of New York as its paying agent with respect to the Securities.
Section 4.3 Paying Agents.
(a) If the Company shall appoint one or more paying agents for all or any series of the
Securities, other than the Trustee, the Company will cause each such paying agent to
execute and deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section:
(1) that it will hold all sums held by it as such agent for the payment of the principal of
(and premium, if any) or interest on the Securities of that series (whether such
17
sums have been
paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the Company (or by any other
obligor of such Securities) to make any payment of the principal of (and premium, if any) or
interest on the Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any failure referred to in the
preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to any series of the
Securities, it will on or before each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or
any failure (by it or any other obligor on such Securities) to take such action. 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 premium, if any) or interest on any Securities of that series,
deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) 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 this action or failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums
in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) 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 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 terms and conditions as those upon which such sums were held by the Company or such paying
agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to such money.
Section 4.4 Appointment to Fill Vacancy in Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 4.5 Compliance with Consolidation Provisions.
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The Company will not, while any of the Securities remain Outstanding, consolidate with or
merge into any other Person, in either case where the Company is not the survivor of such
transaction, or sell or convey all or substantially all of its property to any other Person unless
the provisions of Article Ten hereof are complied with.
ARTICLE 5
SECURITYHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE
Section 5.1 Company to Furnish Trustee Names and Addresses of Securityholders.
The Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each
regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Securities as of such regular
record date, provided that the Company shall not be obligated to furnish or cause to furnish such
list at any time that the list shall not differ in any respect from the most recent list furnished
to the Trustee by the Company and (b) 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; provided,
however, that, in either case, no such list need be furnished for any series for which the Trustee
shall be the Security Registrar.
Section 5.2 Preservation Of Information; Communications With Securityholders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Securities contained in the most recent
list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt
of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act
with other Securityholders with respect to their rights under this Indenture or under the
Securities, and, in connection with any such communications, the Trustee shall satisfy its
obligations under Section 312(b) of the Trust Indenture Act in accordance with the provisions of
Section 312(b) of the Trust Indenture Act.
Section 5.3 Reports by the Company.
The Company covenants and agrees to provide a copy to the Trustee, after the Company files the
same with the Securities and Exchange Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of the foregoing as the
Securities and Exchange Commission may from time to time by rules and regulations prescribe) that
the Company files with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; provided, however, the Company shall not be
19
required to deliver to the
Trustee any materials for which the Company has sought and received confidential treatment by the
Securities and Exchange Commission.
Section 5.4 Reports by the Trustee.
(a) If required by Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60)
days after each May 1, shall transmit by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register, a brief report dated as of such May
1, which complies with Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission to Securityholders, be
filed by the Trustee with the Company, with each securities exchange upon which any Securities are
listed (if so listed) and also with the Securities and Exchange Commission. The Company agrees to
notify the Trustee when any Securities become listed on any securities exchange.
ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT
Section 6.1 Events of Default.
(a) Whenever used herein with respect to Securities of a particular series, Event of Default
means any one or more of the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any installment of interest upon any of the
Securities of that series, as and when the same shall become due and payable, and such default
continues for a period of 90 days; provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any indenture supplemental hereto shall not
constitute a default in the payment of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or premium, if any, on) any of
the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking
or analogous fund established with respect to that series; provided, however, that a valid
extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;
(3) the Company fails to observe or perform any other of its covenants or agreements with
respect to that series contained in this Indenture or otherwise established with respect to that
series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has
been expressly included in this Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days after the date on which written
20
notice
of such failure, requiring the same to be remedied and stating that such notice is a Notice of
Default hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the
Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a
voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for
relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all
or substantially all of its property or (iii) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days.
(b) In each and every such case (other than an Event of Default specified in clause (4) or
clause (5) above), unless the principal of all the Securities of that series shall have already
become due and payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by such Securityholders), may declare the principal of
(and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to
be due and payable immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above
occurs, the principal of and accrued and unpaid interest on all the Securities of that series shall
automatically be immediately due and payable without any declaration or other act on the part of
the Trustee or the holders of the Securities.
