-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NkqZRgSk/530Eady21bAMQuES2RjIOdjj7bNxuZdDDA3TXUbg5upU7IrBU7pnELp fnci+YcZ1P7dBiONRJDm/Q== 0000950129-05-000169.txt : 20050107 0000950129-05-000169.hdr.sgml : 20050107 20050107155201 ACCESSION NUMBER: 0000950129-05-000169 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050106 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Material Modifications to Rights of Security Holders ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050107 DATE AS OF CHANGE: 20050107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL SHIPHOLDING CORP CENTRAL INDEX KEY: 0000278041 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 362989662 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10852 FILM NUMBER: 05518335 BUSINESS ADDRESS: STREET 1: 650 POYDRAS ST STE 1700 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045295470 8-K 1 h21520e8vk.txt INTERNATIONAL SHIPHOLDING CORPORATION - DATED 1/6/2005 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 6, 2005 INTERNATIONAL SHIPHOLDING CORPORATION (Exact name of registrant as specified in its charter) Delaware 2-63322 36-2989662 (State or other jurisdiction (Commission File Number) (IRS Employer Identification No.) of incorporation)
650 Poydras Street, New Orleans, Louisiana 70130 (Address of principal executive offices) (Zip Code) (504) 529-5461 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On January 6, 2005, we completed the public offering of $40.0 million of our 6.0% Convertible Exchangeable Preferred Stock pursuant to the terms of an underwriting agreement, dated December 29, 2004, by and between us and Ferris, Baker Watts, Incorporated, as underwriter. Pursuant to the underwriting agreement, the underwriter has the option, exercisable at any time on or before January 28, 2005, to purchase up to an additional $4.0 million of the preferred stock to cover over-allotments, if any. The preferred stock is governed by the terms of a certificate of designations dated, and filed with the Delaware Secretary of State on, January 5, 2005. The certificate of designations amends our restated certificate of incorporation effective January 5, 2005 and provides that the preferred stock will rank senior to our common stock with respect to dividend rights and rights upon our liquidation, winding up or dissolution. The preferred stock, which has a liquidation preference of $50 per share, will accrue cumulative cash dividends from the date of issuance at the annual rate of 6.0% of the liquidation preference of the preferred stock, payable quarterly on March 31, June 30, September 30 and December 31 of each year, beginning March 31, 2005. The preferred stock is convertible, at the option of the holder at any time, into a number of shares of our common stock determined by dividing the $50 liquidation preference of the preferred stock by the initial conversion price of $20.00 per share. The initial conversion price, which is subject to adjustment upon the occurrence of certain events, represents an initial conversion rate of 2.50 shares of our common stock for each share of the preferred stock. The preferred stock has no maturity date and no voting rights prior to conversion into shares of our common stock, except in limited circumstances. We may elect to redeem the preferred stock, in whole or in part, for cash at any time on or after December 31, 2006, provided that prior to December 31, 2007, we may elect to redeem the preferred stock only if the closing price of our common stock exceeds 150% of the conversion price of the preferred stock for at least 20 trading days during any 30-day trading period ending within five trading days prior to notice of redemption. In addition, upon a change in control, we may elect to redeem the preferred stock, in whole but not in part, for cash and, to the extent we do not redeem all of the outstanding shares of the preferred stock pursuant to our change in control redemption option, holders of the preferred stock may, upon a change in control, require us to redeem for cash all or any part of their shares of the preferred stock at the liquidation preference of the preferred stock, plus any accrued and unpaid dividends to, but not including, the date of redemption. Holders of the preferred stock will have no other right to require us to redeem the preferred stock. At our option, we may exchange the preferred stock, in whole but not in part, on any dividend payment date beginning on March 31, 2006 and prior to December 31, 2014, for our 6.0% Convertible Subordinated Notes due 2014. If we elect to exchange the preferred stock for the notes, the exchange rate will be $50 principal amount of the notes for each share of the preferred stock. The notes, if issued, will (i) mature on December 31, 2014, (ii) have no voting rights prior to conversion into shares of our common stock, (iii) have terms substantially similar to those of the preferred stock and (iv) be governed by the terms of an indenture, dated January 6, 2005, by and between us and The Bank of New York, as trustee. Copies of the underwriting agreement, the certificate of designations governing the preferred stock and the indenture governing the notes are attached hereto as exhibits and are incorporated herein by reference in their entirety (see exhibits 1.1, 3.1 and 4.1). On January 6, 2005, we issued a press release announcing the completion of the public offering of the preferred stock (see exhibit 99.1). ITEM 3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS. (a), (b) See Item 1.01 which is incorporated herein by reference. ITEM 5.03 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR. (a) See Item 1.01 which is incorporated herein by reference. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 1.1 Underwriting Agreement, dated December 29, 2004, by and between International Shipholding Corporation and Ferris, Baker Watts, Incorporated 3.1 Certificate of Designations of the 6.0% Convertible Exchangeable Preferred Stock of International Shipholding Corporation dated, and filed with the Delaware Secretary of State on, January 5, 2005 4.1 Indenture, dated as of January 6, 2005, by and between International Shipholding Corporation and The Bank of New York, as trustee, with respect to the 6.0% Convertible Subordinated Notes due 2014 99.1 Press release, dated January 6, 2005, titled "International Shipholding Corporation Completes Public Offering of $40.0 Million of 6% Convertible Exchangeable Preferred Stock" SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. INTERNATIONAL SHIPHOLDING CORPORATION By: /s/ Gary L. Ferguson --------------------------------------- Gary L. Ferguson Vice President and Chief Financial Officer Date: January 7, 2005 EXHIBIT INDEX 1.1 Underwriting Agreement, dated December 29, 2004, by and between International Shipholding Corporation and Ferris, Baker Watts, Incorporated 3.1 Certificate of Designations of the 6.0% Convertible Exchangeable Preferred Stock of International Shipholding Corporation dated, and filed with the Delaware Secretary of State on, January 5, 2005 4.1 Indenture, dated as of January 6, 2005, by and between International Shipholding Corporation and The Bank of New York, as trustee, with respect to the 6.0% Convertible Subordinated Notes due 2014 99.1 Press release, dated January 6, 2005, titled "International Shipholding Corporation Completes Public Offering of $40.0 Million of 6% Convertible Exchangeable Preferred Stock" EX-1.1 2 h21520exv1w1.txt UNDERWRITING AGREEMENT DATED 12/29/2004 EXHIBIT 1.1 INTERNATIONAL SHIPHOLDING CORPORATION 800,000 Shares 6.0% Convertible Exchangeable Preferred Stock ($1.00 par value per share) UNDERWRITING AGREEMENT December 29, 2004 Ferris, Baker Watts, Incorporated 100 Light Street Baltimore, MD 21202 Ladies and Gentlemen: International Shipholding Corporation, a Delaware corporation (the "Company"), proposes to issue and sell to Ferris, Baker Watts, Incorporated ("you" or the "Underwriter") an aggregate of 800,000 shares (the "Firm Shares") of 6.0% Convertible Exchangeable Preferred Stock, $1.00 par value per share (the "Preferred Stock"), of the Company, which Preferred Stock, at the Company's option and subject to certain conditions, is exchangeable for the Company's 6.0% Convertible Subordinated Notes due 2014 (the "Notes") issuable pursuant to an indenture (the "Indenture") between the Company and The Bank of New York, as trustee (the "Trustee") to be dated as of the time of purchase (as defined below). The Preferred Stock is, and the Notes, when and if issued, will be, convertible into shares (the "Conversion Shares") of the Company's Common Stock, $1.00 par value per share (the "Common Stock"). Solely for the purpose of covering over-allotments, the Company proposes to grant to the Underwriter the option to purchase from the Company up to an additional 80,000 shares of the Preferred Stock (the "Additional Shares"). The Firm Shares and the Additional Shares are hereinafter collectively sometimes referred to as the "Shares." The Shares, the Notes and the Conversion Shares (collectively, the "Securities") are described in the Prospectus referred to below. The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the "Act"), with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-1 (File No. 333-120161), including a prospectus, relating to the Securities. The Company has furnished to you, for use by you and by dealers, copies of one or more preliminary prospectuses (each such preliminary prospectus being herein called a "Preliminary Prospectus") relating to the Securities. Except where the context otherwise requires, the registration statement, as amended when it became or becomes effective, including all documents filed as a part thereof, and including any information contained in a prospectus subsequently filed with the Commission pursuant to Rule 424(b) under the Act and deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Act and also including any registration statement filed pursuant to Rule 462(b) under the Act, is herein called the "Registration Statement," and the prospectus in the form filed by the Company with the Commission pursuant to Rule 424(b) under the Act on or before the second business day after the date hereof (or such earlier time as may be required under the Act), or, if no such filing is required, the form of final prospectus included in the Registration Statement at the time it became effective, is herein called the "Prospectus." As used herein, "business day" shall mean a day on which the New York Stock Exchange is open for trading. The Company has filed, in accordance with Section 12 of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the "Exchange Act"), a registration statement (as may be amended prior to the time of execution of this Agreement, the "Exchange Act Registration Statement") on Form 8-A under the Exchange Act to register, under Section 12(b) of the Exchange Act, the Preferred Stock. As used in this Agreement, the term "knowledge" with respect to any entity means to the knowledge of any director or officer of such entity after due inquiry. The Company and the Underwriter agree as follows: 1. Sale and Purchase. Upon the basis of the representations and warranties and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Underwriter and the Underwriter agrees to purchase from the Company the Firm Shares in each case at a purchase price of $48.25 per share. The Company is advised by you that you intend (i) to make a public offering of the Firm Shares as soon after the effective date of the Registration Statement as in your reasonable judgment is advisable and (ii) initially to offer the Firm Shares upon the terms set forth in the Prospectus. You may from time to time increase or decrease the public offering price after the initial public offering to such extent as you may determine. In addition to the underwriting discount set forth in the Prospectus the Company shall pay to the Underwriter a financial advisory fee equal to the greater of $600,000 or 1.5% of the aggregate public offering price of all Firm Shares purchased. In addition, the Company hereby grants to the Underwriter the option to purchase, and upon the basis of the representations and warranties and subject to the terms and conditions herein set forth, the Underwriter shall have the right to purchase, all or a portion of the Additional Shares as may be necessary to cover over-allotments made in connection with the offering of the Firm Shares, at the same purchase price per share to be paid by the Underwriter to the Company for the Firm Shares. In addition, the Company shall pay to the Underwriter a financial advisory fee equal to the greater of $60,000 or 1.5% of the aggregate public offering price of all Additional Shares purchased. This option may be exercised by the Underwriter at any time and from time to time on or before the thirtieth day following the date of the Prospectus, by written notice to the Company. Such notice shall set forth the aggregate number of Additional Shares as to which the option is being exercised and the date and time when the Additional Shares are to be delivered (such date and time being herein referred to as the "additional time of purchase"); provided, however, that the additional time of purchase 2 shall not be earlier than the time of purchase (as defined below) nor earlier than the second business day after the date on which the option shall have been exercised nor later than the tenth business day after the date on which the option shall have been exercised. 2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be made to the Company by wire transfer of immediately available funds to the account(s) specified by the Company against delivery of the Firm Shares to you through the facilities of The Depository Trust Company ("DTC") for the account of the Underwriter. Such payment and delivery shall be made at 9:00 A.M., New York City time, on January 6, 2005 (unless another time shall be agreed to by you and the Company). The time at which such payment and delivery are to be made is hereinafter sometimes called "the time of purchase." Electronic transfer of the Firm Shares shall be made to you at the time of purchase in such names and in such denominations as you shall specify. Payment of the purchase price for the Additional Shares shall be made at the additional time of purchase in the same manner and at the same office as the payment for the Firm Shares (unless otherwise agreed to by you and the Company). Electronic transfer of the Additional Shares shall be made to you at the additional time of purchase in such names and in such denominations as you shall specify. Deliveries of the documents described in Section 6 hereof with respect to the purchase of the Shares shall be made at the offices of Venable LLP at 2 Hopkins Plaza, Baltimore, Maryland 21201, at 9:00 A.M., New York City time, on the date of the closing of the purchase of the Firm Shares or the Additional Shares, as the case may be. 3. Representations, Warranties and Covenants of the Company. The Company represents and warrants to and agrees with the Underwriter that: (a) the Registration Statement has been declared effective under the Act; no stop order of the Commission preventing or suspending the use of any Preliminary Prospectus or the effectiveness of the Registration Statement has been issued and no proceedings for such purpose have been instituted or, to the Company's knowledge after due inquiry, are contemplated by the Commission; each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the requirements of the Act, and the last Preliminary Prospectus distributed in connection with the offering of the Shares did not, as of its date, and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; the Registration Statement complied when it became effective, complies and, at the time of purchase and any additional time of purchase and any time at which any sales with respect to which the Prospectus is delivered, will comply with the requirements of the Act, and the Prospectus will comply, as of its date and at the time of purchase and any additional times of purchase and any time at which any sales with respect to which the Prospectus is delivered, with the requirements of 3 the Act; any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been and will be so described or filed; the conditions to the use of Form S-1 have been satisfied; the Registration Statement did not when it became effective, does not and, at the time of purchase and any additional time of purchase and any time at which any sales with respect to which the Prospectus is delivered, will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus will not, as of its date and at the time of purchase and any additional time of purchase and any time at which any sales with respect to which the Prospectus is delivered, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no warranty or representation with respect to any statement contained in the last Preliminary Prospectus, the Registration Statement or the Prospectus in reliance upon and in conformity with information concerning an Underwriter and furnished in writing by or on behalf of such Underwriter through you to the Company expressly for use in the last Preliminary Prospectus, the Registration Statement or the Prospectus; the Exchange Act Registration Statement has become effective as provided in Section 12 of the Exchange Act; and the Company has not distributed and will not distribute any "prospectus" (within the meaning of the Act) or offering material in connection with the offering or sale of the Shares other than the Registration Statement, the then most recent Preliminary Prospectus and the Prospectus; (b) each of the Company and each of the subsidiaries listed on Exhibit 21.1 to the Registration Statement (the "Subsidiaries") has been duly organized and is validly existing and in good standing under the laws of its respective jurisdiction of organization with authority and power, corporate or otherwise, to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus and, with respect to the Company, to: (i) execute and deliver this Agreement and to issue, sell and deliver the Shares as contemplated herein, (ii) execute, issue and deliver the Indenture and the Notes and perform its obligations thereunder, and (iii) issue and deliver the Conversion Shares in accordance with the terms of the Certificate of Designations of the 6.0% Convertible Exchangeable Preferred Stock of the Company in the form filed as an exhibit to the Registration Statement (the "Certificate of Designations") or the Indenture, as the case may be; each of the Company and the Subsidiaries is duly qualified as a foreign entity to transact business in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property and assets or the conduct of business or otherwise, except where the failure to so qualify would not have a material adverse effect on the condition (financial or otherwise), results of operations, business, properties, assets or business prospects of the Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"); 4 (c) as of the date of this Agreement, the Company has an authorized and outstanding capitalization as set forth in the sections of the Registration Statement and the Prospectus entitled "Capitalization" and "Description of Common Stock," and, as of the time of purchase and the additional time of purchase, as the case may be, the Company shall have an authorized and outstanding capitalization as set forth in the sections of the Registration Statement and the Prospectus entitled "Capitalization," "Description of the Preferred Stock" and "Description of Common Stock" (subject, in each case, to the issuance of shares of Common Stock upon exercise of stock options disclosed as outstanding in the Registration Statement and the Prospectus and the grant of options under the Company's Stock Incentive Plan); all of the issued and outstanding shares of capital stock, including the Common Stock, of the Company have been duly authorized and validly issued and are fully paid and non-assessable, have been issued in compliance with all federal and state securities laws, except for any failure to comply that could not, individually or in the aggregate, have a Material Adverse Effect, and were not issued in violation of any preemptive right, right of first refusal or similar right; the Certificate of Designations has been duly authorized and approved in accordance with the Delaware General Corporation Law, will be filed with the Secretary of State of the State of Delaware on or before the time of purchase, requires no governmental or third party consent or approval prior to its becoming effective other than acceptance for recording by the Secretary of State of the State of Delaware, shall become effective and in full force and effect on or before the time of purchase and immediately subsequent to the filing of the Certificate of Designations, the Company will be duly incorporated and validly existing as a corporation in good standing under the laws of the State of Delaware; (d) all of the issued and outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable, have been issued in compliance with all federal and state securities laws, except for any failure to comply that could not, individually or in the aggregate, have a Material Adverse Effect, and were not issued in violation of any preemptive right, right of first refusal or similar right; and are owned by the Company either directly or through wholly-owned subsidiaries, free and clear of any liens, claims or encumbrances of any kind; the Company has no direct or indirect subsidiaries (as defined under the Act) other than the Subsidiaries, the Subsidiaries include the only significant subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X and, except as described in the Registration Statement and the Prospectus, the Company does not own, directly or indirectly, any shares of stock or any other equity or long-term debt securities of any corporation or have any equity interest in any firm, partnership, joint venture, association or other entity other than the Subsidiaries; (e) true, complete and correct copies of the Restated Certificate of Incorporation (the "Certificate") and the By-laws (the "Bylaws") of the Company 5 and all amendments (including, without limitation, any certificates of designations) thereto have been delivered to you, and, except for the filing and effectiveness of the Certificate of Designations, no changes therein will be made on or after the date hereof or on or before the time of purchase or, if later, the additional time of purchase; (f) the Shares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and non-assessable and free of statutory and contractual preemptive rights, rights of first refusal and similar rights; (g) the Conversion Shares have been duly authorized and reserved for issuance upon conversion of the Shares or the Notes, as the case may be, and if and when issued in accordance with the Certificate of Designations or the Indenture, as the case may be, will be duly and validly issued, fully paid and nonassessable and free of statutory and contractual preemptive rights, rights of first refusal and similar rights; (h) the Notes are in the form contemplated by the Indenture, have been duly authorized by the Company for issuance pursuant to the terms of the Indenture and, when executed by the Company and authenticated by the Trustee in the manner provided in the Indenture, will constitute valid and binding obligations of the Company, entitled to the benefits provided by the Indenture, and enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general equitable principles; (i) the capital stock of the Company, including the Shares and the Conversion Shares, conforms in all material respects to the description thereof contained in the Registration Statement and the Prospectus, and the certificates for the Shares and the Conversion Shares are in due and proper form and the holders of the Shares and the Conversion Shares will not be subject to personal liability by reason of being such holders; (j) this Agreement has been duly authorized, executed and delivered by the Company; (k) the Indenture and the Notes conform in all material respects to the descriptions thereof in the Registration Statement and the Prospectus; (l) the Indenture has been duly and validly authorized by the Company, and assuming due authorization, execution and delivery of the Indenture by the Trustee, will constitute a legally valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, 6 except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general equitable principles; the Indenture (i) has been duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and (ii) complies as to form with the requirements of the Trust Indenture Act; as of each of the time of purchase and any additional times of purchase, as applicable, no event will have occurred nor will any circumstance have arisen which, had the Notes been issued on such date, would constitute an Event of Default (as such term is defined in the Indenture); (m) neither the Company nor any of the Subsidiaries is in breach or violation of or in default under (and no event has occurred which with notice, lapse of time or both would result in any breach or violation of, constitute a default under or give the holder of any indebtedness (or a person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (A) its articles of incorporation, by-laws or other charter documents (including, with respect to the Company, the Certificate and the Bylaws) (collectively, "Organization Documents"), (B) any indenture, mortgage, deed of trust, bank loan, credit agreement, other evidence of indebtedness, license, lease, contract or other agreement or instrument to which it is a party or by which it or any of its properties may be bound or affected or (C) any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to, or of any court or other governmental or regulatory authority, agency or other body with jurisdiction over, the Company or any Subsidiary or any of their respective assets or properties, except, in the case of clauses (B) and (C), for breaches, violations, defaults and events that would not, individually or in the aggregate, have a Material Adverse Effect; (n) the execution, delivery and performance of this Agreement, the Indenture and the Notes, the consummation of the transactions contemplated by this Agreement, the Certificate of Designations, the Indenture and the Notes (collectively, the "Transaction Documents"), the execution, filing and effectiveness of the Certificate of Designations, the issuance and sale of the Shares, the issuance of the Notes in compliance with the Indenture and the issuance of the Conversion Shares in compliance with the Certificate of Designations or the Indenture, as the case may be, will not conflict with, result in any breach or violation of or constitute a default under (nor constitute an event which with notice, lapse of time or both would result in any breach or violation of or constitute a default under or give the holder of any indebtedness (or a person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (A) the Certificate, Bylaws or any Organizational Documents of the Company or any Subsidiary, (B) any indenture, mortgage, deed of trust, bank loan, credit agreement, other evidence of indebtedness, license, lease, contract or other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company, any 7 Subsidiary or any of their respective properties may be bound or affected or (C) any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to, or of any court or other governmental or regulatory authority, agency or other body with jurisdiction over, the Company or any Subsidiary or any of their respective assets or properties, except, in the case of clauses (B) and (C), for breaches, violations, defaults and events that would not, individually or in the aggregate, have a Material Adverse Effect; (o) no approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or of or with the New York Stock Exchange, Inc., or approval of the stockholders of the Company, is required in connection with the execution, delivery and performance of this Agreement, the Indenture, the issuance and sale of the Shares, the issuance of the Conversion Shares, the issuance of the Notes, or the consummation by the Company of the transactions contemplated by the Transaction Documents other than the registration of the Securities under the Act, qualification of the Indenture under the Trust Indenture Act, filing with and acceptance by the Delaware Secretary of State of the Certificate of Designations, authorization for quotation of the Preferred Stock on or with the New York Stock Exchange, each of which has been effected (except for the filing with and acceptance by the Delaware Secretary of State of the Certificate of Designations, which shall occur prior to the time of purchase), listing of the Notes on the New York Stock Exchange, the American Stock Exchange or another similar securities exchange or securities trading market and such other conditions to issuance of the Notes as are set forth in the Indenture, and any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Shares are being offered by the Underwriter or under the rules and regulations of the NASD; (p) except as expressly set forth in the Registration Statement and the Prospectus, (i) no person has the right, contractual or otherwise, to cause the Company to issue or sell to it any shares of Common Stock or shares of any other capital stock or other equity interests of the Company, (ii) no person has any preemptive rights, rights of first refusal or other rights to purchase any shares of Common Stock or shares of any other capital stock of or other equity interests in the Company, and (iii) no person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Shares, in the case of each of the foregoing clauses (i), (ii) and (iii), whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Shares as contemplated thereby or otherwise; no person has the right, contractual or otherwise, to cause the Company to register under the Act any shares of Common Stock or shares of any other capital stock of or other equity interests in the Company, or to include any such shares or interests in the Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Shares as contemplated thereby or otherwise; and, except as disclosed in the Registration 8 Statement and Prospectus, no person has the right, exercisable during the Lock-Up Period (as defined below), to cause the Company to purchase any capital stock or other security of the Company; (q) each of the Company and the Subsidiaries owns, possesses or has obtained all permits, licenses, consents, orders, approvals, franchises and authorizations of governmental or regulatory authorities and has obtained all necessary licenses, authorizations, consents and approvals from other persons, ("Permits"), as are necessary to own or lease its properties and to conduct its businesses in the manner described or contemplated in the Registration Statement and the Prospectus, except where the failure to own, possess or obtain such Permits could not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Subsidiaries has fulfilled and performed in all material respects all of its obligations with respect to such Permits and no event has occurred, or as a result of the consummation of the transactions contemplated hereby or in the Registration Statement and the Prospectus would occur, which allows, or after notice or lapse of time or both would allow, revocation or termination thereof or results or would result in any other material impairment of the rights of the holder of any such Permit; except as described in the Registration Statement and the Prospectus, none of such Permits contains any material limitation on the ability of the Company or any of the Subsidiaries to own its respective properties or to conduct its business in the manner described in the Registration Statement and the Prospectus; none of the Company or any of the Subsidiaries has any knowledge of a threatened revocation or modification relating to any such Permit; and none of the Company or any of the Subsidiaries is in violation of, or in default under, any federal, state, local or foreign law, treaty, regulation or rule or any decree, order or judgment applicable to the Company or any Subsidiary, except where such violation or default would not, individually or in the aggregate, have a Material Adverse Effect; (r) all legal or governmental proceedings, affiliate transactions, off-balance sheet transactions (including, without limitation, transactions related to, and the existence of, "variable interest entities" within the meaning of Financial Accounting Series Interpretation No. 46), contracts, licenses, agreements, leases or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement have been so described or filed as required; (s) there are no actions, suits, claims, investigations or proceedings pending or threatened or, to the Company's or any Subsidiary's knowledge, contemplated to which the Company, any of the Subsidiaries or any of their respective directors or officers is or would be a party or of which any of their respective properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, except any such action, suit, claim, investigation or proceeding which would not result in a judgment, decree or order having, 9 individually or in the aggregate, a Material Adverse Effect or preventing consummation of the transactions contemplated hereby, except as set forth in the Registration Statement and the Prospectus; (t) Ernst & Young LLP, whose report on the financial statements of the Company is included the Registration Statement and the Prospectus, are independent public accountants as required by the Act and by Rule 3600T of the Public Company Accounting Oversight Board (the "PCAOB"); (u) the financial statements included in the Registration Statement and the Prospectus, together with the related notes and schedules, present fairly the financial position of the Company and its consolidated subsidiaries on a consolidated basis as of the dates indicated and the respective results of operations and cash flows of the Company and its consolidated subsidiaries for the periods specified and have been prepared in compliance with the requirements of the Act and in conformity with generally accepted accounting principles applied on a consistent basis during the periods involved; any pro forma financial statements or data included in the Registration Statement and the Prospectus comply with the requirements of Regulation S-X of the Act, including, without limitation, Article 11 thereof, and the assumptions used in the preparation of such pro forma financial statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the transactions or circumstances described therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements and data; the other financial and statistical data set forth in the Registration Statement and the Prospectus are accurately presented and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included in the Registration Statement and the Prospectus (including, without limitation, as required by Rules 3-12 or 3-05 or Article 11 of Regulation S-X under the Act) that are not included as required; the Company and its consolidated subsidiaries do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations or any "variable interest entities" within the meaning of Financial Accounting Series Interpretation No. 46), not disclosed in the Registration Statement and the Prospectus; and all disclosures contained in the Registration Statement or the Prospectus regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable; (v) subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been (i) any material adverse change, or any development involving a prospective material adverse change, in the business, properties, management, financial condition or results of operations of the Company or any of the Subsidiaries, (ii) any transaction which is material to the Company or any of the Subsidiaries, (iii) any 10 obligation, direct or contingent (including any off-balance sheet obligations), incurred by the Company or any of the Subsidiaries, which is material to the Company, (iv) any change in the capital stock or outstanding indebtedness of the Company or any of the Subsidiaries, or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company; (w) the Company has obtained for the benefit of the Underwriter the agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A hereto, of each of its directors and executive officers; (x) neither the Company nor any of the Subsidiaries is now, nor will any of them be, after giving effect to the offering and sale of the Shares and application of the net proceeds from such offering and sale as described in the Registration Statement and the Prospectus under the heading "Use of Proceeds" and consummation of each of the transactions contemplated by the Registration Statement and the Prospectus, an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); (y) neither the Company nor any of the Subsidiaries is now, nor will any of them be, after giving effect to the offering and sale of the Shares, a "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" of a "holding company" or of a "subsidiary company," as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the "Public Utility Holding Company Act"); (z) each of the Company and the Subsidiaries has good and marketable title in fee simple to all real property and good and marketable title to all personal property (including each of the vessels listed in the Prospectus and the Registration Statement) described the Registration Statement or in the Prospectus as being owned by it, free and clear of all liens, claims, security interests or other encumbrances except for such liens, claims, security interests or other encumbrances as are described in the Registration Statement or the Prospectus or which, individually or in the aggregate, would not have or result in a Material Adverse Effect; all the property described in the Registration Statement and the Prospectus as being held under lease by the Company or any of the Subsidiaries is held thereby under valid, subsisting and enforceable leases, except where the failure to so hold could not, individually or in the aggregate, have a Material Adverse Effect; all leases, contracts and agreements to which the Company or any of the Subsidiaries is a party or by which any of them is bound are valid and enforceable against the Company or such Subsidiary, and are valid and enforceable against the other party or parties thereto and are in full force and effect with only such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect; the Company and the Subsidiaries own or possess adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights and know-how necessary to conduct the businesses now 11 or proposed to be operated by them as described in the Registration Statement and the Prospectus, except where the failure to own or possess such licenses or other rights could not, individually or in the aggregate, have a Material Adverse Effect, and none of the Company or the Subsidiaries has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how; (aa) Except for matters which would not, individually or in the aggregate, have a Material Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the Company's or any Subsidiary's knowledge after due inquiry, threatened against the Company or any Subsidiary before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is pending or threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Company's or any Subsidiary's knowledge after due inquiry, threatened against the Company or any Subsidiary and (C) no union representation dispute currently existing concerning the employees of the Company or of any Subsidiary, and (ii) to the Company's or any Subsidiary's knowledge after due inquiry, (A) no union organizing activities are currently taking place concerning the employees of the Company or any Subsidiary and (B) there has been no violation of any federal, state, local or foreign law or regulation relating to discrimination in the hiring, promotion or pay of employees, labor practices, immigration, social security, occupational safety and health, or plant closing, or of any applicable wage or hour laws, concerning the employees of the Company or any Subsidiary; the minimum funding standard under Section 302 of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder ("ERISA"), has been satisfied by each "pension plan" (as defined in Section 3(2) of ERISA) which has been established or maintained by the Company and/or one or more of the Subsidiaries, and the trust forming part of each such plan which is intended to be qualified under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"), is so qualified; each of the Company and the Subsidiaries has fulfilled its obligations, if any, under Section 515 of ERISA; neither the Company nor any of the Subsidiaries maintains or is required to contribute to a "welfare plan" (as defined in Section 3(1) of ERISA) which provides retiree or other post-employment welfare benefits or insurance coverage (other than "continuation coverage" (as defined in Section 602 of ERISA)); each pension plan and welfare plan established or maintained by the Company and/or one or more of its Subsidiaries is in compliance in all material respects with the currently applicable provisions of ERISA, and neither the Company nor any of the Subsidiaries has incurred or could reasonably be expected to incur excise tax obligations under Sections 4971 through 4980G of the Code, any penalties under section 502(c) or (l) of ERISA, any withdrawal liability under Section 4201 of ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability under Title IV of ERISA; 12 (bb) the Company, each Subsidiary and their respective properties, assets and operations are in compliance with, and hold all permits, authorizations and approvals required under, Environmental Laws (as defined below), except to the extent that failure to so comply or to hold such permits, authorizations or approvals would not, individually or in the aggregate, have a Material Adverse Effect; there has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission or other release of any Hazardous Materials (as defined below) due to, caused by or otherwise relating to the operations of the Company or any Subsidiary (or, to the knowledge of the Company or any Subsidiary, any other entity (including any predecessor) for whose acts or omission the Company or any Subsidiary is or could reasonably be expected to be liable); there are no past, present or, to the Company's or any Subsidiary's knowledge, reasonably anticipated future events, conditions, circumstances, activities, practices, actions, omissions or plans that could reasonably be expected to give rise to any material costs or liabilities to the Company or any Subsidiary under, or to interfere with or prevent compliance by the Company or any Subsidiary with, Environmental Laws, except as would not, individually or in the aggregate, have a Material Adverse Effect; to the Company's or any Subsidiaries' knowledge, neither the Company nor any Subsidiary (i) is the subject of any investigation, (ii) has received any notice or claim, (iii) is a party to or affected by any pending or threatened action, suit or proceeding, (iv) is bound by any judgment, decree or order, or (v) has entered into any agreement, in each case relating to any alleged violation of any Environmental Law or any actual or alleged release or threatened release or cleanup at any location of any Hazardous Materials (as defined below) (as used herein, "Environmental Law" means any federal, state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment, injunction, permit, license, authorization or other binding requirement, or common law, relating to health, safety or the protection, cleanup or restoration of the environment or natural resources, including those relating to the distribution, processing, generation, treatment, storage, disposal, transportation, other handling or release or threatened release of Hazardous Materials, and "Hazardous Materials" means any material (including, without limitation, pollutants, contaminants, hazardous or toxic substances or wastes including petroleum and any petroleum products or byproducts) that is regulated by or may give rise to liability under any Environmental Law); (cc) from time to time, the Company and each of the Subsidiaries conducts a review of the effect of the Environmental Laws on its business, operations and properties, in a manner which is reasonable in light of the Company's and each respective Subsidiary's business in order to identify and evaluate associated costs and liabilities (including, without limitation, any capital or operating expenditures required for cleanup, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties); 13 (dd) all tax returns required to be filed by the Company and each of the Subsidiaries have been filed except where the failure to file could not, individually or in the aggregate, have a Material Adverse Effect, and all taxes and other assessments of a similar nature (whether imposed directly or through withholding) including any interest, additions to tax or penalties applicable thereto due or claimed to be due from such entities have been paid, other than those being contested in good faith and for which adequate reserves have been provided and other than any failure to pay that could not, individually or in the aggregate, have a Material Adverse Effect; (ee) the Company and each of the Subsidiaries maintains insurance covering its respective properties (including the vessels described in the Prospectus and the Registration Statement), operations, personnel and businesses as the Company and each respective Subsidiary deems adequate; such insurance insures against such losses and risks (including environmental damage and pollution coverage) to an extent which is adequate in accordance with customary industry practice to protect the Company, each of the Subsidiaries and their respective businesses; all such insurance is fully in force on the date hereof and will be fully in force at the time of purchase and any additional time of purchase; and none of the Company or the Subsidiaries has received written notice from any insurer or agent of such insurer that any material capital improvements or other material expenditures are required or necessary to be made in order to continue such insurance; (ff) neither the Company nor any Subsidiary has sustained since the date of the last audited financial statements included in the Registration Statement and the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or judicial or governmental action, order or decree; (gg) neither the Company nor any Subsidiary has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company or any Subsidiary or, to the Company's or any Subsidiary's knowledge, any other party to any such contract or agreement; (hh) the Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; 14 (ii) the Company has established and maintains and evaluates "disclosure controls and procedures" (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and "internal control over financial reporting" (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company's chief executive officer, its principal financial officer and its principal accounting officer by others within those entities, and such disclosure controls and procedures are effective to perform the functions for which they were established; the Company's auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) any significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data; and (ii) any known fraud, whether or not material, that involves management or other employees who have a role in the Company's internal controls; any material weaknesses in internal controls have been identified for the Company's auditors; since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect the Company's internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses; and the Company is, and since July 30, 2002 has been, in compliance with all applicable effective provisions of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and the rules and regulations of the Commission and the New York Stock Exchange, Inc. promulgated thereunder and is actively taking reasonable steps to ensure that it will be in compliance with other applicable provisions of the Sarbanes-Oxley Act upon the effectiveness of such provisions; (jj) the chief executive officer and the chief financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act and any related rules and regulations promulgated by the Commission, and the statements contained in each such certification were true and correct when made; (kk) there are no business relationships or related party transactions involving the Company or any of the Subsidiaries or any other person required to be described in the Prospectus and the Registration Statement which have not been described as required; the Company has provided you true, correct and complete copies of all documentation pertaining to any currently outstanding extension of credit in the form of a personal loan made, directly or indirectly, by the Company to any director or executive officer of the Company, or to any family member or affiliate of any director or executive officer of the Company; and on or after July 30, 2002, the Company has not, directly or indirectly, (i) extended credit, arranged to extend credit, or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer of the Company, or to or for any family member or affiliate of any director or executive officer of the Company; or (ii) made any material modification, including any 15 renewal thereof, to any term of any personal loan to any director or executive officer of the Company, or any family member or affiliate of any director or executive officer, which was outstanding on July 30, 2002; (ll) all statistical or market-related data included in the Registration Statement or the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and the Company has obtained the written consent to the use of such data from such sources to the extent required; (mm) neither the Company, nor any Subsidiary, nor, to the Company's or any Subsidiary's knowledge, any employee or agent of the Company or any Subsidiary has made any payment of funds of the Company or any Subsidiary or received or retained any funds in violation of any law, rule or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus; (nn) except pursuant to this Agreement, the Company has not incurred any liability for any finder's or broker's fee or agent's commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby or by the Registration Statement and the Prospectus; (oo) neither the Company nor any of its directors, officers, affiliates or controlling persons has taken, directly or indirectly, any action designed, or which has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares; (pp) to the Company's knowledge after due inquiry, there are no affiliations or associations between any member of the NASD and any of the Company's executive officers, directors or 5% or greater securityholders, except as described in the NASD Questionnaire for Directors, Executive Officers and Certain Beneficial Owners completed by each of the Company's executive officers, directors and 5% securityholders and provided to the Underwriter; (qq) the Company is a citizen of the United States within the meaning of Section 2 of the Shipping Act, 1916, as amended (the "Shipping Act"), and is qualified to engage in the coastwise trade of the United States; neither the compliance by the Company with the provisions of the Transaction Documents nor the consummation of the transactions set forth therein will cause the Company to cease to be a citizen of the United States within the meaning of Section 2 of the Shipping Act or cause the Company to cease to be qualified to engage in the coastwise trade of the United States; 16 (rr) neither the Company nor any Subsidiary or any of their respective affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes; (ss) neither the Company nor any Subsidiary nor, to the knowledge of the Company or any Subsidiary, any director, officer, agent, employee or affiliate of the Company or any of the Subsidiaries, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Prospectus and the Registration Statement; neither the Company nor any Subsidiary nor, to the knowledge of the Company or any Subsidiary, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the "FCPA"), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any "foreign official" (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company, the Subsidiaries and, to the knowledge of the Company or any Subsidiary, its affiliates have conducted their businesses in compliance with the FCPA, and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith; (tt) except as described in the Prospectus and the Registration Statement, no Subsidiary is prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Subsidiary's capital stock or other equity interests, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary's property or assets to the Company or any other Subsidiary of the Company; except as described in the Prospectus and the Registration Statement, the Company is not prohibited, directly or indirectly, from paying any dividends to its stockholders; and (uu) the statements in the Prospectus and the Registration Statement under the headings "Business -- Regulation," "Business -- New Tax Legislation," "Business -- Insurance," "Description of the Preferred Stock," "Description of the Notes," "Description of Indebtedness," "Description of Common Stock," "Certain Relationships and Transactions," "Material U.S. Federal Income Tax Considerations," and "Underwriting," in each case insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal matters, agreements, documents or proceedings. 17 In addition, any certificate signed by any officer of the Company and delivered to the Underwriter or counsel for the Underwriter in connection with the offering of the Shares shall be deemed to be a representation and warranty by the Company as to matters covered thereby, to the Underwriter. 4. Certain Covenants of the Company. The Company hereby agrees: (a) to furnish such information as may be required and otherwise to cooperate in qualifying the Shares for offering and sale under the securities or blue sky laws of such states or other jurisdictions as you may designate and to maintain such qualifications in effect so long as you may request for the distribution of the Shares; provided, however, that the Company shall not be required to qualify as a foreign corporation or to consent to the service of process under the laws of any such jurisdiction (except service of process with respect to the offering and sale of the Shares); and to promptly advise you of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (b) to make available to the Underwriter in Baltimore, Maryland, as soon as practicable after the Registration Statement becomes effective, and thereafter from time to time to furnish to the Underwriter, as many copies of the Prospectus (or of the Prospectus as amended or supplemented if the Company shall have made any amendments or supplements thereto after the effective date of the Registration Statement) as the Underwriter may reasonably request for the purposes contemplated by the Act; in case the Underwriter is required to deliver a prospectus after the nine-month period referred to in Section 10(a)(3) of the Act in connection with the sale of the Shares, the Company will prepare, at its expense, promptly upon request, such amendment or amendments to the Registration Statement and the Prospectus as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the Act; (c) if, at the time this Agreement is executed and delivered, it is necessary for the Registration Statement or any post-effective amendment thereto to be declared effective before the Shares may be sold, the Company will use its best efforts to cause the Registration Statement or such post-effective amendment to become effective as soon as practicable, and the Company will advise you promptly and, if requested by you, will confirm such advice in writing, (i) when the Registration Statement and any such post-effective amendment thereto has become effective, and (ii) if Rule 430A under the Act is used, when the Prospectus is filed with the Commission pursuant to Rule 424(b) under the Act (which the Company agrees to file in a timely manner under such Rule); (d) to advise you promptly, confirming such advice in writing, of any request by the Commission for amendments or supplements to the Registration Statement or the Exchange Act Registration Statement or the Prospectus or for 18 additional information with respect thereto, or of notice of institution of proceedings for, or the entry of, a stop order, suspending the effectiveness of the Registration Statement and, if the Commission should enter a stop order suspending the effectiveness of the Registration Statement, to use its best efforts to obtain the lifting or removal of such order as soon as practicable; to advise you promptly of any proposal to amend or supplement the Registration Statement or the Exchange Act Registration Statement or the Prospectus and to provide you and your counsel copies of any such documents for review and comment a reasonable amount of time prior to any proposed filing and to file no such amendment or supplement to which you shall object in writing; (e) to file promptly all reports and any definitive proxy or information statement required to be filed by the Company with the Commission in order to comply with the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Shares; to provide you with a copy of such reports and statements and other documents to be filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act during such period for your review and comment a reasonable amount of time prior to any proposed filing, and to file no such report, statement or document to which you shall object in writing; and to promptly notify you of any such filing; (f) if necessary or appropriate, to file a registration statement pursuant to Rule 462(b) under the Act and pay the applicable fees in accordance with the Act; (g) to advise the Underwriter promptly of the happening of any event within the time during which a prospectus relating to the Shares is required to be delivered under the Act which could require the making of any change in the Prospectus then being used so that the Prospectus would not include an untrue statement of material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading, and, during such time, subject to Section 4(d) hereof, to prepare and furnish, at the Company's expense, to the Underwriter promptly such amendments or supplements to such Prospectus as may be necessary to reflect any such change; (h) to make generally available to its security holders, and to deliver to you, an earnings statement of the Company (which will satisfy the provisions of Section 11(a) of the Act) covering a period of twelve months beginning after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act) as soon as is reasonably practicable after the termination of such twelve-month period but in any case not later than, March 1, 2006; (i) to furnish to its stockholders as soon as practicable after the end of each fiscal year an annual report (including a consolidated balance sheet and 19 statements of income, stockholders' equity and cash flow of the Company for such fiscal year, accompanied by a copy of the certificate or report thereon of nationally recognized independent certified public accountants duly registered with the PCAOB); (j) to furnish to you five (5) copies of the Registration Statement, as initially filed with the Commission, and of all amendments thereto (including all exhibits thereto); (k) to furnish to you promptly for a period of five years from the date of this Agreement (i) at the same time as distributed to the Company's stockholders after the end of each fiscal year, copies of the annual report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, changes in stockholders' investment and cash flows for the year then ended and the opinion thereon of the Company's independent public or certified public accountants; (ii) at the same time as distributed to the Company's stockholders copies of any reports, proxy statements, or other communications which the Company shall send to its stockholders or shall from time to time publish or publicly disseminate, (iii) at the same time as filed with any national securities exchange, copies of documents or reports filed with any national securities exchange on which any class of securities of the Company is listed, and (iv) such other information as you may reasonably request regarding the Company; (l) to furnish to you as early as practicable prior to the time of purchase and any additional time of purchase, as the case may be, but not later than two business days prior thereto, a copy of the latest available unaudited interim and monthly financial statements, if any, of the Company which have been read by the Company's independent certified public accountants, as stated in their letter to be furnished pursuant to Section 6(d) hereof; (m) to apply the net proceeds from the sale of the Shares in the manner set forth under the caption "Use of Proceeds" in the Prospectus; (n) to pay all costs, expenses, fees and taxes in connection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Underwriter and to dealers (including costs of mailing and shipment), (ii) the registration, issue, sale and delivery of the Shares including any stock or transfer taxes and stamp or similar duties payable upon the sale, issuance or delivery of the Shares to the Underwriter, (iii) the producing, word processing and/or printing of this Agreement, any dealer agreements, any Powers of Attorney and any closing documents (including compilations thereof) and the reproduction and/or printing and furnishing of copies of each thereof to the Underwriter and (except closing documents) to dealers (including costs of mailing and shipment), (iv) the qualification of the 20 Shares for offering and sale under state or foreign laws and the determination of their eligibility for investment under state or foreign laws as aforesaid (including the reasonable legal fees and filing fees and other disbursements of counsel for the Underwriter related to such qualification and determination) and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Underwriter and to dealers, (v) listing of the Shares on the New York Stock Exchange, Inc. and any registration thereof under the Exchange Act, (vi) any filing for review of the public offering of the Shares by the NASD, including the reasonable legal fees and filing fees and other disbursements of counsel to the Underwriter related to such filing, (vii) the fees and disbursements of any transfer agent or registrar for the Shares, (viii) the costs and expenses of the Company relating to presentations or meetings undertaken in connection with the marketing of the offering and sale of the Shares to prospective investors and the Underwriter's sales forces, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel, lodging and other expenses incurred by the officers of the Company and any such consultants in connection with the road show, (ix) the preparation and filing of the Exchange Act Registration Statement, including any amendments thereto, and (x) the performance of the Company's other obligations hereunder; (o) not to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Common Stock or securities convertible into or exchangeable or exercisable for Common Stock or warrants or other rights to purchase Common Stock or any other securities of the Company that are substantially similar to Common Stock, or file or cause to be declared effective a registration statement under the Act relating to the offer and sale of any shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock or warrants or other rights to purchase Common Stock or any other securities of the Company that are substantially similar to Common Stock for a period of 60 days after the date hereof (the "Lock-Up Period"), without the prior written consent of the Underwriter, except for (i) the registration of the Shares and the sales to the Underwriter pursuant to this Agreement, (ii) issuances of Common Stock upon the exercise of options or warrants disclosed as outstanding in the Registration Statement and the Prospectus, (iii) the issuance of employee stock options not exercisable during the Lock-Up Period pursuant to stock option plans described in the Registration Statement and the Prospectus and (iv) the issuance of Common Stock upon conversion of the Shares in compliance with the Certificate of Designations; (p) prior to the time of purchase or the additional time of purchase, as the case may be, to issue no press release or other communication directly or indirectly and hold no press conferences with respect to the Company, the financial condition, results of operations, business, properties, assets, or liabilities of the Company, or the offering of the Shares, without your prior consent; 21 (q) to use its best efforts to cause the Shares and the Conversion Shares, if any, to be listed for quotation on the New York Stock Exchange, Inc. and to maintain the listing of the Shares and the Common Stock (including the Conversion Shares) on the New York Stock Exchange, Inc.; (r) to maintain a transfer agent and, if necessary under the jurisdiction of incorporation of the Company, a registrar for the Shares; and (s) to cause the Notes, if issued, to be listed for quotation on one of the following markets: New York Stock Exchange, Inc., National Association of Securities Dealers Automated Quotation National Market System ("NASDAQ"), American Stock Exchange or another similar securities exchange or securities trading market and to use its best efforts to maintain such listing. 