(c) At any time after the principal of (and premium, if any, on) and accrued and unpaid
interest on the Securities of that series shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of
that series then Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited
with the Trustee a sum sufficient to pay all matured installments of interest upon all the
Securities of that series and the principal of (and premium, if any, on) any and all Securities of
that series that shall have become due otherwise than by acceleration (with interest upon such
principal and premium, if any, and, to the extent that such payment is enforceable under applicable
law, upon overdue installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to the Trustee under
Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such
series, other than the nonpayment of principal on (and premium, if any, on) and
accrued and unpaid interest on Securities of that series that shall not have become due by
their terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any subsequent default or
impair any right consequent thereon.
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(d) In case the Trustee shall have proceeded to enforce any right with respect to Securities
of that series under this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case, subject to any determination in such
proceedings, the Company and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceedings had been taken.
Section 6.2 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that (i) in case it shall default in the payment of any installment
of interest on any of the Securities of a series, or in any payment required by any sinking or
analogous fund established with respect to that series as and when the same shall have become due
and payable, and such default shall have continued for a period of 90 days, or (ii) in case it
shall default in the payment of the principal of (or premium, if any, on) any of the Securities of
a series when the same shall have become due and payable, whether upon maturity of the Securities
of a series or upon redemption or upon declaration or otherwise then, upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Securities of that
series, the whole amount that then shall have been become due and payable on all such Securities
for principal (and premium, if any) or interest, or both, as the case may be, with interest upon
the overdue principal (and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law) upon overdue installments of interest at the rate per annum
expressed in the Securities of that series; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee
under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Securities of that series
and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity
out of the property of the Company or other obligor upon the Securities of that series, wherever
situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
readjustment, arrangement, composition or judicial proceedings affecting the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any
action therein that may be permitted by the court and shall (except as may be otherwise provided by
law) be entitled to file such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the
holders of Securities of such series allowed for the entire amount due and payable by the
Company under the Indenture at the date of institution of such proceedings and for any additional
amount that may become due and payable by the Company after such date, and to collect and receive
any moneys or other property payable or deliverable on any such claim, and to distribute the same
after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby authorized
22
by each of the holders of
Securities of such series to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to such Securityholders, to pay to the
Trustee any amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this Indenture, or under any of the
terms established with respect to Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.
Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding.
Section 6.3 Application of Moneys Collected.
Any moneys collected by the Trustee pursuant to this Article with respect to a particular
series of Securities shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal (or premium, if
any) or interest, upon presentation of the Securities of that series, and notation thereon of the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of reasonable costs and expenses of collection and of all amounts
payable to the Trustee under Section 7.06;
SECOND: To the payment of all indebtedness of the Company to which such series of Securities
is subordinated to the extent required by Section 7.06 and Article Fourteen;
THIRD: To the payment of the amounts then due and unpaid upon Securities of such series for
principal (and premium, if any) and interest, 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 premium, if any) and
interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company or any other Person lawfully
entitled thereto.
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Section 6.4 Limitation on Suits.
No holder of any Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the Securities of such
series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; (iv) the Trustee for 90 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v)
during such 90 day period, the holders of a majority in principal amount of the Securities of that
series do not give the Trustee a direction inconsistent with the request.
Notwithstanding anything contained herein to the contrary or any other provisions of this
Indenture, the right of any holder of any Security to receive payment of the principal of (and
premium, if any) and interest on such Security, as therein provided, on or after the respective due
dates expressed in such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such respective dates or
redemption date, shall not be impaired or affected without the consent of such holder and by
accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Security of such series with every other such taker and holder and the Trustee,
that no one or more holders of Securities of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and common benefit of all holders
of Securities of such series. For the protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Section 6.5 Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07, all powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04,
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every power and remedy given
by this Article or by law to the Trustee or the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Securityholders.
Section 6.6 Control by Securityholders.
The holders of a majority in aggregate principal amount of the Securities of any series at the
time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such series; provided,
however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee in good faith shall, by a Responsible Officer or officers of the
Trustee, determine that the proceeding so directed, subject to the Trustees duties under the Trust
Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to
the Securityholders not involved in the proceeding. The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding affected thereby,
determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities
of such series waive any past default in the performance of any of the covenants contained herein
or established pursuant to Section 2.01 with respect to such series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities
otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium has been deposited with the Trustee
(in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders
of the Securities of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
Section 6.7 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Securities by such holders
acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys fees, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to
any suit instituted by any Securityholder, or group of Securityholders, holding more than 10%
in aggregate principal amount of the Outstanding Securities of any series, or to any suit
instituted by any Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the respective due dates
expressed in such Security or established pursuant to this Indenture.