5. Reimbursement of Underwriter's Expenses. If the Shares are not delivered for any reason other than the default by the Underwriter in its obligations hereunder, the Company shall, in addition to paying the amounts described in Section 4(n) hereof, reimburse the Underwriter for its out-of-pocket expenses reasonably incurred in connection with this Agreement and the offering contemplated hereby, including the fees and disbursements of its counsel. 6. Conditions of Underwriter's Obligations. The obligations of the Underwriter hereunder are subject to the accuracy of the representations and warranties on the part of the Company on the date hereof, at the time of purchase and, if applicable, at the additional time of purchase, the performance by the Company of its obligations hereunder and to the following additional conditions precedent: (a) The Company shall furnish to you at the time of purchase and, if applicable, at the additional time of purchase, an opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., counsel for the Company, addressed to the Underwriter, and dated the time of purchase or the additional time of purchase, as the case may be, in form and substance reasonably satisfactory to Venable LLP, counsel for the Underwriter, in the form set forth in Exhibit B hereto. (b) You shall have received from Ernst & Young LLP letters dated, respectively, the date of this Agreement, the time of purchase and, if applicable, the additional time of purchase, and addressed to the Underwriter in the forms heretofore approved by the Underwriter. (c) You shall have received at the time of purchase and, if applicable, at the additional time of purchase, the favorable opinion of Venable LLP, counsel for the Underwriter, dated the time of purchase or the additional time of purchase, as the case may be, in form and substance reasonably satisfactory to the Underwriter. 22 (d) No Prospectus or amendment or supplement to the Registration Statement or the Prospectus shall have been filed to which you object in writing. (e) The Registration Statement and the Exchange Act Registration Statement shall become effective not later than 5:30 P.M., New York City time, on the date of this Agreement and, if Rule 430A under the Act is used, the Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M., New York City time, on the second full business day after the date of this Agreement, and any registration statement pursuant to Rule 462(b) under the Act required in connection with the offering and sale of the Shares shall have been filed and become effective no later than 10:00 P.M., New York City time, on the date of this Agreement. (f) Prior to the time of purchase, and, if applicable, the additional time of purchase, (i) no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement and all amendments thereto shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading; and (iii) the Prospectus and all amendments or supplements thereto shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. (g) Between the time of execution of this Agreement and the time of purchase or the additional time of purchase, as the case may be, (A) no Material Adverse Effect or any development involving a prospective Material Adverse Effect shall occur or become known, (B) no change in the capital stock or long-term debt of the Company or any Subsidiary (other than as contemplated by this Agreement) shall occur or become known and (C) no transaction which is material to the Company and the Subsidiaries, taken as a whole, shall have been entered into by the Company or any Subsidiary. (h) The Company will, at the time of purchase and, if applicable, at the additional time of purchase, deliver to you a certificate of its chief executive officer and its chief financial officer, dated the time of purchase or additional time of purchase, as the case may be, in the form attached as Exhibit C hereto. (i) You shall have received signed Lock-up Agreements referred to in Section 3(w) hereof. (j) The Company shall have furnished to you such other documents and certificates as to the accuracy and completeness of any statement in the 23 Registration Statement and the Prospectus as of the time of purchase and, if applicable, the additional time of purchase, as you may reasonably request. (k) The Shares shall have been approved for listing on the New York Stock Exchange, Inc., subject only to notice of issuance at or prior to the time of purchase or the additional time of purchase, as the case may be. (l) The Company and the Trustee shall have executed and delivered the Indenture. 7. Effective Date of Agreement; Termination. This Agreement shall become effective (i) if Rule 430A under the Act is not used, when you shall have received notification of the effectiveness of the Registration Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto have executed and delivered this Agreement. The obligations of the Underwriter hereunder shall be subject to termination in the absolute discretion of the Underwriter if (x) since the time of execution of this Agreement or the earlier respective dates as of which information is given in the Registration Statement and the Prospectus, there has been any material adverse change or any development involving a prospective material adverse change in the business, properties, management, condition (financial or otherwise), results of operations or prospects of the Company and the Subsidiaries, taken as a whole, which would, in the Underwriter's judgment make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus, or (y) since the time of execution of this Agreement, there shall have occurred: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the NASDAQ; (ii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange, Inc.; (iii) a general moratorium on commercial banking activities declared by either federal, New York State or Louisiana State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) an outbreak or escalation of hostilities or acts of terrorism involving the United States or a declaration by the United States of a national emergency or war; or (v) any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the Underwriter's judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus, or (z) since the time of execution of this Agreement, there shall have occurred any downgrading, or any notice or announcement shall have been given or made of (i) any intended or potential downgrading, or (ii) any watch, review or possible change that does not indicate an affirmation or improvement in the rating accorded any securities of or guaranteed by the Company by any "nationally recognized statistical rating organization," as that term is defined in Rule 436(g)(2) under the Act. 24 If the Underwriter elects to terminate this Agreement as provided in this Section 7, the Company shall be notified promptly in writing. If the sale to the Underwriter of the Shares, as contemplated by this Agreement, is not carried out by the Underwriter for any reason permitted under this Agreement, or if such sale is not carried out because the Company shall be unable to comply with any of the terms of this Agreement, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriter shall be under no obligation or liability to the Company under this Agreement (except to the extent provided in Section 9 hereof) hereunder). 8. Reserved. 9. Indemnity and Contribution. (a) Subject to the provisions of subsection (c) below, the Company agrees to indemnify, defend and hold harmless the Underwriter, its partners, directors and officers, and any person who controls the Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Underwriter or any such person may incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company), or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in such Registration Statement or necessary to make the statements made therein not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information concerning the Underwriter furnished in writing by or on behalf of the Underwriter through you to the Company expressly for use in, such Registration Statement or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Registration Statement or necessary to make such information not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in a Prospectus (the term Prospectus for the purpose of this Section 9 being deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus as amended or supplemented by the Company), or arises out of or is based upon any omission or alleged omission to state a material fact required to be stated in such Prospectus or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading, except insofar as any such loss, damage, expense, liability or claim arises out of or is based upon any untrue 25 statement or alleged untrue statement of a material fact contained in, and in conformity with information concerning the Underwriter furnished in writing by or on behalf of the Underwriter to the Company expressly for use in, such Prospectus or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Prospectus or necessary to make such information, in light of the circumstances under which it was presented, not misleading, (iii) any untrue statement or alleged untrue statement made by the Company in Section 3 hereof or the failure by the Company to perform when and as required any agreement or covenant contained herein, or (iv) any untrue statement or alleged untrue statement of any material fact contained in any audio or visual materials provided by the Company or based upon written information furnished by or on behalf of the Company including, without limitation, slides, videos, films or tape recordings used in connection with the marketing of the Shares. If any action, suit or proceeding (each, a "Proceeding") is brought against the Underwriter or any such person in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, the Underwriter or such person shall promptly notify the Company in writing of the institution of such Proceeding and the Company shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify the Company shall not relieve the Company from any liability which the Company may have to the Underwriter or any such person or otherwise, except to the extent that the Company has been materially prejudiced (through the forfeiture of substantive rights or defenses or otherwise) by such omission. The Underwriter or such person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Underwriter or of such person unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such Proceeding or the Company shall not have, within a reasonable period of time in light of the circumstances, employed counsel reasonably satisfactory to such indemnified party to defend such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from, additional to or in conflict with those available to the Company (in which case the Company shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but the Company may, without limiting the generality of the foregoing, employ counsel and participate in the defense thereof, provided the fees and expenses of such counsel shall be at the expense of the Company), in any of which events such fees and expenses shall be borne by the Company and paid as incurred (it being understood, however, that the Company shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). The Company shall not be liable for any settlement of any Proceeding effected without its written 26 consent but, if settled with the written consent of the Company, the Company agrees to indemnify and hold harmless the Underwriter and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by this subsection, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have fully reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 days' prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party. (b) The Underwriter agrees to indemnify, defend and hold harmless the Company, its directors and officers, and any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons, from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Company or any such person may incur under the Act, the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in, and in conformity with information concerning the Underwriter furnished in writing by or on behalf of the Underwriter to the Company expressly for use in, the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Company) or in a Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Registration Statement or such Prospectus or necessary to make such information, in light of the circumstances under which it was presented, not misleading. If any Proceeding is brought against the Company or any such person in respect of which indemnity may be sought against the Underwriter pursuant to the foregoing paragraph, the Company or such person shall promptly notify the Underwriter in writing of the institution of such Proceeding and the Underwriter shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees 27 and expenses; provided, however, that the omission to so notify the Underwriter shall not relieve the Underwriter from any liability which the Underwriter may have to the Company or any such person or otherwise, except to the extent that the Underwriter has been materially prejudiced (through the forfeiture of substantive rights or defenses or otherwise) by such omission. The Company or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall have been authorized in writing by the Underwriter in connection with the defense of such Proceeding or the Underwriter shall not have, within a reasonable period of time in light of the circumstances, employed counsel reasonably satisfactory to such indemnified party to defend such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to or in conflict with those available to the Underwriter (in which case the Underwriter shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but the Underwriter may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of the Underwriter), in any of which events such fees and expenses shall be borne by the Underwriter and paid as incurred (it being understood, however, that the Underwriter shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). The Underwriter shall not be liable for any settlement of any such Proceeding effected without the written consent of the Underwriter but, if settled with the written consent of the Underwriter, the Underwriter agrees to indemnify and hold harmless the Company and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by this subsection, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have fully reimbursed the indemnified party in accordance with such request prior to the date of such settlement, and (iii) such indemnified party shall have given the indemnifying party at least 30 days' prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and such settlement does not include an admission of fault or culpability, or a failure to act, by or on behalf of such indemnified party. 28 (c) If the indemnification provided for in this Section 9 is unavailable to an indemnified party under subsection (a) or (b), as the case may be, of this Section 9 or insufficient to hold an indemnified party harmless in respect of any losses, damages, expenses, liabilities or claims referred to therein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Shares, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriter on the other in connection with the statements or omissions which resulted in such losses, damages, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriter on the other shall be deemed to be in the same respective proportions as the total proceeds from the offering (net of underwriting discounts but before deducting expenses) received by the Company, and the total underwriting discounts received by the Underwriter, bear to the aggregate public offering price of the Shares. The relative fault of the Company on the one hand and of the Underwriter on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Company or by the Underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any Proceeding. (d) The Company and the Underwriter agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in subsection (c) above. Notwithstanding the provisions of this Section 9, the Underwriter shall not be required to contribute any amount in excess of the amount by which the total underwriting discounts received by the Underwriter with respect to the offering of the Shares exceeds the amount of any damage which the Underwriter has otherwise been required to pay by reason of such untrue statement or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The indemnity and contribution agreements contained in this Section 9 and the covenants, warranties and representations of the Company 29 contained in this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Underwriter, its partners, directors or officers or any person (including each partner, officer or director of such person) who controls the Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company, its directors or officers or any person who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. The Company and the Underwriter agree promptly to notify each other of the commencement of any Proceeding against it and, in the case of the Company, against any of the Company's officers or directors in connection with the issuance and sale of the Shares, or in connection with the Registration Statement or the Prospectus. (f) The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified person hereunder at law or in equity. 10. Information Furnished by the Underwriter. The statements set forth in "Underwriting Discount and Financial Advisory Fee" under the caption "Underwriting" in the Prospectus, only insofar as such statements relate to the amount of selling concession and reallowance that may be undertaken by the Underwriter, constitute the only information furnished by or on behalf of the Underwriter as such information is referred to in Sections 3 and 9 hereof. 11. Notices. Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by facsimile and, if to the Underwriter, shall be sufficient in all respects if delivered or sent to Ferris, Baker Watts, Incorporated, 100 Light Street, Baltimore, MD 21202, Attention: Peter McGowan, Senior Vice President (facsimile number: (410) 659-4632,with a copy (which shall not constitute notice) to Venable LLP, 2 Hopkins Plaza, Suite 1800, Baltimore, MD, 21201-2978 Attention: Thomas D. Washburne, Jr. (facsimile number: (410) 244-7742), and, if to the Company, shall be sufficient in all respects if delivered or sent to the Company at the offices of the Company at 650 Poydras Street, New Orleans, Louisiana 70130, Attention: Gary L. Ferguson, Vice President and Chief Financial Officer (facsimile number: (504) 529-2078, with a copy (which shall not constitute notice) to Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., 201 St. Charles Avenue, 51st Floor, New Orleans, Louisiana 70170-5100 Attention: L. Richards McMillan, II (facsimile number: (504) 582-8012). 12. Governing Law; Construction. This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement ("Claim"), directly or indirectly, shall be governed by, and construed in accordance with, the laws of the State of Maryland without regard to the conflict of law principles thereof. The section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement. 30 13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of Maryland located in the City of Baltimore or in the United States District Court for the District of Maryland, which courts shall have jurisdiction over the adjudication of such matters, and the Company consents to the jurisdiction of such courts and personal service with respect thereto. The Company hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party against the Underwriter or any indemnified party. Each of the Underwriter and the Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Company and may be enforced in any other courts to the jurisdiction of which the Company is or may be subject, by suit upon such judgment. 14. Parties at Interest. The Agreement herein set forth has been and is made solely for the benefit of the Underwriter and the Company and to the extent provided in Section 9 hereof the controlling persons, partners, directors and officers referred to in such Section, and their respective successors, assigns, heirs, personal representatives and executors and administrators. No other person, partnership, association or corporation (including a purchaser, as such purchaser, from the Underwriter) shall acquire or have any right under or by virtue of this Agreement. 15. Counterparts. This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties. 16. Successors and Assigns. This Agreement shall be binding upon the Underwriter and the Company and their successors and assigns and any successor or assign of any substantial portion of the Company's and the Underwriter's respective businesses and/or assets. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] 31 If the foregoing correctly sets forth the understanding between the Company and the Underwriter, please so indicate in the space provided below for that purpose, whereupon this agreement and your acceptance shall constitute a binding agreement between the Company and the Underwriter. Very truly yours, INTERNATIONAL SHIPHOLDING CORPORATION By: /s/ Erik F. Johnsen --------------------------------- Name: Erik F. Johnsen Title: Chairman of the Board and Chief Executive Officer FERRIS, BAKER WATTS, INCORPORATED By: /s/ R. Mark Rust --------------------------------- Name: R. Mark Rust Title: Vice President 32 EXHIBIT A Lock-Up Agreement December____, 2004 Ferris, Baker Watts, Incorporated 100 Light Street Baltimore, MD 21202 Re: Proposed Public Offering of International Shipholding Corporation Ladies and Gentlemen: The undersigned understands that Ferris, Baker Watts, Incorporated (the "Underwriter") proposes to enter into an Underwriting Agreement (the "Underwriting Agreement") with International Shipholding Corporation (the "Company") providing for a public offering (the "Offering") by the Underwriter of securities of the Company, which may consist of common stock, convertible preferred stock, convertible debt securities or other securities of the Company (the "Securities"), pursuant to the Company's registration statement on Form S-1 (File No. 333-120161) as filed with the U.S. Securities and Exchange Commission (the "Registration Statement"). In consideration of the Underwriter's agreement to purchase and make the Offering of the Securities, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the undersigned hereby agrees that without the prior written consent of the Underwriter (which consent may be withheld in the Underwriter's sole discretion), the undersigned will not, during the period commencing on the date of this letter and ending 60 days after the date of the final prospectus relating to the Offering, directly or indirectly: (1) offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of any shares of the Company's common stock (the "Common Stock"), or any securities convertible into or exercisable or exchangeable for the Common Stock; (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, or any securities convertible into or exchangeable for the Common Stock, regardless of whether any such transaction described herein is to be settled by delivery of the Common Stock or such other securities, or by delivery of cash or otherwise; (3) make any demand for, or exercise any right with respect to, the registration of any shares of the Common Stock or any security convertible into or exercisable or exchangeable for the Common Stock; or (4) publicly announce any intention to do any of the foregoing. The foregoing sentence shall not apply to (a) the sale of any Common Stock to the Underwriter pursuant to the A-1 Underwriting Agreement, (b) bona fide gifts, provided the recipient or recipients thereof agree in writing to be bound by the terms of this Lock-Up Agreement, or (c) dispositions to any trust for the direct or indirect benefit of the undersigned and/or the immediate family of the undersigned, provided that such trust agrees in writing to be bound by the terms of this Lock-Up Agreement. For purposes of this paragraph, "immediate family" shall mean the undersigned and the spouse, any lineal descendant, father, mother, brother or sister of the undersigned and father, mother, brother or sister of the undersigned's spouse. The undersigned hereby agrees and consents to the entry of stop transfer instructions with the Company's transfer agent against the transfer of securities of the Company held by the undersigned except in compliance with this Lock-Up Agreement. The undersigned recognizes that the Offering will benefit the undersigned and the Company. The undersigned acknowledges that the Underwriter is relying on the representations and agreements of the undersigned contained in this Lock-Up Agreement in carrying out the Offering and in entering into the Underwriting Agreement. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. This Lock-Up Agreement is irrevocable and all authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. This Lock-Up Agreement shall be terminated and the undersigned shall be released from the undersigned's obligations hereunder (i) upon the date the Company notifies you in writing that it does not intend to proceed with the Offering, (ii) upon the date the registration statement filed with the Securities and Exchange Commission with respect to the Offering is withdrawn, (iii) upon the date the Underwriting Agreement is terminated, for any reason, prior to the time of purchase (as defined in the Underwriting Agreement), or (iv) if the Underwriting Agreement does not become effective by [ ], 2005. Very truly yours, ___________________________________ ___________________________________ Printed Name of Securityholder: ___________________________________ Capacity (Indicate capacity of person signing if signing as custodian or trustee or on behalf of an entity) A-2 Address:_________________________ _________________________ _________________________ Accepted as of the date first set forth above: FERRIS, BAKER WATTS, INCORPORATED By:___________________________ Name: Title: A-3 EXHIBIT B OPINION OF JONES, WALKER, WAECHTER, POITEVENT, CARRERE & DENEGRE, L.L.P. 1. Each of the Company and the significant subsidiaries of the Company, as defined by Rule 1-02 of Regulation S-X (each a "Subsidiary" and collectively, the "Subsidiaries") is validly existing and in good standing under the laws of its respective jurisdiction of organization with full power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and the Prospectus. The Company has full corporate power and authority to execute and deliver the Agreement and to issue, sell and deliver the Shares as contemplated therein, to execute, issue and deliver the Indenture and the Notes and perform its obligations thereunder, and to issue and deliver the Conversion Shares in accordance with the terms of the Certificate of Designations or the Indenture, as the case may be. 2. Each of the Company and the Subsidiaries is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified and in good standing would not, individually or in the aggregate, have a Material Adverse Effect. 3. The Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed and delivered by the Company and is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as rights to indemnification and contribution may be limited by applicable law and except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general equitable principles. 4. The Shares have been duly authorized and, upon their issuance, will be validly issued, fully paid and non-assessable, and will not have been issued in violation of or subject to any statutory preemptive rights or any preemptive rights, rights of first refusal or similar rights created by any contracts to which the Company is a party and of which such counsel is aware. 5. The Conversion Shares have been duly authorized and reserved for issuance upon conversion of the Shares or the Notes, as the case may be, and if and when issued in accordance with the Certificate of Designations or the Indenture, as the case may be, will be duly and validly issued, fully paid and nonassessable and will not have been issued in violation of or subject to any statutory preemptive rights or any preemptive rights, rights of first refusal or similar rights created by any contracts to which the Company is a party and of which such counsel is aware. B-1 6. The Notes are in the form contemplated by the Indenture, have been duly authorized by the Company for issuance pursuant to the terms of the Indenture and, when executed by the Company and authenticated by the Trustee in the manner provided in the Indenture, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general equitable principles. 7. The Indenture has been duly and validly authorized by all necessary corporate action on the part of the Company and the Trustee, and has been duly executed and delivered by the Company and the Trustee, and is a legally valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general equitable principles. The Indenture (i) has been duly qualified under the Trust Indenture Act and (ii) complies as to form with the requirements of the Trust Indenture Act. As of each of the time of purchase and the additional time of purchase, as applicable, no event has occurred nor has any circumstance arisen which, had the Notes been issued on such date, would constitute an Event of Default (as each such term is defined in the Indenture); 8. The Company has an authorized capitalization as set forth in the Registration Statement and the Prospectus. All of the issued and outstanding shares of capital stock of the Company and each Subsidiary (a) have been duly authorized and validly issued, (b) are fully paid and non-assessable, (c) have been issued in compliance with all federal and state securities laws, (d) have not been issued in violation of or subject to any statutory preemptive rights, and (e) have not been issued in violation of or subject to any preemptive rights, rights of first refusal or similar rights created by any contracts to which the Company or any Subsidiary is a party and of which such counsel is aware. All of the issued and outstanding shares of capital stock of each Subsidiary are owned, directly or indirectly, by the Company free and clear of any liens, claims or encumbrances of any kind. The Certificate and the Bylaws, each in the form filed (or incorporated by reference) as an exhibit to the Registration Statement, have been heretofore duly authorized and adopted, and are in full force and effect as of the date hereof, in each case in accordance with the Delaware General Corporation Law. 9. The Certificate of Designations has been duly authorized and adopted by the Company, has been filed with and accepted by the office of the Secretary of State of the State of Delaware and is in full force and effect. 10 The capital stock of the Company, including the Shares, conforms to the descriptions thereof contained in the Registration Statement and the Prospectus. 11. The form of specimen stock certificate relating to the Shares filed as an exhibit to the Registration Statement complies with the applicable provisions of the B-2 Delaware General Corporation Law and the rules and regulations of the New York Stock Exchange, Inc. 12. The Indenture and the Notes conform in all material respects to the descriptions thereof in the Registration Statement and the Prospectus. 13. The Registration Statement and the Prospectus and each amendment or supplement thereto (except as to the financial statements and schedules and other financial data contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act, and the conditions to the use of Form S-1 have been satisfied. 14. The Registration Statement has become effective under the Act and, to such counsel's knowledge, no stop order proceedings with respect thereto are pending or threatened under the Act, and any required filing of the Prospectus and any supplement thereto pursuant to Rule 424 under the Act has been made in the manner and within the time period required by such Rule 424; and the class of securities consisting of the Preferred Stock has become registered under Section 12(b) of the Exchange Act. 15. No approval, authorization, consent or order of or filing with any United States federal, state or local governmental or regulatory commission, board, body, authority or agency, or of or with the New York Stock Exchange, Inc., or approval of the stockholders of the Company, is required in connection with the execution, delivery and performance of this Agreement, the Indenture, the issuance and sale of the Shares, the issuance of the Conversion Shares, or the consummation by the Company of the transactions contemplated by the Transaction Documents other than such as have been filed or obtained under the Act and the Trust Indenture Act, filed under the Exchange Act, filed with and accepted by the Delaware Secretary of State, obtained from the New York Stock Exchange, Inc., each of which has been effected. 16. The Preferred Stock is authorized for listing on the New York Stock Exchange, Inc. 17. The execution, delivery and performance of this Agreement, the Indenture and the Notes by the Company, the issuance and sale of the Shares, the issuance of the Notes in compliance with the Indenture, the issuance of the Conversion Shares in compliance with the Certificate of Designations or the Indenture, as the case may be, and the consummation of the transactions contemplated by the Transaction Documents do not and will not conflict with, result in any breach or violation of or constitute a default under (nor constitute any event which with notice, lapse of time or both would result in any breach or violation of or constitute a default under) (a) the Certificate (including the Certificate of Designations and any other certificate of designations) or Bylaws, (b) any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other agreement or instrument known to us to which the Company or any Subsidiary is a party or by which any of their respective properties are bound (the foregoing, a "Material Document"), or (c) any United States B-3 federal or state regulation or rule, or any decree, judgment or order applicable to the Company, any Subsidiary or any of respective properties, except in the case of clauses (b) and (c) above, for such breaches, violations or defaults as could not, individually or in the aggregate, have a Material Adverse Effect. 18. To such counsel's knowledge, the Company is not in breach or violation of or in default under (nor has any event occurred which with notice, lapse of time, or both would result in any breach or violation of, or constitute a default under or give the holder of any indebtedness (or a person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) (a) the Certificate or Bylaws, (b) any Material Document, or (c) any United States federal or state regulation or rule, or any decree, judgment or order applicable to the Company, any Subsidiary or any of their respective properties and known to such counsel. 19. To such counsel's knowledge, there are no actions, suits, claims, investigations or proceedings pending, threatened or contemplated to which the Company or any Subsidiary is or would be a party or to which any of their respective properties is or would be subject at law or in equity, before or by any United States federal, state or local governmental or regulatory commission, board, body, authority or agency which are required to be described in the Registration Statement or the Prospectus but are not so described. 20. The Company is not and, after giving effect to the offering and sale of the Shares, will not be an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. 21. The information in the Registration Statement and the Prospectus under the headings "Risk Factors--If sufficient appropriations under the Maritime Security Act of 1996 are not made in any fiscal year, we may not continue to receive annual subsidy payments with respect to certain of our vessels," "Risk Factors--Our business and operations are highly-regulated," "Risk Factors--We are dependent on government charters and contracts," "Risk Factors--Operating hazards may increase our operating costs; our insurance coverage is limited," "Risk Factors--Our vessels could be seized by maritime claimants, which could result in a significant loss of earnings and cash flow for the related off-hire period," "Risk Factors--One of our time charter customers has filed for bankruptcy, the outcome of which could adversely affect our results of operations," "Business--Regulation," "Business--New Tax Legislation," "Business--Insurance," "Dividend Policy," "Management--Directors and Executive Officers--NYSE Director Independence Rules," "Management--Executive Compensation," "Certain Relationships and Transactions," "Description of the Preferred Stock," "Description of the Notes," "Description of Indebtedness," "Description of Common Stock," "Underwriting," and "Part II - Item 14 - Indemnification of Directors and Officers," insofar as such statements constitute a summary of documents or matters of law, as of the date hereof, are accurate B-4 and complete in all material respects and present fairly the information required to be shown. 22. To such counsel's knowledge, no holders of securities of the Company have rights to the registration of such securities under the Registration Statement, other than rights that have been waived or not exercised in connection with the transactions contemplated by the Registration Statement. 23. To such counsel's knowledge, there are no agreements to which the Company is a party that are required to be filed as exhibits to the Registration Statement which have not been filed as so required. 24. The statements set forth in the Registration Statement and the Prospectus under the heading "Material U.S. Federal Income Tax Considerations," while not purporting to address all possible United States federal income tax consequences of acquiring, owning or disposing of the Shares, the Notes and the Common Stock, insofar as they purport to constitute summaries of matters of United States federal income tax law or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. 25. To such counsel's knowledge, with respect to trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, "Intellectual Property Rights"), the Company and the Subsidiaries own or possess such Intellectual Property Rights as are reasonably necessary to conduct their business as now conducted, and the expected expiration of any such Intellectual Property Rights would not result in a Material Adverse Effect. To such counsel's knowledge, the Company has not received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would result in a Material Adverse Effect. To such counsel's knowledge, any of the Company's discoveries, inventions, products, or processes referred to in the Registration Statement or Prospectus do not infringe or conflict with any right or patent which is the subject of a patent application known to the Company. 26. Immediately prior to the sale of the Shares by the Company pursuant to the terms of the Agreement, the Company was a citizen of the United States within the meaning of Section 2 of the Shipping Act and was qualified to engage in the coastwise trade of the United States. 27. Immediately following the sale of the Shares by the Company and the compliance by the Company and the Underwriter with all of the provisions of the Agreement (and the consummation of the transactions herein contemplated), the Company will remain a citizen of the United States within the meaning of Section 2 of the Shipping Act and will continue to be qualified to engage in the coastwise trade of the United States. B-5 28. Nothing has come to our attention which leads us to believe that, at the date of the Prospectus, at the time of purchase and at the time of additional purchase, as the case may be, the Registration Statement and the Prospectus (other than the financial statements including supporting schedules and other financial and statistical information derived therefrom, as to which such counsel need express no opinion) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. B-6 EXHIBIT C OFFICERS' CERTIFICATE Each of the undersigned, Erik F. Johnsen, Chairman of the Board and Chief Executive Officer, and Gary L. Ferguson, Vice President and Chief Financial Officer of International Shipholding Corporation, a Delaware corporation (the "COMPANY"), on behalf of the Company, does hereby certify pursuant to Section 6(h) of that certain Underwriting Agreement dated December 29, 2004 (the "UNDERWRITING AGREEMENT") between the Company and Ferris, Baker Watts, Incorporated (terms used in this Certificate but not defined herein are as defined in the Underwriting Agreement) do hereby certify, in their respective capacities as officers of the Company, as follows: 1. The representations, warranties and agreements of the Company contained in the Underwriting Agreement were true and correct when made and are true and correct as of the date hereof; 2. The Company has performed all covenants and agreements and satisfied all conditions contained in the Underwriting Agreement; 3. (i) No stop order with respect to the effectiveness of the Registration Statement has been issued under the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the "Act") and no proceedings have been initiated under Section 8(d) or 8(e) of the Act; (ii) the undersigned has carefully examined the Registration Statement and the Prospectus; (iii) the Registration Statement and all amendments thereto do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (iv) the Prospectus and all amendments or supplements thereto do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; 4. Between the time of execution of the Underwriting Agreement and the time of purchase or the additional time of purchase, as the case may be, (i) no Material Adverse Effect and no development involving a prospective Material Adverse Effect has occurred or become known to the undersigned, (ii) no change in the capital stock or long-term debt of the Company or any Subsidiary (other than as contemplated by the Underwriting Agreement) has occurred or become known to the undersigned and (iii) no transaction which is material to the Company and the Subsidiaries, taken as a whole, has been entered into by the Company or any Subsidiary. C-1 5. Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P. and Venable LLP are entitled to rely on this certificate in connection with the opinions such firms are rendering pursuant to the Underwriting Agreement. [SIGNATURES NEXT PAGE] C-2 IN WITNESS WHEREOF, I have signed my name to this Officers' Certificate this 6th day of January, 2005. _____________________________________ Erik F. Johnsen Chairman of the Board and Chief Executive Officer _____________________________________ Gary L. Ferguson Vice President and Chief Financial Officer [SIGNATURE PAGE TO OFFICERS' CERTIFICATE] C-3 EX-3.1 3 h21520exv3w1.txt CERTIFICATE OF DESIGNATIONS EXHIBIT 3.1 INTERNATIONAL SHIPHOLDING CORPORATION CERTIFICATE OF DESIGNATIONS OF THE 6.0% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK ($1.00 PAR VALUE PER SHARE) (LIQUIDATION PREFERENCE $50 PER SHARE) PURSUANT TO SECTION 151(g) OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE THE UNDERSIGNED, being the Chairman of the Board and Chief Executive Officer of International Shipholding Corporation, a Delaware corporation (the "COMPANY"), does hereby certify that, pursuant to the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, the following resolutions were duly adopted by the Board of Directors of the Company and the Pricing Committee thereof, and pursuant to authority conferred upon the Board of Directors by the provisions of the Restated Certificate of Incorporation of the Company and, in the case of the Pricing Committee, by express resolution of the Board of Directors, the Board of Directors of the Company and the Pricing Committee adopted resolutions fixing the designations and the relative powers, preferences, rights, qualifications, limitations and restrictions of the 6.0% Convertible Exchangeable Preferred Stock of the Company. These composite resolutions are as follows: RESOLVED, that, pursuant to authority expressly granted to and vested in the Board of Directors of the Company (the "BOARD OF DIRECTORS") by the provisions of the Restated Certificate of Incorporation of the Company (the "CERTIFICATE OF INCORPORATION"), the issuance of a series of preferred stock, par value $1.00 per share, which shall consist of 880,000 of the 1,000,000 shares of preferred stock which the Company now has authority to issue, be, and the same hereby is, authorized, and the Board of Directors hereby fixes the powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions thereof (in addition to the powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, set forth in the Certificate of Incorporation which may be applicable to the preferred stock of this series) as follows: 1. NUMBER OF SHARES AND DESIGNATION. 880,000 shares of the preferred stock, par value $1.00 per share, of the Company are hereby constituted as a series of the preferred stock designated as 6.0% Convertible Exchangeable Preferred Stock (the "PREFERRED STOCK"). 2. DEFINITIONS. For purposes of the Preferred Stock, in addition to those terms otherwise defined herein, the following terms shall have the meanings indicated: "accrued" has the meaning specified in Section 3(a). "Affiliate" of any specified person shall mean any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control," when used with respect to any specified person means the power to direct or cause the direction of the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Amended Rights Plan" has the meaning specified in Section 7(d)(iv). "Beneficial Owner" means the person in whose name a share of Preferred Stock is recorded as beneficial owner of such share by the Depositary, or by any participant or indirect participant in the Depositary, as the case may be. "Board of Directors" shall mean the Board of Directors of the Company or a committee of the Board of Directors duly authorized to act for it hereunder. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Transfer Agent. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking institutions in the City of New York, New York are authorized or obligated by law or executive order to close or be closed. "Certificate of Designations" means this Certificate of Designations of the Preferred Stock. "Certificate of Incorporation" means the Restated Certificate of Incorporation of the Company, dated April 17, 1996, as such may be amended, modified or restated from time to time. "Change in Control" shall be deemed to have occurred at the time, after the Issue Date, (i) that any person or group of persons (within the meaning of Sections 13(d) or 14(a) of the Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Commission under the Exchange Act) of 50% or more of the voting capital stock of the Company; or (ii) within a period of twelve (12) consecutive calendar months, individuals who were directors of the Company on the first day of such period (together with any new directors whose election to the Board of Directors, or whose nomination for election, was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) shall cease to constitute a majority of the Board of Directors. "Change in Control Purchase Date" has the meaning specified in Section 6(a). -2- "Change in Control Purchase Notice" has the meaning specified in Section 6(c). "Closing Price" has the meaning specified in Section 7(i)(i). "Commission" shall mean the Securities and Exchange Commission. "Common Stock" shall mean the class of capital stock of the Company designated as Common Stock, par value $1.00 per share, at the date hereof. Subject to the provisions of Section 7(e), shares issuable on conversion of the Preferred Stock shall include only shares of such class or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable on conversion of the Preferred Stock shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. "Company" shall mean International Shipholding Corporation, a Delaware corporation, and shall include its successors and assigns. "Conversion Price" shall have the meaning specified in Section 7(a). "Current Market Price" has the meaning specified in Section 7(i)(ii). "Depositary" means, with respect to the Preferred Stock issuable or issued in the form of a Global Certificate, the person specified in Section 14(c) as the Depositary with respect to the Preferred Stock, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Certificate of Designations, and thereafter, "Depositary" shall mean or include such successor. The foregoing sentence shall likewise apply to any subsequent successor or successors. "Dividend Payment Date" shall have the meaning specified in Section 3(a). "Dividend Payment Record Date" shall have the meaning specified in Section 3(a). "Dividend Period" or "Dividend Periods" shall mean the quarterly dividend period or periods, commencing on, and including, a Dividend Payment Date and ending on, but excluding, the immediately succeeding Dividend Payment Date (other than the initial Dividend Period which shall commence on the Issue Date and end on, but exclude, the initial Dividend Payment Date). -3- "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Exchange Date" shall have the meaning specified in Section 10(b). "'ex' date" has the meaning specified in Section 7(i)(ii). "Expiration Time" shall have the meaning specified in Section 7(d)(vi). "fair market value" has the meaning specified in Section 7(i)(iii). "Global Certificate" shall have the meaning specified in Section 14(a). "holder," "holder of shares of Preferred Stock," or "holder of the Preferred Stock," as applied to any share of Preferred Stock, or other similar terms (but excluding the term "beneficial holder"), shall mean any person in whose name at the time a particular share of Preferred Stock is registered on the Company's stock records, which shall include the books of the Transfer Agent in respect of the Company and any stock transfer books of the Company. "Indenture" shall mean the Indenture governing the Notes, to be dated on or about January 6, 2005, between the Company and The Bank of New York, as trustee. "Issue Date" shall mean the first date on which shares of the Preferred Stock are issued. "Junior Stock" means the Common Stock and each other class of capital stock or series of preferred stock of the Company established by the Board of Directors after the Issue Date, the terms of which do not expressly provide that such class or series ranks senior to or on parity with the Preferred Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Company. "Junior Stock" shall include warrants, rights, calls, options and other securities exercisable or exchangeable for, or convertible into, such capital stock or preferred stock of the Company. "Liquidation" has the meaning specified in Section 4(a). "Liquidation Preference" shall have the meaning specified in Section 4(a). "New Rights Plan" has the meaning specified in Section 7(d)(iv). "Non-Electing Share" has the meaning specified in Section 7(e). "Notes" shall mean the Company's 6.0% Convertible Subordinated Notes due 2014, issuable under the Indenture upon the Company's exchange of the Preferred Stock pursuant to Section 10. -4- "Officers' Certificate," when used with respect to the Company, shall mean a certificate signed by (a) one of the President, the Chief Executive Officer, Executive or Senior Vice President, any Vice President (whether or not designated by a number or numbers or word or words added before or after the title "Vice President") or the Chief Financial Officer, and (b) one of the Treasurer or any Assistant Treasurer, Secretary or any Assistant Secretary, or the Controller of the Company, which is delivered to the Transfer Agent. "Parity Stock" means any class of capital stock or series of preferred stock of the Company established by the Board of Directors after the Issue Date, the terms of which expressly provide that such class or series will rank on parity with the Preferred Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Company. "Parity Stock" shall include warrants, rights, calls, options and other securities exercisable or exchangeable for, or convertible into, such capital stock or preferred stock of the Company. "person" shall mean a corporation, an association, a partnership, an individual, a joint venture, a joint stock company, a trust, a limited liability company, an unincorporated organization or any other entity or organization, including a government or an agency, instrumentality or political subdivision thereof. "Preferred Stock" has the meaning specified in Section 1. "Purchased Shares" has the meaning specified in Section 7(d)(vi). "Record Date" has the meaning specified in Section 7(i)(iv). "Reference Period" has the meaning specified in Section 7(d)(iv). "Rights Plan" has the meaning specified in Section 7(d)(iv). "Securities" has the meaning specified in Section 7(d)(iv). "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Senior Stock" means each class of capital stock or series of preferred stock of the Company established by the Board of Directors after the Issue Date, the terms of which expressly provide that such class or series will rank senior to the Preferred Stock as to dividend rights or rights upon the liquidation, winding-up or dissolution of the Company. "Senior Stock" shall include warrants, rights, calls, options and other securities exercisable or exchangeable for, or convertible into, such capital stock or preferred stock of the Company. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of -5- directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "Tender Expiration Time" has the meaning specified in Section 7(d)(vii). "Tender Purchased Shares" has the meaning specified in Section 7(d)(vii). "Trading Day" has the meaning specified in Section 7(i)(v). "Transfer Agent" means American Stock Transfer & Trust Company or such other agent or agents of the Company as may be designated by the Board of Directors as the transfer agent for the Preferred Stock. "Trigger Event" has the meaning specified in Section 7(d)(iv). "Trustee" shall mean The Bank of New York and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at the time serving as successor trustee under the Indenture. 3. DIVIDENDS. (a) Holders of the Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors, out of the funds of the Company legally available therefor, cash dividends, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, at the annual rate of 6.0% of the Liquidation Preference, payable in equal quarterly installments on March 31, June 30, September 30, and December 31 of each year (each a "DIVIDEND PAYMENT DATE"), commencing March 31, 2005 (and, in the case of any accrued but unpaid dividends, at such additional times and for such interim periods, if any, as determined by the Board of Directors). If any Dividend Payment Date shall be on a day other than a Business Day, then the Dividend Payment Date shall be on the next succeeding Business Day. Dividends on the Preferred Stock will be cumulative from the Issue Date, whether or not in any Dividend Period or Dividend Periods there shall be funds of the Company legally available for the payment of such dividends and whether or not such dividends are declared, and will be payable to holders of record as they appear on the stock books of the Company at the close of business on March 11, June 10, September 10 and December 11 of each year or on a record date that may be fixed by the Board of Directors and that will not be more than 60 days nor less than 10 days preceding the Dividend Payment Date (each such date, a "DIVIDEND PAYMENT RECORD DATE"). Dividends on the Preferred Stock shall accrue (whether or not declared) on a daily basis from the Issue Date, and accrued dividends for each Dividend Period shall accumulate to the extent not paid on the Dividend Payment Date first following the Dividend Period for which they accrue. As used herein, the term "accrued" with respect to dividends includes both accrued and accumulated dividends. -6- (b) The amount of dividends payable per share for each full Dividend Period for the Preferred Stock shall be computed by dividing the annual dividend rate by four (rounded down to the nearest one one-hundredth (1/100) of one cent). The amount of dividends payable for the initial Dividend Period on the Preferred Stock, or any other period shorter or longer than a full Dividend Period on the Preferred Stock, shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Holders of shares of Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of cumulative dividends, as herein provided. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Preferred Stock which may be in arrears. (c) So long as any shares of Preferred Stock are outstanding, no dividends, except as described in the next succeeding sentence, shall be declared or paid or set apart for payment on any Parity Stock for any period unless full cumulative dividends have been or contemporaneously are declared and paid, or declared and a sum sufficient for the payment thereof set apart for such payment, on the Preferred Stock through the then-most recent Dividend Payment Date. When dividends are not paid in full or a sum sufficient for such payment is not set apart, as aforesaid, upon the shares of Preferred Stock and any Parity Stock, all dividends declared upon shares of Preferred Stock and all dividends declared upon such Parity Stock shall be declared pro rata so that the ratio of the amount of dividends declared per share on the Preferred Stock to the amount of dividends declared per share on such Parity Stock shall in all cases equal the ratio of the amount of accrued and unpaid dividends per share on the shares of Preferred Stock to the amount of accrued and unpaid dividends per share on the shares of such Parity Stock. (d) So long as any shares of the Preferred Stock are outstanding, no Parity Stock shall be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund or otherwise for the purchase or redemption of any shares of any such Parity Stock) by the Company or any Subsidiary unless (i) the full cumulative dividends accrued on all outstanding shares of Preferred Stock shall have been paid or set apart for payment for all past Dividend Periods and (ii) sufficient funds shall have been set apart for the payment of the dividend for the current Dividend Period with respect to the Preferred Stock. (e) So long as any shares of the Preferred Stock are outstanding, no dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Common Stock or other Junior Stock) shall be declared or paid or set apart for payment, and no other distribution shall be declared or made or set apart for payment, in each case upon the Common Stock or any other Junior Stock, nor shall any Common Stock nor any other Junior Stock be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund or otherwise for the purchase or redemption of any shares of Common Stock or any other such Junior Stock) by the Company or any Subsidiary (except (A) by conversion into or exchange for Common Stock or any other such Junior Stock; or (B) repurchases of unvested shares of Common Stock or any other such Junior Stock at cost upon termination of the employment or consultancy of the holder thereof, provided such repurchases are approved by the Board of Directors in good faith) unless, in each case (i) the full cumulative dividends accrued on all outstanding shares of Preferred -7- Stock and any Parity Stock shall have been paid or set apart for payment for all past Dividend Periods and all past dividend periods with respect to such other Parity Stock, (ii) sufficient funds shall have been set apart for the payment of the dividend for the current Dividend Period with respect to the Preferred Stock and for the current dividend period with respect to such other Parity Stock, and (iii) such dividend, distribution, redemption, purchase or acquisition is not declared, paid or made, or funds or other assets therefor set aside or made available for payment or distribution (whether by way of a sinking fund or otherwise), until December 31, 2007. 4. LIQUIDATION PREFERENCE. (a) In the event of any voluntary or involuntary dissolution, liquidation or winding up of the Company (for the purposes of this Section 4, a "LIQUIDATION"), before any distribution of assets shall be made to the holders of Common Stock or any other Junior Stock, the holder of each share of Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Company available for distribution to its stockholders, a liquidation preference in an amount equal to $50 per share (the "LIQUIDATION PREFERENCE") plus all dividends accrued and unpaid on such share through and including the date of distribution of the assets of the Company to the holders of Preferred Stock, and the holders of any Parity Stock shall be entitled to receive the full respective liquidation preferences (including any premium) to which they are entitled and shall receive all accrued and unpaid dividends with respect to their respective shares through and including the date of distribution. (b) If upon any Liquidation of the Company, the assets available for distribution to the holders of Preferred Stock and any Parity Stock which shall then be outstanding shall be insufficient to pay the holders of all outstanding shares of Preferred Stock and such Parity Stock the full amounts (including all dividends accrued and unpaid) of the liquidation preferences to which they shall be entitled, then the holders of each series of such stock will share ratably in any such distribution of assets, first in proportion to their respective liquidation preferences until such preferences are paid in full, and then in proportion to their respective amounts of accrued and unpaid dividends. After payment of the liquidation preference and any accrued and unpaid dividends, the holders of shares of the Preferred Stock will not be entitled to any further participation in any distribution of assets by the Company. (c) For purposes of this Section 4, a Liquidation shall not include (i) any consolidation or merger of the Company with or into any other corporation, (ii) any liquidation, dissolution, winding up or reorganization of the Company immediately followed by reincorporation or reorganization as another corporation or other entity or (iii) a sale or other disposition of all or substantially all of the Company's assets to another corporation unless in connection therewith the Liquidation of the Company is specifically approved by all requisite corporate action. (d) The holder of any shares of Preferred Stock shall not be entitled to receive any payment owed for such shares under this Section 4 until such holder shall have effected book-entry transfer or physical delivery of certificates representing its shares of Preferred Stock, together with any necessary endorsements, to the Company or the Transfer -8- Agent (as appropriate) free of any liens, security interests or other claims. No interest shall accrue on any payment due upon Liquidation. 5. REDEMPTION AT THE OPTION OF THE COMPANY. (a) Prior to December 31, 2006, Preferred Stock may not be redeemed by the Company except pursuant to Section 5(b). On or after December 31, 2006, the Company, at its option, may redeem the shares of Preferred Stock, in whole or in part, out of funds legally available therefor, at any time or from time to time, subject to the notice provisions and provisions for partial redemption described below, during the periods shown below, for cash at the following redemption prices per share plus an amount equal to accrued and unpaid dividends, if any, to (but excluding) the date fixed for redemption, whether or not declared; provided that prior to December 31, 2007, Preferred Stock may not be redeemed by the Company except pursuant to Section 5(b) unless the Closing Price of Common Stock (or, if more than one class of Common Stock is then issued and outstanding, all classes of Common Stock) has exceeded 150% of the Conversion Price for at least 20 Trading Days during any period of 30 consecutive Trading Days ending within five Trading Days prior to the notice of redemption.