25
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.1 Certain Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities
of a series and after the curing of all Events of Default with respect to the Securities of that
series that may have occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this Indenture, and no
implied covenants shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a series has occurred (that has not been cured or
waived), the Trustee shall exercise with respect to Securities of that series such of the rights
and powers vested in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs.
(b) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that:
(1) prior to the occurrence of an Event of Default with respect to the Securities of a series
and after the curing or waiving of all such Events of Default with respect to that series that may
have occurred:
(A) the duties and obligations of the Trustee shall with respect to the Securities of such
series be determined solely by the express provisions of this Indenture, and the Trustee shall not
be liable with respect to the Securities of such series except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to
the Securities of such series conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Indenture with respect to the
Securities of that series; and
26
(4) None of the provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.
Section 7.2 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01:
(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, consent, order,
approval, bond, security or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company by
any authorized officer of the Company (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken
or suffered or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a series of the Securities (that has not
been cured or waived), to exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs;
(e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good
faith and believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(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, consent,
order, approval, bond, security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the Outstanding Securities of the
particular series affected thereby (determined as provided in Section 8.04); provided, however,
that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it
27
by the terms of this Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the
Company upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of
Default except (1) any Event of Default occurring pursuant to Sections 6.01(a)(1) and 6.01(a)(2) or
(2) any Default or Event of Default of which the Trustee shall have received written notification
in the manner set forth in this Indenture or a Responsible Officer of the Trustee shall have
obtained actual knowledge. Delivery of reports, information and documents to the Trustee under
Section 5.03 is for informational purposes only and the information and the Trustees receipt of
the foregoing shall not constitute constructive notice of any information contained therein, or
determinable from information contained therein including the Companys compliance with any of
their covenants thereunder (as to which the Trustee is entitled to rely exclusively on an Officers
Certificate).
Section 7.3 Trustee Not Responsible for Recitals or Issuance or Securities.
(a) The recitals contained herein and in the Securities shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or sufficiency of this Indenture
or of the Securities.
(c) The Trustee shall not be accountable for the use or application by the Company of any of
the Securities or of the proceeds of such Securities, or for the use or application of any moneys
paid over by the Trustee in accordance with any provision of this Indenture or established pursuant
to Section 2.01, or for the use or application of any moneys received by any paying agent other
than the Trustee.
Section 7.4 May Hold Securities.
The Trustee or any paying agent or Security Registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.
Section 7.5 Moneys Held in Trust.
Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by law. The
28
Trustee shall be under no liability for interest on any moneys received by it hereunder except
such as it may agree with the Company to pay thereon.
Section 7.6 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled
to, such reasonable compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as the Company and the Trustee may from time to
time agree in writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all Persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from its negligence or
bad faith and except as the Company and Trustee may from time to time agree in writing. The Company
also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for,
and to hold it harmless against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of defending itself
against any claim of liability in the premises.
(b) The obligations of the Company under this Section to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall
constitute indebtedness of the Company to which the Securities are subordinated. Such additional
indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the benefit of the holders
of particular Securities.
Section 7.7 Reliance on Officers Certificate.
Except as otherwise provided in Section 7.01, whenever in the administration of the provisions
of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.
Section 7.8 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
Section 7.9 Corporate Trustee Required; Eligibility.
29
There shall at all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws of the United
States of America or any state or territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Securities and Exchange Commission,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation or other Person publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation or other Person
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect specified in Section 7.10.
Section 7.10 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed may at any time resign with respect to
the Securities of one or more series by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security Register. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee with respect to
Securities of such series by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing 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 Securities of such series, or any Securityholder of that series who has been a bona fide
holder of a Security or Securities for at least six months may on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request
therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or
Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09
and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or
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(3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its
property shall be appointed or consented to, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation; then, in any such case, the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in duplicate, executed by order
of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or any Securityholder who has been a bona fide
holder of a Security or Securities for at least six months may, on behalf of that holder and all
others similarly situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Securities of any series at
the time Outstanding may at any time remove the Trustee with respect to such series by so notifying
the Trustee and the Company and may appoint a successor Trustee for such series with the consent of
the Company.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee with
respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section
7.11.
(e) Any successor trustee appointed pursuant to this Section may be appointed with respect to
the Securities of one or more series or all of such series, and at any time there shall be only one
Trustee with respect to the Securities of any particular series.