REDEMPTION DATE REDEMPTION PRICE --------------- ---------------- On or after December 31, 2006 and prior to December 31, 2007 $52.50 On or after December 31, 2007 and prior to December 31, 2008 $51.00 On or after December 31, 2008 $50.00
If the date fixed for redemption falls after a Dividend Payment Record Date and on or before the corresponding Dividend Payment Date, the payment of dividends becoming due on such Dividend Payment Date shall be payable to the holders of shares of Preferred Stock to be redeemed who are registered as such on the relevant Dividend Payment Record Date, subject to the terms and provisions of Section 3, and the amount payable to holders of such shares of Preferred Stock on the date fixed for redemption will not include any amount in respect of dividends declared and payable on such Dividend Payment Date. No sinking fund, mandatory redemption, mandatory retirement or other similar provision shall apply to the Preferred Stock. (b) In the event of a Change in Control, the Company, at its option, may redeem the shares of Preferred Stock, in whole but not in part, out of funds legally available therefor, on a date which is not later than sixty (60) days following the effective date of the event or circumstance resulting in the Change in Control, subject to the notice provisions described below, for cash at the following redemption prices per share plus an amount equal to accrued and unpaid dividends, if any, to (but excluding) the date fixed for redemption, whether or not declared: -9-
DATE OF CHANGE IN CONTROL REDEMPTION PRICE ------------------------- ---------------- Prior to December 31, 2007 $52.50 On or after December 31, 2007 and prior to December 31, 2008 51.25 On or after December 31, 2008 50.00
If the date fixed for redemption falls after a Dividend Payment Record Date and on or before the corresponding Dividend Payment Date, the payment of dividends becoming due on such Dividend Payment Date shall be payable to the holders of shares of Preferred Stock registered as such on the relevant Dividend Payment Record Date, subject to the terms and provisions of Section 3, and the amount payable to holders of such shares of Preferred Stock on the date fixed for redemption will not include any amount in respect of dividends declared and payable on such Dividend Payment Date. (c) If the Company elects to exercise the right to redeem the shares of Preferred Stock in whole or in part pursuant to Section 5(a), it shall fix a date for redemption, and it, or at its request, the Transfer Agent, in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such redemption at least thirty (30) and not more than sixty (60) days prior to the date fixed for redemption to the holders of shares of the Preferred Stock to be redeemed at their last addresses as the same appear on the Company's stock records and to the Beneficial Owners in accordance with the procedures established by the Depositary and the Transfer Agent; provided that if the Company shall give such notice, it shall also give such notice, and notice of the shares of Preferred Stock to be redeemed, to the Transfer Agent. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any share of Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other share of Preferred Stock. Concurrently with the mailing of any such notice of redemption, the Company shall (i) issue a press release announcing such redemption, (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York, and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release nor make such publications nor any defect therein shall affect the validity of the redemption notice or any of the proceedings for the redemption of any share of Preferred Stock called for redemption. (d) If the Company elects to exercise the right to redeem the shares of Preferred Stock in whole pursuant to Section 5(b), it shall fix a date for redemption, and it, or at its request, the Transfer Agent, in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such redemption on a date that shall be at least thirty (30) and not more than sixty (60) days prior to the date fixed for redemption, which shall not be later than sixty (60) days following the effective date of the event or circumstance resulting in the Change in Control, to the holders of shares of the Preferred Stock at their last addresses as the same -10- appear on the Company's stock records and to the Beneficial Owners in accordance with the procedures established by the Depositary and the Transfer Agent; provided that if the Company shall give such notice, it shall also give such notice to the Transfer Agent. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any share of Preferred Stock shall not affect the validity of the proceedings for the redemption of any other share of Preferred Stock. The notice shall state that a Change in Control has occurred or may occur and shall describe the event or circumstance which has resulted or may result in a Change in Control, shall be accompanied by a copy of any press release or other public announcement of the Change in Control event, and may state that the Company's obligation to redeem the shares of Preferred Stock is subject to consummation of the Change in Control event. Concurrently with the mailing of any such notice of redemption, the Company shall (i) issue a press release announcing such redemption, (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York, and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release nor make such publications nor any defect therein shall affect the validity of the redemption notice or any of the proceedings for the redemption of any share of Preferred Stock called for redemption. (e) In addition to the information specified in Sections 5(c) and 5(d), if applicable, each notice of redemption shall indicate that the Company has exercised its right to redeem the outstanding shares of preferred stock in respect of which notice is given and shall specify the number of shares of Preferred Stock to be redeemed, the date fixed for redemption (which shall be a Business Day), the redemption price at which such shares of Preferred Stock are to be redeemed, the place or places of payment and that payment will be made upon presentation and surrender of the certificate or certificates representing such shares of Preferred Stock, including any procedures applicable to a redemption to be accomplished through book-entry transfer and shall state that accrued and unpaid dividends to (but excluding) the date fixed for redemption will be paid as specified in said notice and that on and after said date dividends thereon will cease to accrue. Such notice shall also state the current Conversion Price and the date on which the right to convert such shares of Preferred Stock into Common Stock will expire. (f) If the Company gives notice of redemption as provided in this Section 5, then the Company shall, on the date fixed for redemption, before 12:00 p.m., New York City time, to the extent funds are legally available, with respect to: (i) shares of Preferred Stock held by the Depositary or its nominees, deposit or cause to be deposited, irrevocably with the Transfer Agent or the Depositary an amount of money sufficient to redeem on the date fixed for redemption all the shares of Preferred Stock so called for redemption (other than those theretofore surrendered for conversion into Common Stock) at the applicable redemption price, together with accrued and unpaid dividends to (but excluding) the date fixed for redemption and shall give the Transfer Agent or the Depositary, as the case may be, irrevocable instructions and authority to pay such amount to holders of such shares of Preferred Stock upon book-entry transfer of such shares of Preferred Stock to the Transfer Agent's account at the Depositary; and (ii) shares of Preferred Stock held in certificated form, deposit or cause to be deposited, -11- irrevocably with the Transfer Agent an amount of money sufficient to redeem on the date fixed for redemption all the shares of Preferred Stock so called for redemption (other than those theretofore surrendered for conversion into Common Stock) at the applicable redemption price, together with accrued and unpaid dividends to (but excluding) the date fixed for redemption and shall give the Transfer Agent irrevocable instructions and authority to pay such amount to holders of such shares of Preferred Stock upon surrender of the certificates evidencing such shares of Preferred Stock. (g) Payment of the redemption price for shares of the Preferred Stock, together with accrued and unpaid dividends to (but excluding) the date fixed for redemption, is conditioned upon book-entry transfer or physical delivery of certificates representing shares of the Preferred Stock, together with any necessary endorsements, to the Transfer Agent, or to the Transfer Agent's account at the Depositary, at any time after delivery of the notice of redemption. The Company shall be entitled to retain any interest, yield or gain on funds deposited with the Transfer Agent and/or the Depositary pursuant to this Section 5 in excess of the amounts required to pay the redemption price, together with accrued and unpaid dividends to (but excluding) the date fixed for redemption. Payment of the redemption price for the Preferred Stock, together with accrued and unpaid dividends to (but excluding) the date fixed for redemption will be made: (i) if book-entry transfer of or physical delivery of the Preferred Stock has been made by or on the date fixed for redemption, on the date fixed for redemption, or (ii) if book-entry transfer of or physical delivery of the Preferred Stock has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the Preferred Stock. If any shares of Preferred Stock called for redemption are converted prior to the date fixed for redemption, any money deposited with the Transfer Agent and/or the Depositary or segregated and held in trust for the redemption of such shares of Preferred Stock shall be paid or delivered to the Company upon its written request, or, if then held by the Company, shall be discharged from such trust. If the conditions precedent to the disbursement of any funds deposited by the Company pursuant to this Section 5 shall not have been satisfied within two years after the establishment of such funds, then (i) such funds shall be returned to the Company upon its request; (ii) the person entitled to the payment for which such funds shall have been originally intended shall have the right to look only to the Company for such payment, subject to applicable abandoned property laws; and (iii) the Transfer Agent and/or the Depositary which shall have held such funds shall be relieved of any responsibility for such funds upon the return of such funds to the Company. (h) If fewer than all the outstanding shares of Preferred Stock are to be redeemed, shares to be redeemed shall be selected by the Company from outstanding shares of Preferred Stock not previously called for redemption by lot or pro rata (as near as may be) or by any other equitable method determined by the Company in its sole discretion. If a portion of a holder's shares of Preferred Stock are selected for redemption pursuant to subsection (a) of this Section 5 and such holder elects to convert a portion of its shares of Preferred Stock into Common Stock pursuant to Section 7 prior to the date fixed for redemption, then such converted portion shall be deemed to be taken from the portion selected for redemption. -12- If fewer than all the shares of Preferred Stock represented by a certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof. (i) If notice of redemption has been given as above provided, and the Transfer Agent and the Depositary hold, in accordance with this Section 5, money sufficient to pay the redemption price of the shares of Preferred Stock called for redemption together with accrued and unpaid dividends to (but excluding) the date fixed for redemption, on and after the date fixed for redemption (unless the Company shall default in the payment of the redemption price, together with accrued and unpaid dividends to (but excluding) said date), dividends on such shares of Preferred Stock called for redemption shall cease to accrue and such shares of Preferred Stock shall be deemed no longer outstanding and the holders thereof shall have no right in respect of such shares of Preferred Stock except the right to receive the redemption price thereof and accrued and unpaid dividends to (but excluding) the date fixed for redemption, without interest thereon. On presentation and surrender of such shares of Preferred Stock via book entry transfer or physical delivery, such shares of Preferred Stock to be redeemed shall be redeemed by the Company at the applicable redemption price, together with payment of accrued and unpaid dividends to (but excluding) the date fixed for redemption. (j) If the Company shall default in the payment of the redemption price, together with accrued and unpaid dividends to (but excluding) the date fixed for redemption, of any shares of Preferred Stock called for redemption, upon surrender thereof for redemption, dividends shall continue to accrue from the date fixed for redemption and such shares of Preferred Stock shall remain outstanding and remain convertible into Common Stock until the Company pays the redemption price, together with accrued and unpaid dividends to (but excluding) the date of such payment. 6. REQUIRED PURCHASE AT OPTION OF HOLDER ON CHANGE IN CONTROL. (a) If there shall occur a Change in Control and the Company does not elect to exercise the right to redeem shares of Preferred Stock in whole pursuant to Section 5(b), shares of Preferred Stock shall be purchased by the Company, out of funds legally available therefor, at the option of the holders thereof as of the date (the "CHANGE IN CONTROL PURCHASE DATE") specified by the Company that is 45 calendar days (or if such day is not a Business Day, then the next succeeding Business Day) after the Company, or at its request, the Transfer Agent, has mailed written notice of such Change in Control to holders of the Preferred Stock as set forth below, subject to satisfaction by or on behalf of any holder of the requirements set forth below, for cash at a purchase price per share equal to 100% of the Liquidation Preference per share plus an amount equal to accrued and unpaid dividends, if any, to (but excluding) the Change in Control Purchase Date, whether or not declared. (b) Within 30 days after the effective date of the event or circumstance resulting in a Change in Control, the Company, or at its request the Transfer Agent, in the name of and at the expense of the Company, shall mail a written notice of the Change in Control to the holders of shares of Preferred Stock at their last addresses as the same appear on the Company's stock records and to the Beneficial Owners in accordance with the procedures established by the -13- Depositary and the Transfer Agent, as of the date of the Change in Control; provided that if the Company shall give such notice, it shall also give such notice to the Transfer Agent. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any share of Preferred Stock shall not affect the validity of the proceedings for the purchase of any other share of Preferred Stock. Concurrently with the mailing of any such notice of Change in Control, the Company shall (i) issue a press release announcing the Change in Control, (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York, and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release nor make such publications nor any defect therein shall affect the validity of the Change in Control notice or any of the proceedings for the purchase of any share of Preferred Stock. The notice shall include the form of a Change in Control Purchase Notice to be completed by the holder and a copy of any press release or other public announcement of the Change in Control event, and shall state: (i) that a Change in Control has occurred or may occur (including a description of the event or circumstance which has or may result in a Change in Control), and that, as a result, the holders of shares of Preferred Stock have certain purchase rights; (ii) the Change in Control Purchase Date; (iii) the date by which the Change in Control Purchase Notice pursuant to this Section 6 must be given; (iv) the purchase price that will be payable with respect to the shares of Preferred Stock as of the Change in Control Purchase Date, (v) that, on the Change in Control Purchase Date, if the Change in Control Purchase Notice is timely given, the purchase price of the Preferred Stock subject to such Change in Control Purchase Notice, together with accrued and unpaid dividends, if any, to (but excluding) the Change in Control Purchase Date, will become due and payable and dividends on such shares of Preferred Stock shall cease to accrue; (vi) the name and address of the Transfer Agent; (vii) the Conversion Price then in effect; (viii) that shares of Preferred Stock as to which a Change in Control Purchase Notice has been given may be converted into Common Stock only to the extent that the Change in Control Purchase Notice has been withdrawn in accordance with the terms of this Section 6; -14- (ix) the procedures that the holder of Preferred Stock must follow to exercise its rights under this Section 6; (x) the procedures for withdrawing a Change in Control Purchase Notice, including a form of notice of withdrawal; and (xi) that the Company's obligation to purchase the shares of the Preferred Stock may be subject to the consummation of the Change in Control event. If any of the Preferred Stock is in the form of a Global Certificate, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depositary and the Transfer Agent applicable to the purchase of shares represented by the Global Certificate. (c) A holder of shares of Preferred Stock may exercise its rights pursuant to this Section 6 upon delivery of a written notice (which shall be in substantially the form set forth in Section 15(c) which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of shares represented by a Global Certificate, may be delivered electronically or by other means in accordance with the Depositary's applicable procedures) of the exercise of such rights (a "CHANGE IN CONTROL PURCHASE NOTICE") to the Transfer Agent at any time prior to the close of business on the Business Day immediately before the Change in Control Purchase Date. Payment of the purchase price for shares of the Preferred Stock, together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date, is conditioned upon (i) timely delivery of a completed Change in Control Purchase Notice and (ii) book-entry transfer or physical delivery of certificates representing the shares of Preferred Stock, together with any necessary endorsements, to the Transfer Agent, or to the Transfer Agent's account at the Depositary, at any time after timely delivery of the Change in Control Purchase Notice. If a holder timely delivers its Change in Control Purchase Notice, payment of the purchase price for the Preferred Stock, together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date, will be made: (i) if book-entry transfer of or physical delivery of the Preferred Stock has been made by or on the Change in Control Purchase Date, on the Change in Control Purchase Date, or (ii) if book-entry transfer of or physical delivery of the Preferred Stock has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the Preferred Stock. (d) Notwithstanding anything herein to the contrary, any holder of Preferred Stock delivering to the Transfer Agent the Change in Control Purchase Notice shall have the right to withdraw such Change in Control Purchase Notice in whole or in part (provided such part is a share of Preferred Stock or an integral multiple thereof) at any time prior to the close of business on the Business Day immediately before the Change in Control Purchase Date (unless the Company shall default in the payment of the purchase price, together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date, in which case, such withdrawal shall be permitted until the Company pays the purchase price, together with accrued and unpaid dividends to (but excluding) the date of such payment) by delivery of a -15- written notice of withdrawal to the Transfer Agent in accordance with the provisions of this Section 6 specifying: (i) the number of shares of Preferred Stock, in whole shares, with respect to which such notice of withdrawal is being submitted; (ii) if certificated shares of Preferred Stock have been issued, the certificate numbers for such shares in respect of which such notice of withdrawal is being submitted, or if such shares are in the form of a Global Certificate, such information as is required by the Depositary; and (iii) the number of shares of Preferred Stock, if any, that remain subject to the original Change in Control Purchase Notice and have been or will be delivered for purchase by the Company. The Transfer Agent shall promptly notify the Company of the receipt by it of any Change in Control Purchase Notice or written withdrawal thereof. The Transfer Agent will promptly return to the respective holders thereof any shares of Preferred Stock with respect to which a Change in Control Purchase Notice has been withdrawn in compliance with this Section 6, in which case, upon such return, the Change in Control Purchase Notice with respect thereto shall be deemed to have been withdrawn. Any money deposited with the Transfer Agent or the Depositary or segregated and held in trust for the purchase of shares of Preferred Stock as to which a Change in Control Purchase Notice has been withdrawn in compliance with this Section 6 shall be paid or delivered to the Company upon its written request. (e) Anything herein to the contrary notwithstanding, in the case of shares of Preferred Stock held pursuant to a Global Certificate, any Change in Control Purchase Notice may be delivered or withdrawn and the shares of Preferred Stock in respect of such Global Certificate may be delivered for purchase or withdrawn in accordance with the applicable procedures of the Depositary as in effect from time to time. (f) The Company shall, on the Change in Control Purchase Date, before 12:00 p.m., New York City time, to the extent funds are legally available, with respect to: (i) all shares of Preferred Stock which are to be purchased pursuant to this Section 6 and are held by the Depositary or its nominees, deposit or cause to be deposited, irrevocably with the Transfer Agent or the Depositary an amount of money sufficient to pay the aggregate purchase price of all shares of Preferred Stock which are to be purchased pursuant to this Section 6 plus an amount equal to the accrued and unpaid dividends, if any, to (but excluding) the Change in Control Purchase Date, and shall give the Transfer Agent or the Depositary, as the case may be, irrevocable instructions and authority to pay such amount to holders of such shares of Preferred Stock upon book-entry transfer of such shares of Preferred Stock to the Transfer Agent's account at the Depositary; and (ii) all shares of Preferred Stock which are to be purchased pursuant to this Section 6 and are held in certificated form, deposit or cause to be deposited, irrevocably with the Transfer Agent an amount of money sufficient to pay the aggregate purchase price of all shares of Preferred Stock which are to be purchased pursuant to this Section 6 plus an amount equal to -16- the accrued and unpaid dividends, if any, to (but excluding) the Change in Control Purchase Date, and shall give the Transfer Agent irrevocable instructions and authority to pay such amount to holders of such shares of Preferred Stock upon surrender of the certificates evidencing such shares of Preferred Stock. The Company shall be entitled to retain any interest, yield or gain on funds deposited with the Transfer Agent and/or the Depositary pursuant to this Section 6 in excess of the amounts required to pay the purchase price, together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date. If the conditions precedent to the disbursement of any funds deposited by the Company pursuant to this Section 6 shall not have been satisfied within two years after the establishment of such funds, then (i) such funds shall be returned to the Company upon its request; (ii) the person entitled to the payment for which such funds shall have been originally intended shall have the right to look only to the Company for such payment, subject to applicable abandoned property laws; and (iii) the Transfer Agent and/or the Depositary which shall have held such funds shall be relieved of any responsibility for such funds upon the return of such funds to the Company. (g) If a Change in Control Purchase Notice has been given as provided above and has not been withdrawn pursuant to Section 6(d), and the Transfer Agent and the Depositary hold, in accordance with this Section 6, money sufficient to pay the purchase price of the shares of Preferred Stock to be purchased together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date, on and after the Change in Control Purchase Date (unless the Company shall default in the payment of the purchase price, together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date), dividends on such shares of Preferred Stock shall cease to accrue and such shares of Preferred Stock shall be deemed no longer outstanding and the holders thereof shall have no right in respect of such shares of Preferred Stock except the right to receive the purchase price thereof and accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date, without interest thereon. Shares of Preferred Stock in respect of which a Change in Control Purchase Notice has been given by the holder thereof may not be converted into shares of Common Stock on or after the date of the delivery of such Change in Control Purchase Notice unless such Change in Control Purchase Notice has first been validly withdrawn as specified in this Section 6. If the Change in Control Purchase Date falls after a Dividend Payment Record Date and before the corresponding Dividend Payment Date, holders of the shares of Preferred Stock at the close of business on that Dividend Payment Record Date shall be entitled to receive the full dividend payable on those shares on the corresponding Dividend Payment Date, and the amount payable to holders of such shares of Preferred Stock on the Change in Control Purchase Date will not include any amount in respect of dividends declared and payable on such corresponding Dividend Payment Date. (h) If fewer than all the shares of Preferred Stock represented by any certificate are purchased, a new certificate shall be issued representing the unpurchased shares without cost to the holder thereof. (i) The Company shall comply with any applicable provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act (including, without limitation, a filing on Schedule TO or other schedule) to the extent then applicable in connection with the purchase rights of the holders of the Preferred Stock pursuant to this Section 6. -17- (j) To the extent the Company has insufficient funds to purchase all shares of Preferred Stock for which the Transfer Agent has received a Change in Control Purchase Notice that has not subsequently been withdrawn, the shares to be purchased shall be selected by the Company from the shares of Preferred Stock for which the Transfer Agent has received a Change in Control Purchase Notice that has not subsequently been withdrawn by lot or pro rata (as near as may be) or by any other equitable method determined by the Company in its sole discretion. (k) The Company shall not be required to purchase any shares of Preferred Stock upon the occurrence of a Change in Control if a third party makes an offer to purchase the Preferred Stock in the manner, for the amount, at the times and otherwise in compliance with the requirements described in this Section 6 and purchases all shares of Preferred Stock for which the Transfer Agent has received a Change in Control Purchase Notice that has not subsequently been withdrawn. (l) If the Company shall default in the payment of the purchase price, together with accrued and unpaid dividends to (but excluding) the Change in Control Purchase Date, of any shares of Preferred Stock tendered for purchase, upon surrender thereof for purchase, dividends shall continue to accrue from the Change in Control Purchase Date, such shares of Preferred Stock shall remain outstanding and the Change in Control Purchase Notice in respect of such shares shall remain subject to withdrawal until the Company pays the purchase price, together with accrued and unpaid dividends to (but excluding) the date of such payment. 7. CONVERSION. Holders of shares of Preferred Stock shall have the right to convert all or a portion of such shares into shares of Common Stock, as follows: (a) Subject to and upon compliance with the provisions of this Section 7, a holder of shares of Preferred Stock shall have the right, at the holder's option, at any time after the Issue Date (except that, with respect to shares of Preferred Stock which shall be called for redemption pursuant to Section 5, such right shall terminate at the close of business on the Business Day immediately preceding the date fixed for redemption of such shares of Preferred Stock unless the Company shall default in payment of the amount due upon redemption thereof, in which case such right shall terminate upon payment of the amount due upon such redemption) to convert any of such shares into that number of fully paid and non-assessable shares of Common Stock (as such shares shall then be constituted) obtained by dividing $50 by the Conversion Price, as adjusted in accordance with this Section 7, by surrender of the shares of Preferred Stock so to be converted in the manner provided in Section 7(b). As used herein, the initial "CONVERSION PRICE" shall mean $20 per share. A holder of the Preferred Stock is not entitled to any rights of a holder of Common Stock until such holder has converted his, her or its Preferred Stock to Common Stock, and only to the extent such Preferred Stock is deemed to have been converted to Common Stock under this Section 7. (b) In order to exercise the conversion right, if the shares of Preferred Stock are held in certificated form, the holder of the Preferred Stock to be converted shall surrender the certificate or certificates (with a Conversion Notice, a form of which is set forth in -18- Section 15(a), duly completed) representing the number of shares to be so converted, duly endorsed, at the office or an agency of the Transfer Agent, and shall give written notice of conversion to the office or agency of the Transfer Agent that the holder elects to convert such number of shares of Preferred Stock specified in said notice. Such notice shall also state the name or names (with addresses) in which the certificate or certificates for shares of Common Stock which shall be issuable on such conversion shall be issued, and shall be accompanied by payment of any transfer taxes required pursuant to Section 7(f). Each such share of Preferred Stock surrendered for conversion shall, unless the shares of Common Stock issuable on conversion are to be issued in the same name in which such share of Preferred Stock is registered, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or his, her or its duly authorized attorney. In order to exercise the conversion right, if the shares of Preferred Stock are represented by a Global Certificate, the holder of the Preferred Stock to be converted shall comply with the procedures established by the Depositary for conversion. As promptly as practicable after satisfaction of the requirements for conversion set forth above, the Company shall issue and shall deliver to such holder or, if shares of Common Stock issuable on conversion are to be issued in a name other than that in which such shares of Preferred Stock to be converted are registered (as if such transfer were a transfer of the share of Preferred Stock so converted), to such other person, at the office or an agency of the Transfer Agent, the certificate or certificates representing the number of shares of Common Stock issuable upon the conversion of such shares of Preferred Stock in accordance with the provisions of this Section 7, and a check or cash in respect of any fractional share of Common Stock arising upon such conversion, as provided in Section 7(c) (which payment, if any, shall be paid no later than five Business Days after satisfaction of the requirements for conversion set forth above). Each conversion pursuant to Section 7(a) shall be deemed to have been effected on the date on which the requirements set forth above in this Section 7(b) or the requirements of the Depositary, as the case may be, have been satisfied as to such shares of Preferred Stock so converted, and the person in whose name any certificate or certificates for the shares of Common Stock is issuable upon such conversion shall be deemed to have become on said date the holder of record of the shares represented thereby; provided, however, that if any such surrender occurs on any date when the stock transfer books of the Company are closed, the conversion shall be effected on the next succeeding day on which such stock transfer books are open, and the person in whose name the certificates are to be issued shall be the record holder thereof on such date for all purposes, but such conversion shall be at the Conversion Price in effect on the date upon which certificate or certificates representing such shares of Preferred Stock shall be surrendered. In the case of any share of Preferred Stock which is converted after any Dividend Payment Record Date and prior to the close of business on the Business Day immediately preceding the corresponding Dividend Payment Date, the dividend due on such Dividend Payment Date shall be payable on such Dividend Payment Date to the holder of record of such share as of such Dividend Payment Record Date notwithstanding such conversion; provided that shares of Preferred Stock surrendered for conversion during the period between the -19- close of business on any Dividend Payment Record Date and prior to the close of business on the Business Day immediately preceding the corresponding Dividend Payment Date must (except in the case of shares of Preferred Stock which have been called for redemption and a notice of redemption has been sent to the holders of Preferred Stock pursuant to Section 5) be accompanied by payment of an amount equal to the dividend payable on such Dividend Payment Date on the shares of Preferred Stock being surrendered for conversion. The Transfer Agent shall not be required to accept for conversion any shares of Preferred Stock not accompanied by any payment required by the preceding sentence. Except as provided in this paragraph, no payment or adjustment shall be made upon any conversion on account of any dividends accrued on shares of Preferred Stock surrendered for conversion or on account of any dividends on the Common Stock issued upon conversion. (c) In connection with the conversion of any shares of Preferred Stock pursuant to Section 7(a), all or a portion of such holder's shares, in whole shares, may