Section 7.11 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 (i)
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
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Trustee with respect to the Securities of that or those series to which the appointment of
such successor trustee relates, (ii) 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 (iii) 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 supplemental indenture shall constitute such Trustees co-trustees of the same trust, 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 that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; 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, such retiring Trustee shall with respect to
the Securities of that or those series to which the appointment of such successor trustee relates
have no further responsibility for the exercise of rights and powers or for the performance of the
duties and obligations vested in the Trustee under this Indenture, 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, to the extent contemplated by such supplemental indenture, the 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.
(e) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
Section 7.12 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 the corporate trust business of the
Trustee, including the administration of the trust created by this Indenture, shall be the
successor of the Trustee hereunder, provided that such corporation shall be qualified under the
provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the
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execution or filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. 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 7.13 Preferential Collection of Claims Against the Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent included therein.
Section 7.14 Notice of Default.
If any Default or any Event of Default occurs and is continuing and if such Default or Event
of Default is known to a Responsible Officer of the Trustee, the Trustee shall mail to each
Securityholder in the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act notice of the Default or Event of Default within 45 days after it occurs, unless such Default
or Event of Default has been cured; provided, however , that, except in the case of a default in
the payment of the principal of (or premium, if any) or interest on any Security, the Trustee shall
be protected in withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interest of the Securityholders.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.1 Evidence of Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Securities of a particular series may take any
action (including the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of
that series in person or by agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any series any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall have no obligation to do so. If such
a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be Securityholders for the purposes
of determining whether Securityholders of the requisite proportion of Outstanding
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Securities of that series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Securities of that series shall be computed as of the record date; provided, however,
that no such authorization, agreement or consent by such Securityholders on the record date shall
be deemed effective unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
Section 8.2 Proof of Execution by Securityholders.
Subject to the provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any instrument may be proved in
any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security Register of such Securities or
by a certificate of the Security Registrar thereof.
The Trustee may require such additional proof of any matter referred to in this Section as it
shall deem necessary.
Section 8.3 Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of any Security, the Company, the
Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name
such Security shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to the contrary.
Section 8.4 Certain Securities Owned by Company Disregarded.
In determining whether the holders of the requisite aggregate principal amount of Securities
of a particular series have concurred in any direction, consent or waiver under this Indenture, the
Securities of that series that are owned by the Company or any other obligor on the Securities of
that series or by any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgees right so to act with respect
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to such Securities and that the pledgee is not a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.
Section 8.5 Actions Binding on Future Securityholders.
At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of the majority or percentage in aggregate
principal amount of the Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Security. Except as aforesaid any such action taken by the holder of
any Security shall be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto
is made upon such Security. Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the Trustee and the
holders of all the Securities of that series.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures Without the Consent of Securityholders.
In addition to any supplemental indenture otherwise authorized by this Indenture, the Company
and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in addition to or in place of certificated
Securities;
(d) to add to the covenants, restrictions, conditions or provisions relating to the Company
for the benefit of the holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the benefit of less than all series of
Securities, stating that such covenants, restrictions, conditions or provisions are expressly being
included solely for the benefit of such series), to make the occurrence, or the occurrence and the
continuance, of a default in any such additional covenants, restrictions, conditions or provisions
an Event of Default, or to surrender any right or power herein conferred upon the Company;
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(e) to add to, delete from, or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as
herein set forth;
(f) to make any change that does not adversely affect the rights of any Securityholder in any
material respect;
(g) to provide for the issuance of and establish the form and terms and conditions of the
Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to
add to the rights of the holders of any series of Securities;
(h) to evidence and provide for the acceptance of appointment hereunder by a successor
trustee; or
(i) to comply with any requirements of the Securities and Exchange Commission or any successor
in connection with the qualification of this Indenture under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustees own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section may be executed by the
Company and the Trustee without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.
Section 9.2 Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Section 8.01) of the holders of not less than a
majority in aggregate principal amount of the Securities of each series affected by such
supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a
Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of
such series under this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and affected thereby, (a)
extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture.
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It shall not be necessary for the consent of the Securityholders of any series affected
thereby under this Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Section 9.3 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the provisions of this Article or
of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders
of Securities of the series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.4 Securities Affected by Supplemental Indentures.