be converted; however, no fractional shares of Common Stock or scrip representing fractional shares shall be issued upon conversion of the Preferred Stock. If any fractional share of Common Stock otherwise would be issuable upon the conversion of the Preferred Stock, the Company shall make a payment therefor in cash to the holder of the Preferred Stock based on the then-current market value of a whole share of Common Stock. For purposes of this Section 7(c), the then-current market value of a whole share of Common Stock shall be the Closing Price of the Common Stock on the first Trading Day immediately preceding the day on which the Preferred Stock is deemed to have been converted and such Closing Price of the Common Stock shall be determined as provided in Section 7(i)(i). If more than one share shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Preferred Stock so surrendered. (d) The Conversion Price shall be adjusted from time to time by the Company as follows: (i) In the event the Company shall hereafter pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to all holders of Common Stock, the Conversion Price in effect at the opening of business on the Business Day immediately following the Record Date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Record Date and the denominator shall be the sum of such number of shares of Common Stock and the total number of shares of Common Stock constituting such dividend or other distribution. If any dividend or distribution of the type described in this Section 7(d)(i) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would have been in effect if such dividend or distribution had not been declared. (ii) In the event the Company shall issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them (for a period expiring within forty-five (45) days after the Record Date fixed for the determination of stockholders -20- entitled to receive such rights or warrants) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price of the Common Stock on the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price shall be reduced so that the Conversion Price shall equal the price determined by multiplying the Conversion Price in effect at the opening of business on the Business Day immediately following such Record Date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Record Date plus the number of shares of Common Stock which the aggregate subscription, purchase or exercise price of the shares of Common Stock called for by all such issued rights or warrants would purchase at such Current Market Price, and of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on such Record Date plus the total number of additional shares of Common Stock so offered for subscription or purchase. Such adjustment shall become effective at the opening of business on the Business Day immediately following the Record Date fixed for determination of stockholders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants, the Conversion Price shall be readjusted to the Conversion Price which would have been in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of only the number of shares of Common Stock actually delivered upon the issuance of such rights or warrants. In the event that such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than the Current Market Price, and in determining the aggregate subscription, purchase or exercise price of such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants, the value of such consideration, if other than cash, to be determined by the Board of Directors in its sole discretion. (iii) In the event the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the Business Day immediately following the day upon which such subdivision becomes effective shall be proportionately reduced, and conversely, in the event the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the Business Day immediately following the day upon which such combination becomes effective shall be proportionately increased. (iv) In the event the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the Company (other than any dividends or distributions to which Section 7(d)(i) applies) or evidences of its indebtedness, cash or other assets (including securities, but excluding (1) any rights or warrants referred to in Section 7(d)(ii) or (2) dividends and distributions paid exclusively in cash (such shares of capital stock, evidences of indebtedness, cash or other assets hereinafter in this Section 7(d)(iv) referred to as the "SECURITIES")), then, in each such case, the Conversion Price shall be reduced so that the Conversion Price shall be equal to the price determined by multiplying the -21- Conversion Price in effect immediately prior to the close of business on the Record Date with respect to such distribution by a fraction of which the numerator shall be the Current Market Price on such Record Date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) on such Record Date of the portion of the Securities so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective at the opening of business on the Business Day immediately following such Record Date; provided, however, that in the event the then fair market value (as so determined by the Board of Directors) of the portion of the Securities so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of the Preferred Stock shall have the right to receive upon conversion of a share of the Preferred Stock the amount of Securities such holder would have received had such holder converted such share of Preferred Stock immediately prior to such Record Date. In the event that such distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 7(d)(iv) by reference to the trading market for any securities comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period (the "REFERENCE PERIOD") used in computing the Current Market Price pursuant to Section 7(i)(ii) to the extent possible, unless the Board of Directors in a Board Resolution determines in good faith that determining the fair market value during the Reference Period would not be in the best interest of the holders of the Preferred Stock. For purposes of this Section 7(d)(iv) and Sections 7(d)(i) and (ii), any dividend or distribution to which this Section 7(d)(iv) is applicable that also includes shares of Common Stock to which Section 7(d)(i) applies, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 7(d)(ii) applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock to which Section 7(d)(i) applies or rights or warrants to which Section 7(d)(ii) applies (and any Conversion Price reduction required by this Section 7(d)(iv) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Price reduction required by Sections 7(d)(i) and (ii) with respect to such dividend or distribution shall then be made) except (A) the Record Date of such dividend or distribution shall be substituted as "the Record Date fixed for the determination of stockholders entitled to receive such dividend or other distribution" and "Record Date" within the meaning of Section 7(d)(i) and as "the Record Date fixed for the determination of the stockholders entitled to receive such rights or warrants" and "Record Date" within the meaning of Section 7(d)(ii), and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on such Record Date" within the meaning of Section 7(d)(i). In the event that the Company implements a stockholders' rights plan (a "NEW RIGHTS PLAN") or amends any then-existing stockholders' rights plan (as amended, an "AMENDED RIGHTS PLAN" and together with any New Rights Plan, a "RIGHTS -22- PLAN"), such Rights Plan shall provide that upon conversion of the Preferred Stock the holders will receive, in addition to the Common Stock issuable upon such conversion, the rights under such Rights Plan (notwithstanding the occurrence of an event causing such rights to separate from the Common Stock at or prior to the time of conversion), unless prior to conversion of the Preferred Stock the rights have expired, terminated or been redeemed. Any distribution of rights or warrants pursuant to the Rights Plan complying with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants for purposes of this Section 7(d). Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("TRIGGER EVENT") (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 7(d)(iv) (and no adjustment to the Conversion Price under this Section 7(d)(iv) will be required) until the occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase different securities, evidences of indebtedness or other assets or entitle the holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, then the occurrence of each such event shall be deemed, for purposes of this Section 7(d)(iv), to be the date of issuance and record date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or the occurrence of any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Price under this Section 7(d)(iv), (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution equal to the per share redemption or repurchase price received by a holder of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants) made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants all of which shall have expired or been terminated without exercise, the Conversion Price shall be readjusted as if such rights and warrants had never been issued. (v) In the event the Company shall, by dividend or otherwise, make a distribution to all holders of its Common Stock consisting exclusively of cash (excluding any dividend or distribution made in connection with the liquidation, dissolution or winding up of the Company and excluding any cash that is distributed upon a merger or consolidation to which Section 7(e) applies or as part of a distribution referred to in Section 7(d)(iv)) in an amount that when combined with all other distributions of cash to holders of its Common Stock (excluding any dividend or distribution made in connection with the liquidation, dissolution or winding up of the Company and excluding any cash that is distributed upon a merger or consolidation to which Section 7(e) applies or as part of a distribution referred to in Section 7(d)(iv)) in such calendar year exceeds on a per-share basis the greater of $0.50 per share or three percent (3%) of the Current Market Price on the date prior to the date of the declaration of -23- such distribution, then, immediately after the close of business on the Record Date with respect to such distribution, the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on such Record Date by a fraction (i) the numerator of which shall be equal to the Current Market Price on the Record Date less an amount equal to the quotient of (x) the aggregate amount of such distribution and (y) the number of shares of Common Stock outstanding on the Record Date and (ii) the denominator of which shall be equal to the Current Market Price on such Record Date. In the event that such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such dividend or distribution had not been declared. (vi) In the event a tender offer made by the Company or any Subsidiary for all or any portion of the Common Stock shall expire and such tender offer (as amended upon the expiration thereof) shall require the payment to stockholders of consideration (based on the acceptance (up to any maximum specified in the terms of the tender offer) of Purchased Shares (as defined below)) per share of Common Stock having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that, as of the date upon which occurred the last time tenders could have been made pursuant to such tender offer (the "EXPIRATION TIME"), exceeds the Closing Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time then, immediately prior to the opening of business on the Business Day immediately following the Expiration Time, the Conversion Price shall be reduced so that the Conversion Price shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date of the Expiration Time by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time multiplied by the Current Market Price on the Trading Day next succeeding the Expiration Time and the denominator shall be the sum of (x) the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "PURCHASED SHARES") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price on the Trading Day next succeeding the Expiration Time, such reduction (if any) to become effective at the opening of business on the Business Day immediately following the Expiration Time. In the event that the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such tender offer had not been made. If the application of this Section 7(d)(vi) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 7(d)(vi). (vii) In the event of a tender or exchange offer made by a person other than the Company or any Subsidiary for an amount of Common Stock which increases the offeror's ownership of Common Stock to more than 25% of the Common Stock outstanding and -24- shall involve the payment by such person of consideration per share of Common Stock having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a Board Resolution) at the last time (the "TENDER EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or exchange offer (as amended) that exceeds the Current Market Price on the Trading Day next succeeding the Tender Expiration Time, and with respect to which, as of the Tender Expiration Time, the Board of Directors is not recommending rejection of the offer, the Conversion Price shall be reduced so that the Conversion Price shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the Tender Expiration Time by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered or exchanged shares) as of the Tender Expiration Time multiplied by the Current Market Price on the Trading Day next succeeding the Tender Expiration Time and the denominator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Tender Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "TENDER PURCHASED SHARES") and (y) the product of the number of shares of Common Stock outstanding (less any Tender Purchased Shares) on the Tender Expiration Time and the Current Market Price on the Trading Day next succeeding the Tender Expiration Time, such reduction to become effective at the opening of business on the Business Day immediately following the Tender Expiration Time. In the event that such person is obligated to purchase shares pursuant to any such tender or exchange offer, but such person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such tender or exchange offer had not been made. Notwithstanding the foregoing, the adjustment described in this Section 7(d)(vii) shall not be made if, as of the Tender Expiration Time, the offering documents with respect to such tender offer or exchange offer disclose a plan or intention to cause the Company to consolidate with or merge with or into another person (whether or not affiliated with the Company) or permit any other person (whether or not affiliated with the Company) to consolidate with or merge with or into the Company (or enter into or permit successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties), or enter into any sale, lease, conveyance or transfer of all or substantially all of the assets of the Company (computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another person or group of affiliated persons (whether or not affiliated with the Company) and either: (i) in the case of a consolidation or merger, the Company is the resulting or surviving entity and each share of Preferred Stock shall remain outstanding and unaffected; or (ii) the resulting, surviving or transferee entity is a corporation organized under the laws of the United States, any state thereof or the District of Columbia and the Preferred Stock shall be converted into or exchanged for convertible exchangeable preferred stock of the corporation formed by such consolidation, or into which the Company shall have been merged, or of the corporation which shall have acquired or leased all or substantially all of the assets of the Company having powers, preferences and relative, participating, optional and other rights and qualifications, limitations and restrictions substantially similar to (but no less favorable than) the powers, preferences and relative, participating, optional and other rights and qualifications, limitations and restrictions of a share of the Preferred Stock as set forth in this Certificate of Designations. -25- (viii) The Company may make such reductions in the Conversion Price, in addition to those required by Sections 7(d)(i), (ii), (iii), (iv), (v), (vi), and (vii), as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes. (ix) To the extent permitted by applicable law, the Company from time to time may reduce the Conversion Price by any amount for any period of time if the period is at least twenty (20) Business Days, the reduction is irrevocable during the period and the Board of Directors shall have made a determination that such reduction is in the best interests of the Company, which determination shall be conclusive and described in a Board Resolution. Whenever the Conversion Price is reduced pursuant to the preceding sentence, the Company shall mail to each holder of the Preferred Stock at his, her or its last address appearing on the Company's stock records a notice of the reduction at least fifteen (15) days prior to the date the reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and the period during which it will be in effect. No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 7(d)(ix) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under Section 7 shall be made by the Company and shall be rounded to the nearest cent. No adjustment need be made for a change in the par value of the Common Stock or a change from par value to no par value or from no par value to par value. (x) Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly file with the Transfer Agent an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the date on which such adjustment becomes or became effective and shall mail such notice of such adjustment of the Conversion Price to each holder of the Preferred Stock at his, her or its last address appearing on the Company's stock records, within twenty (20) days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment. (xi) In any case in which this Section 7(d) provides that an adjustment shall become effective immediately after a Record Date for an event, the Company may defer until the occurrence of such event (i) issuing to the holder of any share of Preferred Stock converted after such Record Date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon conversion before giving effect to such adjustment and (ii) paying to such holder of Preferred Stock any amount in cash in lieu of any fractional shares of Common Stock pursuant to Section 7(c). -26- (xii) For purposes of this Section 7(d), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company, unless a dividend or distribution that requires an adjustment to the Conversion Price pursuant to this Section 7 is paid or made with respect to such treasury shares, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. (e) If any of the following events occur, namely (i) any reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which Section 7(d)(iii) applies or a change in par value), (ii) any consolidation, merger or combination of the Company with another person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, or (iii) any sale or conveyance of all or substantially all of the assets of the Company to any other person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then each share of Preferred Stock shall be convertible into the kind and amount of shares of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of the number of shares of Common Stock issuable upon conversion of such Preferred Stock (assuming, for such purposes, a sufficient number of authorized shares of Common Stock are available to convert all such Preferred Stock) immediately prior to such reclassification, change, consolidation, merger, combination, sale or conveyance assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 7(e) the kind and amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a plurality of the Non-Electing Shares). If this Section 7(e) applies to any event or occurrence, Section 7(d) shall not apply. The Company shall not be a party to any event or occurrence to which this Section 7(e) applies unless the terms of such event or occurrence are consistent with this Section 7(e). The above provisions of this Section shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances. (f) The issuance of stock certificates representing the shares of Common Stock issuable upon conversion of the Preferred Stock shall be made without charge to the holders of such shares for any issuance tax in respect thereof imposed by the government of the United States or any political subdivision thereof or other cost incurred by the Company in connection with such conversion and/or the issuance of such shares. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of Common Stock in any name other than the name in which the shares of -27- Preferred Stock with respect to which such shares of Common Stock are issued are registered, and the Company shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. (g) All shares of Common Stock which may be delivered upon conversion of shares of Preferred Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights. The Company will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued shares of Common Stock or its issued shares of Common Stock held in its treasury, or both, a sufficient number of shares of Common Stock for the purpose of effecting conversions of shares of Preferred Stock not theretofore converted into Common Stock. For purposes of this reservation of Common Stock, the number of shares of Common Stock which shall be deliverable upon the conversion of all outstanding shares of Preferred Stock shall be computed as if at the time of computation all outstanding shares of Preferred Stock were held by a single holder. The issuance of shares of Common Stock upon conversion of shares of Preferred Stock is authorized in all respects. The Company shall from time to time, in accordance with the laws of the State of Delaware, use its best efforts to increase the authorized number of shares of Common Stock if at any time the number of shares of authorized and unissued Common Stock shall not be sufficient to permit the conversion of all of the then outstanding shares of Preferred Stock. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Preferred Stock, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Price. If any shares of Common Stock to be provided for the purpose of conversion of the Preferred Stock hereunder require registration with or approval of any governmental authority under any Federal or state law before such shares may be validly issued upon conversion, the Company will, in good faith and as expeditiously as possible, endeavor to secure such registration or approval, as the case may be. If at any time the Common Stock shall be listed on the Nasdaq National Market or any national securities exchange or automated quotation system, the Company will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Preferred Stock. -28- (h) In the event: (i) the Company shall declare a dividend (or any other distribution) on its Common Stock; or (ii) the Company shall authorize the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class of the Company's capital stock or any other rights or warrants; or (iii) of any reclassification of the Common Stock (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (iv) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; the Company shall cause to be filed with the Transfer Agent and to be mailed to each holder of the Preferred Stock at his, her or its address appearing on the Company's stock records, as promptly as possible but in any event at least fifteen (15) days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or grant of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or grant is to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. (i) The following definitions shall apply to terms used in this Section 7 and elsewhere in this Certificate of Designations: (i) "CLOSING PRICE" with respect to any securities on any day shall mean the closing sale price regular way on such day or, in case no sale of such securities takes place on such day, the average of the reported closing bid and asked prices, regular way, in each case on the Nasdaq National Market or New York Stock Exchange, as applicable, or, if such security is not listed or admitted to trading on such Nasdaq National Market or New York Stock Exchange, on the principal national security exchange, trading market or quotation system on which such security is quoted or listed or admitted to trading, or, if not quoted or listed or admitted to trading on any national securities exchange, trading market or quotation system, the average of the closing bid and asked prices of such security on the over-the-counter market on such day as reported by the National Quotation Bureau Incorporated, or a similar generally -29- accepted reporting service, or if not so available, in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose, or a price determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution. (ii) "CURRENT MARKET PRICE" shall mean, subject to the second paragraph hereof, the lesser of (a) the Closing Price per share of Common Stock on the date in question and (b) the average of the daily Closing Prices per share of Common Stock for the ten (10) consecutive Trading Days immediately prior to the date in question; provided, however, that (1) if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 7(d)(i), (ii), (iii), (iv), (v), (vi), or (vii) occurs during such ten (10) consecutive Trading Days, the Closing Price per share of Common Stock for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price per share of Common Stock by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event, (2) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 7(d)(i), (ii), (iii), (iv), (v), (vi), or (vii) occurs on or after the "ex" date for the issuance or distribution requiring such computation and prior to the day in question, the Closing Price per share of Common Stock for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price per share of Common Stock by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event, and (3) if the "ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to clause (1) or (2) of this proviso, the Closing Price per share of Common Stock for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value (as determined by the Board of Directors in a manner consistent with any determination of such value for purposes of Section 7(d)(iv), (vi) or (vii) whose determination shall be conclusive and described in a Board Resolution) of the evidences of indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For purposes of any computation under Sections 7(d)(vi) or (vii), the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock for such day and the next two succeeding Trading Days; provided, however, that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 7(d)(i), (ii), (iii), (iv), (v), (vi), or (vii) occurs on or after the Expiration Time or the Tender Expiration Time, as the case may be, for the tender or exchange offer requiring such computation and prior to the day in question, the Closing Price per share of Common Stock for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price per share of Common Stock by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Price per share of Common Stock was obtained -30- without the right to receive such issuance or distribution, (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and (3) when used with respect to any tender or exchange offer means the first date on which the Common Stock trades regular way on such exchange or in such market after the Expiration Time or Tender Expiration Time, as the case may be, of such offer. Notwithstanding the foregoing, whenever successive adjustments to the Conversion Price are called for pursuant to Section 7(d), such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of Section 7(d) and to avoid unjust or inequitable results as determined in good faith by the Board of Directors. (iii) "FAIR MARKET VALUE" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction. (iv) "RECORD DATE" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise). (v) "TRADING DAY" shall mean (x) if the applicable security is quoted on the Nasdaq National Market, a day on which trades may be made thereon or (y) if the applicable security is listed or admitted for trading on the New York Stock Exchange or another national securities exchange or securities trading market, a day on which the New York Stock Exchange or such other national securities exchange or securities trading market is open for business or (z) if the applicable security is not so listed, admitted for trading or quoted, any Business Day. 8. RANKING. The Preferred Stock shall, with respect to dividend rights and rights upon the liquidation, winding-up or dissolution of the Company, rank (a) senior to all Junior Stock, (b) on parity with all Parity Stock and (c) junior to all Senior Stock. 9. VOTING RIGHTS. (a) The holders of the Preferred Stock will not have any voting rights except as set forth below or as otherwise from time to time required by law. In connection with any right to vote, each holder of the Preferred Stock will have one vote for each share of Preferred Stock held. Any shares of Preferred Stock held by the Company or any entity controlled by the Company shall not have voting rights hereunder and shall not be counted in determining the presence of a quorum. (b) Whenever dividends on the Preferred Stock or on any Parity Stock shall be in arrears in an aggregate amount equal to at least six quarterly dividends (whether or not consecutive), (i) the number of members of the Board of Directors shall be increased by two, -31- effective as of the time of election of such directors as hereinafter provided and (ii) the holders of the Preferred Stock (voting separately as a class with the holders of any Parity Stock on which like voting rights have been conferred and are exercisable) will have the exclusive right to vote for and elect such two additional directors of the Company at any meeting of stockholders of the Company at which directors are to be elected held during the period such dividends remain in arrears. The right of the holders of the Preferred Stock to vote for such two additional directors shall terminate when all accrued and unpaid dividends on the Preferred Stock and all other affected classes or series of Parity Stock have been declared and paid or set apart for payment. The holders of the Preferred Stock and the holders of any Parity Stock on which like voting rights have been conferred and are exercisable, voting separately as a class, shall have the right to remove without cause at any time and replace any directors which such holders shall have elected pursuant to this Section 9. If the office of any director elected by the holders of Preferred Stock and the holders of any Parity Stock on which like voting rights have been conferred and are exercisable, voting separately as a class, becomes vacant by reason of death, resignation, retirement, disqualification, removal from office or otherwise, the remaining director elected by the holders of Preferred Stock and the holders of any Parity Stock on which like voting rights have been conferred and are exercisable, voting separately as a class, may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. The term of office of all directors so elected shall terminate immediately upon the termination of the right of the holders of the Preferred Stock and the holders of any Parity Stock on which like voting rights have been conferred and are exercisable to vote for such directors, and the number of directors of the Board of Directors shall immediately thereafter be reduced by two. The Board of Directors shall determine, when and if required, to which class of directors such directors appointed by the holders of the Preferred Stock and the holders of any Parity Stock having like voting rights shall be appointed under the Certificate of Incorporation; provided, however, that if applicable, the term of such directors shall terminate earlier than the expiration of the terms provided for the applicable class or classes of directors if the right of the holders of Preferred Stock and the holders of any Parity Stock having like voting rights to appoint directors under this Section 9 terminates as provided herein. The foregoing right of the holders of the Preferred Stock with respect to the election of two directors may be exercised at any annual meeting of stockholders or at any special meeting of stockholders held for such purpose. If the right to elect directors shall have accrued to the holders of the Preferred Stock more than ninety (90) days preceding the date established for the next annual meeting of stockholders, the President of the Company shall, within twenty (20) days after the delivery to the Company at its principal office of a written request for a special meeting signed by the holders of at least 10% of all outstanding shares of Preferred Stock, call a special meeting of the holders of the Preferred Stock to be held within sixty (60) days after the delivery of such request for the purpose of electing such additional directors. (c) So long as the Preferred Stock is outstanding, the Company shall not, without the affirmative vote or consent of the holders of at least 66 2/3 percent (unless a higher percentage shall then be required by applicable law) of all outstanding shares of Preferred Stock and any Parity Stock on which like voting rights have been conferred and are exercisable, voting together as a separate class, (i) amend, alter or repeal any provision of the Certificate of -32- Incorporation (including, without limitation, this Certificate of Designations) or the By-laws of the Company so as to affect adversely the relative rights, preferences, qualifications, limitations or restrictions of the Preferred Stock, or (ii) create, authorize or issue, or reclassify any authorized capital stock of the Company into, or increase the authorized amount of, any Senior Stock. In addition, so long as the Preferred Stock is outstanding, the Company shall not, without the affirmative vote or consent of the holders of at least 66 2/3 percent (unless a higher percentage shall then be required by applicable law) of all outstanding shares of Preferred Stock and any Parity Stock on which like voting rights have been conferred and are exercisable, voting together as a separate class, enter into a share exchange pursuant to which the Preferred Stock would be exchanged for any other securities (except an exchange pursuant to Section 10) or consolidate with or merge with or into another person (whether or not affiliated with the Company) or permit any other person (whether or not affiliated with the Company) to consolidate with or merge with or into the Company, or enter into any sale, lease, conveyance or transfer of all or substantially all of the assets of the Company (computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another person or group of affiliated persons (whether or not affiliated with the Company) unless either: (A) in the case of a consolidation or merger, the Company is the resulting or surviving entity and each share of Preferred Stock shall remain outstanding and unaffected; or (B) the resulting, surviving or transferee entity is a corporation organized under the laws of the United States, any state thereof or the District of Columbia and the Preferred Stock shall be converted into or exchanged for convertible exchangeable preferred stock of the corporation formed by such consolidation, or into which the Company shall have been merged, or of the corporation which shall have acquired or leased all or substantially all of the assets of the Company having powers, preferences and relative, participating, optional and other rights and qualifications, limitations and restrictions substantially similar to (but no less favorable than) the powers, preferences and relative, participating, optional and other rights and qualifications, limitations and restrictions of a share of the Preferred Stock as set forth in this Certificate of Designations. A class vote of the holders of the Preferred Stock shall not be required (except as otherwise required by law or Board Resolution) in connection with (1) the authorization, issuance or increase in the authorized amount of any shares of Junior Stock or Parity Stock, when and if issued, including Common Stock; or (2) the authorization, issuance or increase in the amount of any bonds, mortgages, notes, debentures or other obligations of the Company (other than those that may be covered by clause (ii) of the first sentence of this paragraph). The holders of Preferred Stock shall also be entitled to vote on certain amendments or supplements to the Indenture establishing the Notes, for which the Preferred Stock may be exchanged, as described in Section 10 hereof, and provided in Section 11.2 of the Indenture. 