Securities of any series affected by a supplemental indenture, authenticated and delivered
after the execution of such supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, may bear a notation in form approved by the Company, provided such form meets the
requirements of any securities exchange upon which such series may be listed, as to any matter
provided for in such supplemental indenture. If the Company shall so determine, new Securities of
that series so modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the Securities of that series
then Outstanding.
Section 9.5 Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by its Board Resolutions authorizing the
execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join
with the Company in the execution of such supplemental indenture unless such supplemental indenture
affects the Trustees own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, may receive an Officers
Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms to, the terms of this
Article and that it is proper for the Trustee under the provisions of this Article to join in the
execution thereof; provided, however, that such Officers Certificate or Opinion of Counsel need
not be provided in connection with the execution of a supplemental indenture that establishes the
terms of a series of Securities pursuant to Section 2.01 hereof.
Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to
the Securityholders of all series affected thereby as their names and addresses
37
appear upon the Security Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE 10
SUCCESSOR ENTITY
Section 10.1 Company May Consolidate, Etc.
Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in
an Officers Certificate, or established in one or more indentures supplemental to this Indenture,
nothing contained in this Indenture shall prevent any consolidation or merger of the Company with
or into any other Person (whether or not affiliated with the Company) or successive consolidations
or mergers in which the Company or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or
its successor or successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or its successor or successors) authorized
to acquire and operate the same; provided, however, (a) the Company hereby covenants and agrees
that, upon any such consolidation or merger (in each case, if the Company is not the survivor of
such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of
the principal of (premium, if any) and interest on all of the Securities of all series in
accordance with the terms of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture with respect to
each series or established with respect to such series pursuant to Section 2.01 to be kept or
performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform
to the provisions of the Trust Indenture Act, as then in effect) reasonably satisfactory in form to
the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or
into which the Company shall have been merged, or by the entity which shall have acquired such
property and (b) in the event that the Securities of any series then Outstanding are convertible
into or exchangeable for shares of common stock or other securities of the Company, such entity
shall, by such supplemental indenture, make provision so that the Securityholders of Securities of
that series shall thereafter be entitled to receive upon conversion or exchange of such Securities
the number of securities or property to which a holder of the number of shares of common stock or
other securities of the Company deliverable upon conversion or exchange of those Securities would
have been entitled had such conversion or exchange occurred immediately prior to such
consolidation, merger, sale, conveyance, transfer or other disposition.
Section 10.2 Successor Entity Substituted.
(a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
and upon the assumption by the successor entity by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section
10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to
and be substituted for the Company with the same effect as if it had been named as the Company
herein, and thereupon the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities.
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(b) In case of any such consolidation, merger, sale, conveyance, transfer or other
disposition, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
(c) Nothing contained in this Article shall require any action by the Company in the case of a
consolidation or merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).
Section 10.3 Evidence of Consolidation, Etc. to Trustee.
The Trustee, subject to the provisions of Section 7.01, may receive an Officers Certificate
or an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply with the provisions of
this Article.
ARTICLE 11
SATISFACTION AND DISCHARGE
Section 11.1 Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the Trustee for cancellation all
Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation
(other than any Securities that shall have been destroyed, lost or stolen and that shall have been
replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated and held in trust by the Company
and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05);
or (b) all such Securities of a particular series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations
or 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 at
maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder with respect to such series by the
Company then this Indenture shall thereupon cease to be of further effect with respect to such
series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that
shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06
and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.
Section 11.2 Discharge of Obligations.
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If at any time all such Securities of a particular series not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as described in Section 11.01
shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption
all such Securities of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company with respect to such series, then
after the date such moneys or Governmental Obligations, as the case may be, are deposited with the
Trustee the obligations of the Company under this Indenture with respect to such series shall cease
to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03,
7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.
Thereafter, Sections 7.06 and 11.05 shall survive.
Section 11.3 Deposited
Moneys to be Held in Trust.
All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.02 shall be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.
Section 11.4 Payment of Moneys Held by Paying Agents.
In connection with the satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand
of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.
Section 11.5 Repayment to Company.
Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then
held by the Company, in trust for payment of principal of or premium, if any, or interest on the
Securities of a particular series that are not applied but remain unclaimed by the holders of such
Securities for at least two years after the date upon which the principal of (and premium, if any)
or interest on such Securities shall have respectively become due and payable, or such other
shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be
repaid to the Company on May 31 of each year or upon the Companys request or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general
creditor, look only to the Company for the payment thereof.
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ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
Section 12.1 No Recourse.
No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any
Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such, of the Company or
of any predecessor or successor corporation, either directly or through the Company or any such
predecessor or successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood
that this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such incorporator, stockholder,
officer or director as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issuance of such
Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
Section 13.1 Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in this Indenture made by or on
behalf of the Company shall bind its successors and assigns, whether so expressed or not.
Section 13.2 Actions by Successor.
Any act or proceeding by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be done and performed
with like force and effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful successor of the Company.
Section 13.3 Surrender of Company Powers.
The Company by instrument in writing executed by authority of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon
such power so surrendered shall terminate both as to the Company and as to any successor
corporation.
41
Section 13.4 Notices.
Except as otherwise expressly provided herein, any notice, request or demand that by any
provision of this Indenture is required or permitted to be given, made or served by the Trustee or
by the holders of Securities or by any other Person pursuant to this Indenture to or on the Company
may be given or served by being deposited in first class mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Trustee), as follows: PFSweb, Inc., 500
North Central Expressway, Plano, TX 75074, Att: Chief Financial Officer. Any notice, election,
request or demand by the Company or any Securityholder or by any other Person pursuant to this
Indenture to or upon the Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the Corporate Trust Office of the Trustee.
Section 13.5 Governing Law.
This Indenture and each Security shall be deemed to be a contract made under the internal laws
of the State of New York, and for all purposes shall be construed in accordance with the laws of
said State, except to the extent that the Trust Indenture Act is applicable.
Section 13.6 Treatment of Securities as Debt.
It is intended that the Securities will be treated as indebtedness and not as equity for
federal income tax purposes. The provisions of this Indenture shall be interpreted to further this
intention.
Section 13.7 Certificates and Opinions as to Conditions Precedent.
(a) Upon any application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers
Certificate stating that all conditions precedent provided for in this Indenture (other than the
certificate to be delivered pursuant to Section 13.12) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no additional certificate or
opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee
with respect to compliance with a condition or covenant in this Indenture shall include (i) a
statement that the Person making such certificate or opinion has read such covenant or condition;
(ii) 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; (iii) a statement
that, in the opinion of such Person, he has made such examination or investigation as is reasonably
necessary to enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 13.8 Payments on Business Days.
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Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in
an Officers Certificate, or established in one or more indentures supplemental to this Indenture,
in any case where the date of maturity of interest or principal of any Security or the date of
redemption of any Security shall not be a Business Day, then payment of interest or principal (and
premium, if any) may be made on the next succeeding Business Day with the same force and effect as
if made on the nominal date of maturity or redemption, and no interest shall accrue for the period
after such nominal date.
Section 13.9 Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
Section 13.10 Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same instrument.
Section 13.11 Separability.
In case any one or more of the provisions contained in this Indenture or in the Securities of
any series shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 13.12 Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year
during which any Securities of any series were outstanding, an officers certificate stating
whether or not the signers know of any Default or Event of Default that occurred during such fiscal
year. Such certificate shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer of the Company that a review has been
conducted of the activities of the Company and the Companys performance under this Indenture and
that the Company has complied with all conditions and covenants under this Indenture. For purposes
of this Section 13.12, such compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If the officer of the Company signing such
certificate has knowledge of such a Default or Event of Default, the certificate shall describe any
such Default or Event of Default and its status.
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ARTICLE 14
SUBORDINATION OF SECURITIES
Section 14.1 Subordination Terms.
The payment by the Company of the principal of, premium, if any, and interest on any series of
securities issued hereunder shall be subordinated to the extent set forth in an indenture
supplemental hereto relating to such Securities.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as
of the day and year first above written.
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PFSweb, Inc.