10. EXCHANGE. (a) The Preferred Stock shall be exchangeable, in whole but not in part, at the option of the Company on any Dividend Payment Date beginning March 31, 2006 but prior to December 31, 2014, for the Notes at the rate of $50 principal amount of Notes for each share of Preferred Stock outstanding at the time of exchange. On the Exchange Date (as defined below), (i) the rights of holders of the Preferred Stock, as such, will terminate, and (ii) shares of -33- the Preferred Stock will be deemed to be no longer outstanding and will only represent the right to receive the Notes and payment of accrued and unpaid dividends, if any, to (but excluding) the Exchange Date (except in the event of a default by the Company or the Trustee in the delivery of the Notes or the failure to satisfy the conditions for exchange set forth in this Section 10), whether or not declared. The Notes will be issuable in denominations of $50 and integral multiples thereof. If the exchange results in an amount of Notes that is not an integral multiple of $50, the amount in excess of the closest integral multiple of $50 will be paid in cash by the Company. (b) In the event the Company shall elect to exercise the right to exchange the shares of Preferred Stock for the Notes pursuant to this Section 10, it shall fix a date for exchange which shall be a Dividend Payment Date (the "EXCHANGE DATE"), and it, or at its request, the Transfer Agent, in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such exchange at least thirty (30) and not more than sixty (60) days prior to the Exchange Date to the Trustee and the holders of the shares of Preferred Stock so to be exchanged at their last addresses as the same appear on the Company's stock records and to the Beneficial Owners in accordance with the procedures established by the Depositary and the Transfer Agent; provided that if the Company shall give such notice, it shall also give such notice to the Transfer Agent. Such mailing shall be by first class mail. If mailed in the manner herein provided, the exchange notice shall be conclusively presumed to have been duly given, whether or not the Trustee or the holders receive such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any share of Preferred Stock shall not affect the validity of the proceedings for the exchange of any other share of Preferred Stock. The Company will cause the Notes to be delivered to the Trustee in preparation for the exchange no later than five Business Days prior to the Exchange Date. Concurrently with the mailing of any such notice of exchange, the Company shall: (i) issue a press release announcing such exchange; (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York; and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release nor make such publications nor any defect therein shall affect the validity of the exchange notice or any of the proceedings for the exchange of any share of Preferred Stock. (c) Each such notice of exchange shall state: (i) the Company's election to exercise the right to exchange the shares of Preferred Stock for the Notes; (ii) a description of the Notes and the amount of Notes to be delivered in respect of the Preferred Stock, the place or places where certificates for shares of Preferred Stock are to be surrendered for exchange, including any procedures applicable to an exchange to be accomplished through book-entry transfers; (iii) the Exchange Date; and (iv) that dividends on the shares of Preferred Stock to be exchanged shall cease to accrue on the Exchange Date whether or not shares of Preferred Stock are surrendered for exchange on such Exchange Date via physical delivery or book-entry transfer, unless the Company or the Trustee shall default in the delivery of the Notes or the conditions for exchange set forth in this Section 10 have not been satisfied as of the Exchange Date, in which case dividends shall continue to accrue until the Company or the Trustee delivers the Notes or satisfies such conditions for exchange, as the case may be, in either -34- case accompanied by delivery of accrued and unpaid dividends to (but excluding) the date of delivery of the Notes or the satisfaction of such conditions for exchange, as the case may be. (d) If the Company exercises the right to exchange the shares of Preferred Stock for the Notes pursuant to this Section 10, delivery of the Notes together with accrued and unpaid dividends to (but excluding) the Exchange Date to the holders of the Preferred Stock to be exchanged is conditioned upon book-entry transfer or physical delivery of certificates representing the Preferred Stock, together with any necessary endorsements, to the Trustee at any time after delivery of the notice of the exchange. Delivery of the Notes will be made: (i) if book-entry transfer of or physical delivery of the Preferred Stock has been made by or on the Exchange Date, on the Exchange Date, or (ii) if book-entry transfer of or physical delivery of the Preferred Stock has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the Preferred Stock, in either case, via book-entry transfer or physical delivery, as the case may be. (e) If notice of exchange has been given as above provided, and the Trustee holds, in accordance with this Section 10, authenticated Notes in respect of the Preferred Stock to be exchanged together with money sufficient to pay accrued and unpaid dividends to (but excluding) the Exchange Date, and the Company has complied with the other provisions of this Section 10, on and after the Exchange Date: (i) the Company shall be the owner and record holder of such Preferred Stock; (ii) the holders of such Preferred Stock shall have no further rights with respect to the Preferred Stock other than the right to receive the Notes together with accrued and unpaid dividends to (but excluding) the Exchange Date without interest thereon, upon book-entry transfer or physical delivery of the Preferred Stock; (iii) dividends on the Preferred Stock to be exchanged will cease to accrue on the Exchange Date whether or not certificates for shares of Preferred Stock are surrendered for exchange on the Exchange Date; and (iv) the Depositary or its nominee, as the record holder of any Preferred Stock represented by one or more Global Certificates, will exchange the Global Certificate or Global Certificates representing the Preferred Stock for a global certificate or certificates representing the Notes to be delivered upon such exchange. In the event that the Company or the Trustee shall default in the delivery of the Notes together with accrued and unpaid dividends to (but excluding) the Exchange Date, or the conditions for exchange set forth in this Section 10 have not been satisfied as of the Exchange Date, dividends on the Preferred Stock will continue to accrue from the Exchange Date, the Preferred Stock shall remain outstanding and remain convertible into Common Stock until the Company delivers the Notes together with accrued and unpaid dividends to (but excluding) the date of such payment and, if applicable, the satisfaction of such conditions. (f) Notwithstanding the foregoing, if notice of exchange has been given pursuant to this Section 10 and any holder of shares of Preferred Stock shall, prior to the close of business on the Exchange Date, give written notice to the Company pursuant to Section 7 of the conversion of any or all of the shares held by the holder (with book-entry transfer of or physical delivery of the Preferred Stock duly endorsed or assigned to the Company), then the exchange shall not become effective as to the shares to be converted and the conversion shall become effective as provided in Section 7. -35- (g) Notwithstanding the other provisions of this Section 10, if on the Exchange Date (i) the Company has not paid all accrued dividends on the Preferred Stock (or set aside a sum therefor); (ii) the Notes shall not be listed or approved for listing upon issuance on the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, the American Stock Exchange or another similar national securities exchange or securities trading market; or (iii) the exchange shall result in an Event of Default (as defined in the Indenture) under the Indenture or an Event of Default under the Indenture shall have occurred and be continuing, the Company may not exchange the Preferred Stock for the Notes and any notice previously given pursuant to this Section 10 shall be of no effect. If the conditions to exercising the right to exchange the shares of Preferred Stock for the Notes pursuant to this Section 10 have not been satisfied as of the Exchange Date, the Company will be prohibited from making the exchange and the exchange will not be consummated. In such case, the Company will (i) issue a press release indicating that such conditions have not been satisfied and that the exchange will not be consummated, and (ii) publish such information on the Company's website on the World Wide Web. Thereafter, the Company again will have the right to exercise the exchange right in accordance with the provisions of this Section 10. (h) Prior to the Exchange Date, the Company will comply with any applicable securities and blue sky laws with respect to the exchange of the Preferred Stock for the Notes. (i) Dividends with respect to the shares of Preferred Stock to be exchanged which are due on the Dividend Payment Date which is the Exchange Date shall be payable to the holders of such shares of Preferred Stock registered as such on the relevant Dividend Payment Record Date subject to the terms and provisions of Section 3 and the amount payable to holders of such shares of Preferred Stock on the Exchange Date will not include any amount in respect of dividends declared and payable on such Dividend Payment Date. 11. RECORD HOLDERS. The Company and the Transfer Agent may deem and treat the record holder of any shares of Preferred Stock as the true and lawful owner thereof for all purposes and neither the Company nor the Transfer Agent shall be affected by any notice to the contrary. 12. SHARES TO BE RETIRED. Any share of Preferred Stock converted, redeemed, purchased or otherwise acquired by the Company shall be retired and canceled and shall upon cancellation be restored to the status of authorized but unissued shares of preferred stock, subject to reissuance by the Board of Directors as shares of preferred stock of one or more series. 13. NOTICE. Except as may otherwise be provided for herein, all notices referred to herein shall be in writing, and all notices hereunder shall be deemed to have been given upon receipt, in the case of a Change in Control Purchase Notice as contemplated in Section 6(c) or Conversion Notice as contemplated in Section 7(b) hereof, or, in all other cases, upon the earlier of receipt of such notice or three Business Days after the mailing of such notice if sent by registered mail (unless first-class mail shall be specifically permitted for such notice under the terms of this Certificate of Designations) with postage prepaid, addressed, if to the -36- Company, to its offices at 650 Poydras Street, New Orleans, Louisiana 70130, or to an agent of the Company designated as permitted by this certificate, or, if to any holder of the Preferred Stock, to such holder at the address of such holder of the Preferred Stock as listed in the Company's stock records or to such other address as the Company or holder, as the case may be, shall have designated by notice similarly given. 14. FORM OF CERTIFICATES; TRANSFER. (a) For so long as the shares of Preferred Stock are eligible for book-entry settlement with the Depositary or as book-entry settlement may be required by law, all shares of Preferred Stock that are so eligible shall be represented by one or more Preferred Stock certificates in global form (each, a "GLOBAL CERTIFICATE" and together, the "GLOBAL CERTIFICATES") registered in the name of the Depositary or the nominee of the Depositary, except as otherwise specified below. The transfer, conversion, redemption, purchase and exchange of beneficial interests in the Global Certificate shall be effected through the Depositary in accordance with this Certificate of Designations and the procedures of the Depositary therefor. Transfers of interests in a Global Certificate will be made in accordance with the standing instructions and procedures of the Depositary and its participants. The Transfer Agent shall make appropriate endorsements to reflect increases or decreases in the Global Certificate as set forth on the face of the Global Certificate to reflect any such transfers. Except as provided below, Beneficial Owners of an interest in a Global Certificate shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered holders of such Global Certificates. No definitive Preferred Stock certificate, or portion thereof, in respect of which the Company or an Affiliate of the Company holds a beneficial interest shall be included in a Global Certificate. The Transfer Agent shall issue Preferred Stock certificates in definitive form upon any transfer of a beneficial interest in any Global Certificate to the Company or any Affiliate of the Company. (b) Any Global Certificate may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Certificate of Designations as may be required by the Transfer Agent, the Depositary, a nominee of the Depositary, by the New York Stock Exchange or by the National Association of Securities Dealers, Inc. in order to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the shares of Preferred Stock may be listed or traded or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular shares of Preferred Stock are subject. (c) Notwithstanding any other provisions of this Certificate of Designations (other than the provisions set forth in this Section 14(c)), a Global Certificate may not be transferred in whole except (i) by the Depositary to a nominee of the Depositary, (ii) by a nominee of the Depositary to the Depositary, another nominee of the Depositary or to a -37- successor Depositary or (iii) by such a successor Depositary to a nominee of such successor Depositary. The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Certificates. Initially, the Global Certificate shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with a custodian for Cede & Co. If at any time (i) the Depositary for a Global Certificate notifies the Company that it is unwilling or unable to continue as Depositary for such Global Certificate and a successor Depositary for such Global Certificate is not appointed by the Company within 90 days after the Company receives such notice; (ii) the Depositary for a Global Certificate ceases to be a "clearing agency" registered under the Exchange Act and a successor Depositary for such Global Certificate is not appointed by the Company within 90 days; or (iii) the Company decides to discontinue the use of book-entry transfer through the Depositary or any successor Depositary, the Company shall execute, and shall cause the Transfer Agent to authenticate and deliver, Preferred Stock in certificated form, in an aggregate principal amount equal to the principal amount of the Global Certificate, in exchange for such Global Certificate. Preferred Stock in definitive form issued in exchange for all or a part of a Global Certificate pursuant to this Section 14 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 Transfer Agent. Upon execution and authentication, the Transfer Agent shall deliver such Preferred Stock in certificated form to the persons in whose names such Preferred Stock in definitive form are so registered. At such time as all interests in a Global Certificate have been redeemed, converted, exchanged, purchased or canceled for Preferred Stock in definitive form, or transferred to a transferee who receives Preferred Stock in definitive form, such Global Certificate shall be, upon receipt thereof, canceled by the Transfer Agent in accordance with standing procedures and instructions existing between the Transfer Agent and Depositary. At any time prior to such cancellation, if any interest in a Global Certificate is exchanged for Preferred Stock in certificated form, redeemed, converted, exchanged, repurchased by the Company or canceled, or transferred for part of a Global Certificate, the principal amount of such Global Certificate shall, in accordance with the standing procedures and instructions existing between the Transfer Agent and the Depositary, be reduced or increased, as the case may be, and an endorsement shall be made on such Global Certificate, by the Transfer Agent to reflect such reduction or increase. (d) Any Preferred Stock, or Common Stock issued upon the conversion of Preferred Stock, that is purchased or owned by the Company or any Affiliate thereof, may not be resold by the Company or such Affiliate unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction which results in such Preferred Stock or Common Stock, as the case may be, no longer being "restricted securities" (as defined under Rule 144 under the -38- Securities Act). Any such Preferred Stock or Common Stock issued in definitive form to the Company or any Affiliate thereof shall be endorsed with or have incorporated in the text thereof such legends or recitals as necessary to set forth the foregoing restrictions. 15. FORM OF NOTICE OF CONVERSION; FORM OF ASSIGNMENT; FORM OF CHANGE IN CONTROL PURCHASE NOTICE. (a) The following is a form of Conversion Notice to be set forth on the reverse of any Preferred Stock certificate: FORM OF CONVERSION NOTICE CONVERSION NOTICE To: _____________________________ The undersigned registered owner of 6.0% Convertible Exchangeable Preferred Stock, $1.00 par value per share (the "PREFERRED STOCK"), of International Shipholding Corporation, a Delaware corporation (the "COMPANY"), hereby irrevocably exercises the option to convert the Preferred Stock, or the portion hereof below designated, into shares of Common Stock of the Company in accordance with the terms of the Certificate of Designations, dated January 5, 2005, governing the Preferred Stock, and directs that the shares issuable and deliverable upon such conversion and any check in payment for fractional shares and any Preferred Stock representing any unconverted amount of shares hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares or any portion of the Preferred Stock not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Dated: __________________ __________________________________ __________________________________ Signature(s) Signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17AD-15 if shares of Common Stock are to be issued or Preferred Stock to be delivered other than to and in the -39- name of the registered holder of the Preferred Stock. Signature Guarantee NOTICE: The signature on the conversion notice must correspond with the name as written upon the face of the Preferred Stock certificate in every particular without alteration or enlargement or any change whatever. Fill in for registration of shares if to be issued, and Preferred Stock if to be delivered, other than to and in the name of the registered holder of the Preferred Stock: ________________________________ (Name) ________________________________ (Street Address) ________________________________ (City, State and Zip Code) Please print name and address Number of shares to be covered (if less than all):_____________________ ________________________________ Taxpayer Social Security or Other Identification Number:________________________ (b) The following is the form of Assignment to be set forth on the reverse of the Preferred Stock certificate: FORM OF ASSIGNMENT For value received_________hereby sell(s), assign(s) and transfer(s) unto_________ (Please insert social security or Taxpayer Identification Number of assignee) __________ shares of the 6.0% Convertible Exchangeable Preferred Stock, $1.00 par value per share (such shares, the "PREFERRED STOCK"), of International Shipholding Corporation, a Delaware corporation (the "COMPANY"), and hereby irrevocably -40- constitutes and appoints_________ attorney to transfer the Preferred Stock on the books of the Company, with full power of substitution in the premises. Unless the appropriate box below is checked, the undersigned confirms that the Preferred Stock is not being transferred to the Company or an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "AFFILIATE"). [ ] The transferee is an Affiliate of the Company. [ ] The transferee is the Company Dated: _________________ ___________________________ ___________________________ Signature(s) Signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17AD-15 if shares of Common Stock are to be issued or Preferred Stock to be delivered other than to and in the name of the registered holder. Signature Guarantee NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Preferred Stock certificate in every particular without alteration or enlargement or any change whatever. (c) The following is the form of Form of Change in Control Purchase Notice: FORM OF CHANGE IN CONTROL PURCHASE NOTICE To: _____________________________ The undersigned hereby irrevocably acknowledges receipt of a notice from International Shipholding Corporation, a Delaware corporation (the "COMPANY"), as to the occurrence of a Change in Control with respect to the Company and requests and instructs the -41- Company to purchase _____ shares of Preferred Stock in accordance with the terms of the Certificate of Designations of the Company, dated January 5, 2005, governing the Preferred Stock (the "CERTIFICATE OF DESIGNATIONS"), at a purchase price per share equal to 100% of the Liquidation Preference per share plus an amount equal to accrued and unpaid dividends, if any, to (but excluding) the Change in Control Purchase Date. The certificate number(s) of such share(s) is/are ____________ (include if the Preferred Stock is certificated). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Certificate of Designations. Dated: _______________ __________________________ __________________________ Signature(s) NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any change whatever. Aggregate Liquidation Preference to be purchased (if less than all): $___________________________________ ___________________________________ Social Security or Other Taxpayer Identification Number [SIGNATURES NEXT PAGE] -42- IN WITNESS WHEREOF, the Company has caused this Certificate to be signed and attested this 5th day of January, 2005. INTERNATIONAL SHIPHOLDING CORPORATION By: /s/ Erik F. Johnsen ----------------------------------- Name: Erik F. Johnsen Title: Chairman of the Board and Chief Executive Officer Attest: /s/ H. Hughes Grehan -------------------------------------- Name: H. Hughes Grehan Title: Assistant Secretary -43- EX-4.1 4 h21520exv4w1.txt INDENTURE DATED JANUARY 6, 2005 EXHIBIT 4.1 INTERNATIONAL SHIPHOLDING CORPORATION AND THE BANK OF NEW YORK AS TRUSTEE INDENTURE DATED AS OF JANUARY 6, 2005 6.0% CONVERTIBLE SUBORDINATED NOTES DUE 2014 TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINITIONS 1 Section 1.1 Definitions 1 ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES 8 Section 2.1 Designation, Amount and Issue of Notes 9 Section 2.2 Form of Notes 9 Section 2.3 Date and Denomination of Notes; Maturity; Payments of Interest 9 Section 2.4 Execution of Notes 11 Section 2.5 Exchange and Registration of Transfer of Notes 12 Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes 15 Section 2.7 Temporary Notes 16 Section 2.8 Cancellation of Notes Paid, Etc. 16 ARTICLE III REDEMPTION AND PURCHASE OF NOTES 16 Section 3.1 Redemption of Notes at Option of the Company 16 Section 3.2 Optional Redemption of Notes Upon a Change in Control 17 Section 3.3 Notice of Redemption; Selection of Notes 17 Section 3.4 Payment of Notes Called for Redemption by Company 20 Section 3.5 Reserved 21 Section 3.6 Required Purchase at Option of Holders Upon a Change in Control 21 ARTICLE IV SUBORDINATION OF NOTES 26 Section 4.1 Agreement of Subordination 26 Section 4.2 Payments to Noteholders 27 Section 4.3 Subrogation of Notes 29 Section 4.4 Authorization by Noteholders 30 Section 4.5 Notice to Trustee 30 Section 4.6 Trustee's Relation to Senior Indebtedness 31 Section 4.7 No Impairment of Subordination 31 Section 4.8 Certain Conversions Not Deemed Payment 31 Section 4.9 Article Applicable to Paying Agents 32 Section 4.10 Senior Indebtedness Entitled to Rely 32 ARTICLE V PARTICULAR COVENANTS OF THE COMPANY 32 Section 5.1 Payment of Principal, Premium and Interest 32 Section 5.2 Maintenance of Office or Agency 32 Section 5.3 Appointments to Fill Vacancies in Trustee's Office 33 Section 5.4 Provisions as to Paying Agent 33 Section 5.5 Existence 34
i Section 5.6 Restriction as to Dividends 34 Section 5.7 Stay, Extension and Usury Laws 34 Section 5.8 Compliance Certificate 35 Section 5.9 Further Instruments and Acts 35 ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE 35 Section 6.1 Noteholders' Lists 35 Section 6.2 Preservation and Disclosure of Lists 36 Section 6.3 Reports by Trustee 36 Section 6.4 Reports by Company 36 ARTICLE VII DEFAULTS AND REMEDIES 37 Section 7.1 Events of Default 37 Section 7.2 Payments of Notes on Default; Suit Therefor 39 Section 7.3 Application of Monies Collected by Trustee 41 Section 7.4 Proceedings by Noteholder 41 Section 7.5 Proceedings by Trustee 42 Section 7.6 Remedies Cumulative and Continuing 42 Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of Noteholders 42 Section 7.8 Notice of Defaults 43 Section 7.9 Undertaking to Pay Costs 43 Section 7.10 Delay or Omission Not Waiver 44 ARTICLE VIII CONCERNING THE TRUSTEE 44 Section 8.1 Duties and Responsibilities of Trustee 44 Section 8.2 Reliance on Documents, Opinions, Etc. 45 Section 8.3 Trustee's Disclaimer 46 Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes 46 Section 8.5 Monies to Be Held in Trust 46 Section 8.6 Compensation and Expenses of Trustee 46 Section 8.7 Officers' Certificate as Evidence 47 Section 8.8 Conflicting Interests of Trustee 47 Section 8.9 Eligibility of Trustee 47 Section 8.10 Resignation or Removal of Trustee 48 Section 8.11 Acceptance by Successor Trustee 49 Section 8.12 Succession by Merger, Etc. 49 Section 8.13 Limitation on Rights of Trustee as Creditor 50 ARTICLE IX CONCERNING THE NOTEHOLDERS 50 Section 9.1 Action by Noteholders 50 Section 9.2 Proof of Execution by Noteholders 50 Section 9.3 Who Are Deemed Absolute Owners 51 Section 9.4 Company-Owned Notes Disregarded 51
ii Section 9.5 Revocation of Consents; Future Holders Bound 51 ARTICLE X NOTEHOLDERS' MEETINGS 52 Section 10.1 Purpose of Meetings 52 Section 10.2 Call of Meetings by Trustee 52 Section 10.3 Call of Meetings by Company or Noteholders 53 Section 10.4 Qualifications for Voting 53 Section 10.5 Regulations 53 Section 10.6 Voting 53 Section 10.7 No Delay of Rights by Meeting 54 ARTICLE XI SUPPLEMENTAL INDENTURES 54 Section 11.1 Supplemental Indentures Without Consent of Noteholders 54 Section 11.2 Supplemental Indentures with Consent of Noteholders 55 Section 11.3 Effect of Supplemental Indentures 56 Section 11.4 Notation on Notes 57 Section 11.5 Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee 57 ARTICLE XII MERGER, SALE OR CONSOLIDATION 57 Section 12.1 Limitation on Merger, Sale or Consolidation 57 Section 12.2 Successor Corporation to Be Substituted 57 ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE 58 Section 13.1 Discharge of Indenture 58 Section 13.2 Deposited Monies to Be Held in Trust by Trustee 59 Section 13.3 Paying Agent to Repay Monies Held 59 Section 13.4 Return of Unclaimed Monies 59 Section 13.5 Reinstatement 59 ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS 60 Section 14.1 Indenture and Notes Solely Corporate Obligations 60 ARTICLE XV CONVERSION OF NOTES 60 Section 15.1 Holder's Right to Convert 60 Section 15.2 Exercise of Conversion Right; Issuance of Common Stock on Conversion; No Adjustment for Interest or Dividends 60 Section 15.3 Cash Payments in Lieu of Fractional Shares 62 Section 15.4 Conversion Price 62 Section 15.5 Adjustment of Conversion Price 62 Section 15.6 Reclassification, Consolidation, Merger or Sale 70 Section 15.7 Taxes on Shares Issued 71 Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Listing of Common Stock 72 Section 15.9 Responsibility of Trustee 73
iii Section 15.10 Notice to Holders Prior to Certain Actions 73 ARTICLE XVI MISCELLANEOUS PROVISIONS 74 Section 16.1 Provisions Binding on Company's Successors 74 Section 16.2 Official Acts by Successor Corporation 74 Section 16.3 Addresses for Notices, Etc. 75 Section 16.4 Governing Law 74 Section 16.5 Evidence of Compliance with Conditions Precedent; Certificates to Trustee 75 Section 16.6 Legal Holidays 75 Section 16.7 No Security Interest Created 75 Section 16.8 Trust Indenture Act 75 Section 16.9 Benefits of Indenture 76 Section 16.10 Table of Contents, Headings, Etc. 76 Section 16.11 Authenticating Agent 76 Section 16.12 Execution in Counterparts 77
iv CROSS REFERENCE SHEET* Between Provisions of Trust Indenture Act of 1939 and Indenture, dated as of January 6, 2005, between International Shipholding Corporation and The Bank of New York, as Trustee, providing for the 6.0% Convertible Subordinated Notes Due 2014:
SECTION OF SECTION OF THE ACT INDENTURE - ------------------ --------- 310(a)(1) and (2) 8.9 310(a)(3) and (4) Inapplicable 310(b) 8.8 and 8.10(b) and (d) 310(c) Inapplicable 311(a) 8.13 311(b) 8.13 311(c) Inapplicable 312(a) 6.1 and 6.2(a) 312(b) 6.2(b) 312(c) 6.2(c) 313(a) 6.3(a) 313(b)(1) Inapplicable 313(b)(2) 6.3(a) 313(c) 6.3(a) 313(d) 6.3(b) 314(a) 6.4 314(b) Inapplicable 314(c)(1) and (2) 16.5 314(c)(3) Inapplicable 314(d) Inapplicable 314(e) 16.5 314(f) Inapplicable 315(a), (c) and (d) 8.1 315(b) 7.8 315(e) 7.9 316(a)(1) 7.7 316(a)(2) Inapplicable 316(a)(last sentence) 9.4 316(b) 11.2 317(a) 7.2 317(b) 5.4 and 13.2 318(a) 16.8