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By: |
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Name: |
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Title: |
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[TRUSTEE], as Trustee
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By: |
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Name: |
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Title: |
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[SIGNATURE PAGE TO SUBORDINATED DEBT SECURITIES]
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CROSS-REFERENCE TABLE (1)
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Section of Trust Indenture
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Section of Indenture
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Act of 1939, as Amended |
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310(a)
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7.09 |
310(b)
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7.08 |
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7.10 |
310(c)
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Inapplicable
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311(a)
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7.13 |
311(b)
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7.13 |
311(c)
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Inapplicable
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312(a)
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5.01 |
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5.02(a) |
312(b)
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5.02(c) |
312(c)
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5.02(c) |
313(a)
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5.04(a) |
313(b)
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5.04(b) |
313(c)
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5.04(a) |
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5.04(b) |
313(d)
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5.04(c) |
314(a)
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5.03 |
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13.12 |
314(b)
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Inapplicable
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314(c)
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13.07(a) |
314(d)
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Inapplicable
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314(e)
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13.07(b) |
314(f)
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Inapplicable
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315(a)
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7.01(a) |
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7.01(b) |
315(b)
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7.14 |
315(c)
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7.01 |
315(d)
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7.01(b) |
315(e)
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6.07 |
316(a)
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6.06 |
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8.04 |
316(b)
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6.04 |
316(c)
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8.01 |
317(a)
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6.02 |
317(b)
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4.03 |
318(a)
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13.09 |
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(1) |
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This Cross-Reference Table does not constitute part of the Indenture and shall not have any
bearing on the interpretation of any of its terms or provisions. |
46
exv5w1
EXHIBIT 5.1
WOLFF & SAMSON PC
One Boland Drive
West Orange, New Jersey 07052
(973) 325-1500
February 18, 2010
PFSweb, Inc.
500 North Central Expressway
Plano, TX 75074
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Re: PFSweb, Inc. Registration Statement on Form S-3 (SEC No. 333- ) |
Gentlemen:
We have acted as counsel to PFSweb, Inc., a Delaware corporation (the Company) in connection
with the above-referenced registration statement on Form S-3 (the Registration Statement), filed
with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the
Act), relating to the proposed public offering of up to $30,000,000 in aggregate amount of (i)
its debt securities (Debt Securities), (ii) shares of its Common Stock, par value $.001 per share
(the Common Stock), (iii) shares of Preferred Stock, par value $1.00 per share (the Preferred
Stock) (iv) warrants (the Warrants) to purchase Common Stock, Preferred Stock and/or Debt
Securities, and (v) units (the Units) consisting of Common Stock, Preferred Stock, Warrants
and/or Debt Securities (collectively, the Securities), all of which Securities may be sold by the
Company from time to time as set forth in the prospectus which forms a part of the Registration
Statement (the Prospectus), and as to be set forth in one or more supplements to the Prospectus
(each, a Prospectus Supplement).
In arriving at the opinions expressed below, we have examined and relied, to the extent we
deemed proper, on certificates of officers of the Company as to factual matters, and on originals
or copies certified or otherwise identified to our satisfaction, of all such corporate records of
the Company and such other instruments and certificates of public officials and other persons as we
have deemed appropriate. In our examination, we have assumed the authenticity of all documents
submitted to us as originals, the conformity to the original documents of all documents submitted
to us as copies, the genuineness of all signatures on documents reviewed by us and the legal
capacity of natural persons.
We have also assumed that (i) that the issuance, sale, amount and terms of the Securities to
be offered from time to time will be duly authorized and determined by proper action of the Board
of Directors of the Company consistent with the procedures and terms described in the Registration
Statement and the applicable Prospectus Supplement (each, a Board Action) and in accordance with
the Companys Amended and Restated Certificate of Incorporation (the Certificate), and Bylaws, as
amended, and applicable Delaware law, (ii) the Registration Statement and any amendments thereto
(including post-effective amendments) are effective under the Act, (iii) all Securities will be
issued and sold in compliance with applicable federal and state securities laws and in the manner
stated in the Registration Statement and the applicable Prospectus Supplement, (iv) a Prospectus
Supplement will have been filed with the Securities and Exchange Commission describing the
Securities offered thereby, (v) a definitive purchase, underwriting or similar agreement with
respect to any Securities offered will have been duly authorized and validly executed and delivered
by the Company and the other parties thereto, (vi) any securities issuable upon conversion,
exchange, redemption or exercise of any Securities being offered will be duly authorized, created
and, if appropriate, reserved for issuance upon such conversion, exchange, redemption or exercise,
(vii) with respect to shares of Common Stock or Preferred Stock offered, there will be sufficient
shares of Common Stock or Preferred Stock authorized under the Companys Certificate and not
otherwise reserved for issuance and (viii) the Securities as executed and delivered do not result
in a default under or breach of any agreement or instrument binding upon the Company.
Based upon, subject to and limited by the foregoing, we are of the opinion that, as of the
date hereof:
1. When the indentures governing the Debt Securities has been duly executed on behalf of the
Company and the trustee thereunder (the Trustee), and when the Debt Securities have been (a) duly
established by the
indentures or any supplemental indentures thereto, (b) duly authorized and
established by applicable Board Action
and duly authenticated by the Trustee, and (c) duly executed and delivered on behalf of the
Company against payment therefor in accordance with the terms of such Board Action, any applicable
underwriting agreement, the indentures and any applicable supplemental indentures, and as
contemplated by the Registration Statement and/or the applicable Prospectus Supplement, the Debt
Securities will constitute binding obligations of the Company, enforceable in accordance with their
terms, except that the enforceability thereof may be limited by or subject to bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other similar laws now or
hereafter existing which affect the rights and remedies of creditors generally and equitable
principles of general applicability.
2. With respect to the Common Stock, upon due authorization by Board Action of an issuance of
Common Stock, and upon issuance and delivery of the Common Stock against payment of valid
consideration therefor equal to or greater than the par value thereof in accordance with the terms of such Board Action and any applicable
underwriting or purchase agreement, and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, such shares of Common Stock will be legally issued, fully paid
and non-assessable.
3. With respect to the Preferred Stock, upon due authorization by Board Action of an issuance
of a series of Preferred Stock, and upon issuance and delivery of the series of Preferred Stock
against payment of valid consideration therefor equal to or greater than the par value thereof in accordance with the terms of such Board Action
and any applicable underwriting or purchase agreement, and as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, such shares of the series of Preferred Stock
will be legally issued, fully paid and non-assessable.
4. With respect to the Warrants, when the issuance of the Warrants has been duly authorized
by Board Action and the Warrants have been duly executed and delivered against payment therefor,
pursuant to a warrant agreement or agreements duly authorized, executed and delivered by the
Company and a warrant agent and as described in the Registration Statement, any amendment thereto,
the Prospectus and any Prospectus Supplement relating thereto, the Warrants will constitute binding obligations of the Company, enforceable against the Company in accordance with their terms,
except that the enforceability thereof may be limited by or subject to bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other similar laws now or hereafter existing which
affect the rights and remedies of creditors generally and equitable principles of general
applicability..
To the extent that the obligations of the Company under the indentures governing the Debt
Securities may be dependent upon such matters, we have assumed for purposes of this opinion (i)
that the trustee is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified to engage in the activities contemplated by the
indentures governing the Debt Securities and (ii) that each of the indentures has been duly
authorized, executed and delivered by and constitutes the legal, valid and binding obligation of
the Trustee, enforceable in accordance with its terms, except that the enforceability thereof may
be limited by or subject to bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws now or hereafter existing which affect the rights and remedies of
creditors generally and equitable principles of general applicability.
We express no opinion as to the applicability of, compliance with or effect of, the law of any
jurisdiction other than United States Federal law, the laws of the State of New York and the
General Corporation Law of the State of Delaware, including the statutory provisions and also all
applicable provisions of the Delaware Constitution and reported judicial decisions interpreting
these laws.
We hereby consent to the references to our firm under the caption Legal Opinions in the
Registration Statement and any Prospectus Supplement and to the use of this opinion as an exhibit
to the Registration Statement. In giving this consent, we do not hereby admit that we come within
the category of persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Securities and Exchange Commission thereunder.
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Very truly yours,
Wolff & Samson PC
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exv23w1
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated March 31, 2009 with respect to the consolidated financial
statements and financial statement schedules of PFSweb, Inc. and subsidiaries included in the
Annual Report of PFSweb, Inc. on Form 10-K for the year ended December 31, 2008, which is
incorporated by reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report and to the use of our name as
it appears under the caption Experts.
/s/ Grant Thornton LLP
Dallas, Texas
February 18, 2010
exv23w2
Exhibit 23.2
Consent
of Independent Registered Public Accounting Firm
The Board
of Directors
PFSweb, Inc.:
We
consent to the use of our report dated March 31, 2008, except as it
relates to the reverse stock split described in note 2, as to which
the date is March 30, 2009, with respect to the consolidated balance
sheet of PFSweb, Inc. and subsidiaries as of December 31, 2007, and
the related consolidated statements of operations, shareholders
equity and comprehensive income (loss) and cash flows for each of the
years in the two-year period ended December 31, 2007, incorporated
herein by reference and to the reference to our firm under the heading
Experts in the prospectus.
(Signed)
KPMG LLP
Dallas, Texas
February 17, 2010