v INDENTURE INDENTURE, dated as of January 6, 2005, between International Shipholding Corporation, a Delaware corporation (hereinafter sometimes called the "Company," as more fully set forth in Section 1.1), and The Bank of New York, a state banking corporation organized and existing under the laws of the State of New York, as trustee (hereinafter sometimes called the "Trustee", as more fully set forth in Section 1.1). WITNESSETH: WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of its 6.0% Convertible Subordinated Notes Due 2014 (hereinafter sometimes called the "Notes"), in an aggregate principal amount not to exceed $44,000,000 and, to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and WHEREAS, the Notes, the certificate of authentication to be borne by the Notes, a form of assignment, and a form of conversion notice to be borne by the Notes are to be substantially in the forms hereinafter provided for; and WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and to constitute these presents a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized. NOW, THEREFORE, THIS INDENTURE WITNESSETH: That in order to declare the terms and conditions upon which the Notes are to be authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Notes (except as otherwise provided below), as follows: ARTICLE I DEFINITIONS SECTION 1.1 DEFINITIONS. Each of the terms defined in this Section 1.1 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.1. Each of the terms used in this Indenture, which are defined in the Trust Indenture Act or which are by reference therein defined in the Securities Act (except as herein otherwise expressly provided or unless the context otherwise requires) shall have the meanings assigned to such term in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this Indenture. The words "herein," "hereof," "hereunder," and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subdivision. The terms defined in this Article include the plural as well as the singular. AFFILIATE. The term "Affiliate" of any specified person shall mean any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control," when used with respect to any specified person means the power to direct or cause the direction of the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. AMENDED RIGHTS PLAN. The term "Amended Rights Plan" shall have the meaning specified in Section 15.5(d). BENEFICIAL OWNER. The term "Beneficial Owner" means the person in whose name a Note is recorded as beneficial owner of such Note by the Depositary, or by any participant or indirect participant in the Depositary, as the case may be. BOARD OF DIRECTORS. The term "Board of Directors" shall mean the Board of Directors of the Company or a committee of such Board duly authorized to act for it hereunder. BOARD RESOLUTION. The term "Board Resolution" shall mean a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. BUSINESS DAY. The term "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which the banking institutions in The City of New York, New York or the city in which the Corporate Trust Office is located are authorized or obligated by law or executive order to close or be closed. CHANGE IN CONTROL. A "Change in Control" shall be deemed to have occurred at the time, after the Exchange Date, (i) that any person or group of persons (within the meaning of Sections 13(d) or 14(a) of the Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Commission under the Exchange Act) of 50% or more of the voting capital stock of the Company; or (ii) within a period of twelve (12) consecutive calendar months, individuals who were directors of the Company on the first day of such period (together with any new directors whose election to the Board of Directors, or whose nomination for election, was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) shall cease to constitute a majority of the Board of Directors. 2 CHANGE IN CONTROL PURCHASE DATE. The term "Change in Control Purchase Date" shall have the meaning specified in Section 3.6(a). CHANGE IN CONTROL PURCHASE NOTICE. The term "Change in Control Purchase Notice" shall have the meaning specified in Section 3.6(c). CLOSING PRICE. The term "Closing Price" shall have the meaning specified in Section 15.5(h)(1). COMMISSION. The term "Commission" shall mean the Securities and Exchange Commission. COMMON STOCK. The term "Common Stock" shall mean the class of capital stock of the Company designated as Common Stock, par value $1.00 per share, at the date hereof. Subject to the provisions of Section 15.6, shares issuable on conversion of Notes shall include only shares of such class or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company and which are not subject to redemption by the Company; provided that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable on conversion of Notes shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. COMPANY. The term "Company" shall mean International Shipholding Corporation, a Delaware corporation and, subject to the provisions of Article XII, shall include its successors and assigns. CONVERSION PRICE. The term "Conversion Price" shall have the meaning specified in Section 15.4. CORPORATE TRUST OFFICE. The term "Corporate Trust Office," or other similar term, shall mean the office of the Trustee at which at any particular time its corporate trust business as it relates to this Indenture shall be principally administered, which office is, at the date as of which this Indenture is dated, located at 10161 Centurion Parkway, 2nd Floor, Jacksonville, Florida 32256, Attention: William Cardozo (International Shipholding Corporation, 6.0% Convertible Subordinated Notes Due 2014). CURRENT MARKET PRICE. The term "Current Market Price" shall have the meaning specified in Section 15.5(h)(2). CUSTODIAN. The term "Custodian" shall mean The Bank of New York, as custodian with respect to the Notes in global form, or any successor entity thereto. DEFAULT. The term "default" shall mean any event that is, or after notice or passage of time, or both, would be, an Event of Default. 3 DEFAULTED INTEREST. The term "Defaulted Interest" shall have the meaning specified in Section 2.3. DEPOSITARY. The term "Depositary" shall mean, with respect to the Notes issuable or issued in whole or in part in global form, the person specified in Section 2.5(d) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, "Depositary" shall mean or include such successor. EVENT OF DEFAULT. The term "Event of Default" shall mean any event specified in Section 7.1 continued for the period of time, if any, and after the giving of notice, if any, therein designated. EXCHANGE ACT. The term "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. EXCHANGE DATE. The term "Exchange Date" shall mean the date on which the Notes are issued in exchange for all of the outstanding shares of Preferred Stock. "EX" DATE. The term "ex" date shall have the meaning specified in Section 15.5(h)(2). EXPIRATION TIME. The term "Expiration Time" shall have the meaning specified in Section 15.5(f). FAIR MARKET VALUE. The term "fair market value" shall have the meaning specified in Section 15.5(h)(3). GLOBAL NOTE. The term "Global Note" shall have the meaning specified in Section 2.5(b). INDEBTEDNESS. The term "Indebtedness" shall mean, with respect to any person, all obligations, whether or not contingent, of such person (i) (a) for borrowed money, whether or not evidenced by a note, Note, bond, or other written instrument, (b) evidenced by a note, Note, bond or other written instrument, (c) under a lease required to be capitalized on the balance sheet of the lessee under generally accepted accounting principles or under any lease or related document (including a purchase agreement) that provides that the lessee is contractually obligated to purchase or cause a third party to purchase and thereby guarantee a minimum residual value of the leased property to the lessor and the obligations of the lessee under such lease or related document to purchase or to cause a third party to purchase such leased property, (d) in respect of letters of credit, bank guarantees or bankers' acceptances (including reimbursement obligations with respect to any of the foregoing), (e) with respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance, charge or adverse claim affecting title or an encumbrance to which the property or assets of such person are subject, whether or not the obligation secured thereby shall have been assumed by or shall otherwise be such person's legal liability, (f) in respect of the balance of deferred and unpaid purchase price of any property or assets, (g) under interest rate or 4 currency swap agreements, cap, floor and collar agreements, spot and forward contracts and similar agreements and arrangements; (ii) with respect to any obligation of others of the type described in the preceding clause (i) or under clause (iii) below assumed by or guaranteed in any manner by such person or in effect guaranteed by such person through an agreement to purchase (including, without limitation, "take or pay" and similar arrangements), contingent or otherwise (and the obligations of such person under any such assumptions, guarantees or other such arrangements); and (iii) any and all Indebtedness constituting deferrals, renewals, extensions, refinancings and refundings of, or amendments, modifications or supplements to, any of the foregoing. INDENTURE. The term "Indenture" shall mean this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented. MATURITY DATE. The term "Maturity Date" shall mean December 31, 2014. NEW RIGHTS PLAN. The term "New Rights Plan" shall have the meaning specified in Section 15.5(d). NON-ELECTING SHARE. The term "non-electing share" shall have the meaning specified in Section 15.6. NOTE OR NOTES. The terms "Note" or "Notes" shall mean any Note or Notes, as the case may be, authenticated and delivered under this Indenture. NOTEHOLDER; HOLDER. The terms "Noteholder" or "holder" as applied to any Note, or other similar terms (but excluding the term "beneficial holder"), shall mean any person in whose name at the time a particular Note is registered on the Note register. NOTE REGISTER. The term "Note register" shall have the meaning specified in Section 2.5. NOTE REGISTRAR. The term "Note registrar" shall have the meaning specified in Section 2.5(a). OFFICERS' CERTIFICATE. The term "Officers' Certificate," when used with respect to the Company, shall mean a certificate signed by (a) one of the President, the Chief Executive Officer, Executive or Senior Vice President, any Vice President (whether or not designated by a number or numbers or word or words added before or after the title "Vice President") or the Chief Financial Officer and (b) by one of the Treasurer or any Assistant Treasurer, Secretary or any Assistant Secretary, or the Controller of the Company, which is delivered to the Trustee. Each such certificate shall include the statements provided for in Section 16.5 if and to the extent required by the provisions of such Section. OPINION OF COUNSEL. The term "Opinion of Counsel" shall mean an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or other counsel acceptable to the Trustee, which is delivered to the Trustee. Each such opinion shall 5 include the statements provided for in Section 16.5 if and to the extent required by the provisions of such Section. OUTSTANDING. The term "outstanding," when used with reference to Notes, shall, subject to the provisions of Section 9.4, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except (a) Notes theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Notes, or portions thereof, for the payment, redemption or purchase of which monies in the necessary amount shall have been deposited in trust pursuant hereto 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 that if such Notes are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Section 3.3, or provision satisfactory to the Trustee shall have been made for giving such notice; and provided further that if such Notes are to be purchased prior to the maturity thereof in connection with a Change in Control, a Change in Control Purchase Notice shall have been received as provided in Section 3.6. (c) Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.6 unless proof satisfactory to the Trustee is presented that any such Notes are held by bona fide holders in due course; and (d) Notes converted into Common Stock pursuant to Article XV and Notes deemed not outstanding pursuant to Section 3.4 or 3.6. PAYMENT BLOCKAGE NOTICE. The term "Payment Blockage Notice" has the meaning specified in Section 4.2(b). PERSON. The term "person" shall mean a corporation, a limited liability company, an association, a partnership, an individual, a joint venture, a joint stock company, a trust, an unincorporated organization or any other entity or organization, including a government or an agency, instrumentality or political subdivision thereof. PREDECESSOR NOTE. The term "Predecessor Note" of any particular Note shall mean every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the lost, destroyed or stolen Note that it replaces. PREFERRED STOCK. The term "Preferred Stock" shall mean the 6.0% Convertible Exchangeable Preferred Stock of the Company. PURCHASED SHARES. The term "Purchased Shares" shall have the meaning specified in Section 15.5(f). 6 RECORD DATE. The term "Record Date" shall have the meaning specified in Section 15.5(h)(4). REFERENCE PERIOD. The term "Reference Period" shall have the meaning specified in Section 15.5(d). REPRESENTATIVE. The term "Representative" means the (a) indenture trustee or other trustee, agent or representative for any Senior Indebtedness or (b) with respect to any Senior Indebtedness that does not have any such trustee, agent or other representative, (i) in the case of such Senior Indebtedness issued pursuant to an agreement providing for voting arrangements as among the holders or owners of such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting with the consent of the required persons necessary to bind such holders or owners of such Senior Indebtedness and (ii) in the case of all other such Senior Indebtedness, the holder or owner of such Senior Indebtedness. RESPONSIBLE OFFICER. The term "Responsible Officer", when used with respect to the Trustee, shall mean an officer of the Trustee assigned to the Corporate Trust Office, and any officer of the Trustee to whom such matter is referred to because of his, her or its knowledge of and familiarity with the particular subject. RIGHTS PLAN. The term "Rights Plan" shall have the meaning specified in Section 15.5(d). RULE 144. The term "Rule 144" shall mean Rule 144 as promulgated under the Securities Act. SECURITIES. The term "Securities" shall have the meaning specified in Section 15.5(d). SECURITIES ACT. The term "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. SENIOR INDEBTEDNESS. The term "Senior Indebtedness" means the principal of, premium, if any, and interest on any Indebtedness of the Company (including, without limitation, any interest accruing after the filing of a petition by or against the Company under any bankruptcy law, whether or not allowed as a claim after such filing in any proceeding under such bankruptcy law), or any other payment of Indebtedness, whether outstanding on the date of this Indenture or thereafter created, incurred, assumed, guaranteed or in effect guaranteed by the Company (including all deferrals, renewals, extensions or refundings of, or amendments, modifications or supplements to the foregoing); provided, however, that Senior Indebtedness does not include (i) Indebtedness evidenced by the Notes, (ii) any liability for federal, state, local or other taxes owed or owing by the Company, (iii) Indebtedness of the Company to any Subsidiary, (iv) any trade payables of the Company incurred in the ordinary course of its business, and (v) any indebtedness in which the instrument creating or evidencing the same or the assumption or guarantee thereof expressly provides that such Indebtedness shall not be senior in right of payment to, or is pari passu with, or subordinated or junior to, the Notes. 7 SUBSIDIARY. The term "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. TENDER EXPIRATION TIME. The term "Tender Expiration Time" shall have the meaning specified in Section 15.5(g). TENDER PURCHASED SHARES. The term "Tender Purchased Shares" shall have the meaning specified in Section 15.5(g). TRADING DAY. The term "Trading Day" has the meaning specified in Section 15.5(h)(5). TRANSFER AGENT. The term "Transfer Agent" means American Stock Transfer & Trust Company or such other agent or agents of the Company as may be designated by the Board of Directors as the transfer agent for the Preferred Stock. TRIGGER EVENT. The term "Trigger Event" shall have the meaning specified in Section 15.5(d). TRUST INDENTURE ACT. The term "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture, except as provided in Sections 11.3 and 15.6; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term "Trust Indenture Act" shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939 as so amended. TRUSTEE. The term "Trustee" shall mean The Bank of New York and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at the time serving as successor trustee hereunder. UNDERWRITER. The term "Underwriter" shall mean Ferris, Baker Watts, Incorporated. ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES SECTION 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES. The Notes shall be designated as "6.0% Convertible Subordinated Notes Due 2014." Notes not to exceed the aggregate principal amount of $40,000,000 (or $44,000,000 if the over-allotment option set forth in Section 1 of the Underwriting Agreement dated December 29, 2004 (as amended from time to time by the parties thereto) by and between the Company and the Underwriter is exercised in full) (except pursuant 8 to Sections 2.5, 2.6, 3.3 and 15.2) upon the execution of this Indenture, or from time to time thereafter, may be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes upon the written order of the Company, signed by the Company's (a) President, Chief Executive Officer, Executive or Senior Vice President, any Vice President (whether or not designated by a number or numbers or word or words added before or after the title "Vice President") or Chief Financial Officer and (b) Treasurer or Assistant Treasurer or its Secretary or any Assistant Secretary, without any further action by the Company hereunder; provided, however, that said Notes may not be executed, delivered or authenticated unless and until (i) the Company may legally issue said Notes in accordance with the Delaware General Corporation Law, as amended, and (ii) the Trustee shall have received an Officer's Certificate and Opinion of Counsel in accordance with Section 16.5. The Notes may only be issued upon the exchange of all outstanding Preferred Stock. SECTION 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of authentication to be borne by such Notes shall be substantially in the form set forth in Exhibit A, which is incorporated in and made a part of this Indenture. Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage. Any Global Note shall represent such of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the holder of such Notes in accordance with this Indenture. Payment of principal of and interest and premium, if any (including any redemption or purchase price), on any Global Note shall be made to the holder of such Note. The terms and provisions contained in the form of Note attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. SECTION 2.3 DATE AND DENOMINATION OF NOTES; MATURITY; PAYMENTS OF INTEREST. The Notes shall be issuable in registered form without coupons in denominations of $50 principal amount and integral multiples thereof equal to the number of shares of Preferred Stock for which the Notes are exchanged. Every Note shall be dated the date of its authentication and, except as provided in this Section, shall bear interest at the annual rate of 6.0%, payable quarterly on 9 March 31, June 30, September 30 and December 31 of each year, commencing on the first such date after the Exchange Date, from the most recent date to which interest has been paid or duly provided for, or if no interest has been paid or duly provided for on the Notes, from the Exchange Date, until payment of the principal sum has been made or fully provided for. The Notes will mature on the Maturity Date, regardless of the Exchange Date, unless earlier converted, redeemed or purchased. Notwithstanding the foregoing, when there is no existing default in the payment of interest on the Notes, all Notes authenticated by the Trustee after the close of business on the record date (as defined in this Section 2.3) for any interest payment date (each March 31, June 30, September 30 and December 31 after the Exchange Date, as the case may be) and prior to such interest payment date shall be dated the date of authentication but shall bear interest from such interest payment date; provided, however, that if and to the extent that the Company shall default in interest due on such interest payment date then any such Note shall bear interest from the next preceding March 31, June 30, September 30 and December 31, as the case may be, to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for on the Notes, from the Exchange Date. The person in whose name any Note (or its Predecessor Note) is registered at the close of business on any record date with respect to any interest payment date (including any Note that is converted after the record date and on or before the interest payment date) shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Note upon any transfer, exchange or conversion subsequent to the record date and on or prior to such interest payment date. Interest may, at the option of the Company, be paid by check mailed to the address of such person on the registry kept for such purposes; provided that, with respect to any holder of Notes with an aggregate principal amount equal to or in excess of $2,000,000, at the request of such holder in writing to the Company, interest on such holder's Notes shall be paid by wire transfer in immediately available funds in accordance with the wire transfer instruction supplied by such holder to the Trustee and paying agent (if different from Trustee). Interest payable with respect to Notes held in the form of a Global Note shall be paid to the Depositary by wire transfer in immediately available funds in accordance with the applicable procedures of the Depositary. The term "record date" with respect to any interest payment date shall mean March 11, June 10, September 10 and December 11 of each year, as the case may be. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. Any interest on any Note which is payable, but is not punctually paid or duly provided for, on each March 31, June 30, September 30 and December 31 after the Exchange Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Noteholder on the relevant record date by virtue of his, her or it having been such Noteholder; and such Defaulted Interest shall be paid by the Company, at its election in each case, as provided in clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the persons in whose names the Notes (or their respective Predecessor Notes) 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 10 Trustee in writing of the amount of Defaulted Interest to be paid on each Note and the date of the payment (which shall be not less than twenty-five (25) days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount 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 be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment and not less than ten (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 Noteholder as of such special record date at his, her or its address as it appears in the Note register, not less than ten (10) days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so mailed, such Defaulted Interest shall be paid to the persons in whose names the Notes (or their respective Predecessor Notes) were registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. SECTION 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name and on behalf of the Company by the facsimile signature of its President, its Chief Executive Officer, any of its Executive or Senior Vice Presidents, or any of its Vice Presidents (whether or not designated by a number or numbers or word or words added before or after the title "Vice President") and attested by the manual or facsimile signature of its Secretary or any of its Assistant Secretaries (which may be printed, engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Note attached as Exhibit A hereto, manually executed by the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 16.11), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. In case any officer of the Company who shall have signed any of the Notes shall cease to be such officer before the Notes so signed shall have been authenticated and delivered by the 11 Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer. SECTION 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES. (a) The Company shall cause to be kept at the Corporate Trust Office or other office of the Trustee or its Affiliate a register (the register maintained in such office and in any other office or agency of the Company designated pursuant to Section 5.2 being herein sometimes collectively referred to as the "Note register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time. The Trustee is hereby initially appointed "Note registrar" for the purpose of registering Notes and transfers of Notes as herein provided. The Company may appoint one or more co-registrars in accordance with Section 5.2. There shall be only one Note register. Upon surrender for registration of transfer of any Note to the Note registrar or any co-registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.5, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount. Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Noteholder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding. All Notes presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Trustee, the Note registrar or any co-registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Noteholder thereof or his, her or its attorney duly authorized in writing. No service charge shall be charged to the Noteholder for any exchange or registration of transfer of Notes. None of the Company, the Trustee, the Note registrar or any co-registrar shall be required to exchange or register a transfer of (a) any Notes for a period of fifteen (15) days next preceding any selection of Notes to be redeemed or (b) any Notes called for redemption or, if a portion of any Note is selected or called for redemption, such portion thereof selected or called for redemption or (c) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (d) any Notes 12 tendered for purchase or, if a portion of a Note is tendered for purchase, such portion thereof tendered for purchase. All Notes issued upon any transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange. (b) So long as the Notes are eligible for book-entry settlement with the Depositary, or unless otherwise required by law, all Notes that are so eligible may be represented by a Note or Notes in global form (the "Global Note" or "Global Notes") registered in the name of the Depositary or the nominee of the Depositary, except as otherwise specified below. The transfer, conversion and exchange of beneficial interests in the Global Note shall be effected through the Depositary in accordance with this Indenture and the procedures of the Depositary therefor. Transfers of interests in a Global Note will be made in accordance with the standing instructions and procedures of the Depositary and its participants. The Trustee shall make appropriate endorsements to reflect increases or decreases in the Global Note as set forth on the face of the Global Note to reflect any such transfers. Except as provided below, beneficial owners of an interest in a Global Note shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered holders of such Global Notes. No definitive Note, or portion thereof, in respect of which the Company or an Affiliate of the Company held any beneficial interest shall be included in a Global Note. The Trustee shall authenticate Notes in definitive form upon any transfer of a beneficial interest in any Global Note to the Company or any Affiliate of the Company. (c) Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian, the Depositary, the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc. or any other exchange or automated quotation system in which the Notes are then authorized for trading in order to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange upon which the Notes may be listed or traded or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject. (d) Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.5(d)), a Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee to a successor Depositary or a nominee of such successor Depositary. 13 The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Notes. Initially, the Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Custodian for Cede & Co. If at any time: (A) the Depositary for a Global Note (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Note and a successor depositary has not been appointed by the Company within ninety (90) calendar days, or (ii) has ceased to be a clearing agency registered under the Exchange Act and no successor clearing agency has been appointed by the Company within ninety (90) calendar days; (B) an Event of Default has occurred and is continuing; or (C) the Company, in its sole discretion, notifies the Trustee in writing that it no longer wishes to have all the Notes represented by Global Notes, the Company will execute, and the Trustee will authenticate and deliver, Notes in certificated form, in an aggregate principal amount equal to the principal amount of the Global Note, in exchange for such Global Note. Any Global Note exchanged pursuant to clause (A) or (B) above shall be so exchanged in whole and not in part, and any Global Note exchanged pursuant to clause (C) above may be exchanged in whole or in part from time to time as directed by the Company. Notes in definitive form issued in exchange for all or a part of a Global Note pursuant to this Section 2.5(d) 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. Upon execution and authentication, the Trustee shall deliver such Notes in certificated form to the persons in whose names such Notes in definitive form are so registered. Any Global Note exchanged pursuant to clause (A) or (B) above shall be so exchanged in whole and not in part and any Global Note exchanged pursuant to clause (C) above may be exchanged in whole or from time to time in part as directed by the Company. At such time as all interests in a Global Note have been redeemed, converted, exchanged, purchased or canceled for Notes in definitive form, or transferred to a transferee who receives Notes in definitive form, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and instructions existing between the Custodian and Depositary. At any time prior to such cancellation, if any interest in a Global Note is exchanged for Notes in certificated form, redeemed, converted, exchanged, purchased by the Company or canceled, or transferred for part of a Global Note, the principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Custodian and the Depositary, be reduced or increased, as the case may be, and an endorsement shall be made on such Global Note, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase. (e) Any Note or Common Stock issued upon the conversion or exchange of a Note that is purchased or owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction which results in such Note or Common Stock, as the case may be, no longer being "restricted securities" (as defined under Rule 144). Any Note or Common Stock issued in definitive form to the Company 14 or any Affiliate thereof shall be endorsed with or have incorporated in the text thereof such legends or recitals as necessary to set forth the foregoing restrictions. SECTION 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its request the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof. The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require. Upon the issuance of any substituted Note, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Note which has matured or is about to mature or has been called for redemption, or tendered for purchase in connection with a Change in Control, or is about to be converted into Common Stock shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any paying agent or conversion agent of the destruction, loss or theft of such Note and of the ownership thereof. Every substitute Note issued pursuant to the provisions of this Section 2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment or conversion of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment or conversion of negotiable instruments or other securities without their surrender. 15 SECTION 2.7 TEMPORARY NOTES. Pending the preparation of definitive Notes or any Global Note, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the definitive Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company. Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Notes. Without unreasonable delay the Company will execute and deliver to the Trustee or such authenticating agent definitive Notes and thereupon any or all temporary Notes may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 5.2 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of definitive Notes. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as definitive Notes authenticated and delivered hereunder. SECTION 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for the purpose of payment, redemption, purchase, conversion, exchange or registration of transfer, shall, if surrendered to the Company or any paying agent or any Note registrar or any conversion agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no Notes shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. Upon written instructions of the Company, the Trustee shall destroy canceled Notes and, after such destruction, shall, if requested by the Company, deliver a certificate of such destruction to the Company. If the Company shall acquire any of the Notes, such acquisition shall not operate as a redemption, purchase or satisfaction of the indebtedness represented by such Notes unless and until the same are delivered to the Trustee for cancellation. ARTICLE III REDEMPTION AND REPURCHASE OF NOTES SECTION 3.1 REDEMPTION OF NOTES AT OPTION OF THE COMPANY. Except as provided in Section 3.2, the Company may not redeem any Notes prior to December 31, 2006. On or after December 31, 2006, and prior to the Maturity Date, the Notes may, subject to the last paragraph of Section 3.4, be redeemed at the option of the Company, in whole or in part, at any time or from time to time, upon notice as set forth in Section 3.3 and subject to the provisions for partial redemption described below, for cash, at the per-note redemption prices set forth in the form of Note attached as Exhibit A hereto, plus an amount equal to accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption; provided that prior to December 31, 2007, the Notes may not be redeemed by the Company, except as provided in Section 3.2, unless the Closing Price of Common Stock (or, if more than one class of Common Stock is then issued and outstanding, all classes of Common Stock) has exceeded 150% of the Conversion Price for at 16 least 20 Trading Days during any period of 30 consecutive Trading Days ending within five Trading Days prior to the notice of redemption. SECTION 3.2 OPTIONAL REDEMPTION OF NOTES UPON A CHANGE IN CONTROL. Upon the occurrence of a Change in Control, the Notes may, subject to the last paragraph of Section 3.4, be redeemed at the option of the Company, in whole but not in part, on a date which is not later than sixty (60) days following the effective date of the event or circumstance resulting in the Change in Control, upon notice as set forth in Section 3.3, for cash at the per-note redemption prices set forth in the form of Note attached as Exhibit A hereto, plus an amount equal to accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption. SECTION 3.3 NOTICE OF REDEMPTION; SELECTION OF NOTES. (a) If the Company elects to exercise its right to redeem all or any part of the Notes pursuant to Section 3.1, it shall fix a date for redemption and it, or at its written request (which must be received by the Trustee at least five (5) Business Days prior to the date the Trustee is requested to give notice as described below unless a shorter period is agreed to by the Trustee), the Trustee, in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such redemption not fewer than thirty (30) nor more than sixty (60) days prior to the date fixed for redemption to each holder of Notes to be redeemed in whole or in part at its last address as the same appears on the Note register; provided that if the Company shall give such notice, it shall also give such notice, and notice of the Notes to be redeemed, to the Trustee. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Note designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other Note. Concurrently with the mailing of any such notice of redemption, the Company shall (i) issue a press release announcing such redemption, (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York, and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release or make such publications, nor any defect therein, shall affect the validity of the redemption notice or any of the proceedings for the redemption of any Note called for redemption. (b) If the Company elects to exercise its right to redeem the Notes in whole pursuant to Section 3.2, it shall fix a date for redemption and it, or at its written request (which must be received by the Trustee at least five (5) Business Days prior to the date the Trustee is requested to give notice as described below unless a shorter period is agreed to by the Trustee), the Trustee, in the name of and at the expense of the Company, shall mail or cause to be mailed a notice of such redemption on a date that is at least thirty (30) and not more than sixty (60) days prior to the date fixed for redemption, which shall not be later than sixty (60) days following the effective date of the event or circumstance resulting in the Change in Control, to each holder of Notes at its last address as the same appears on the Note register, provided that if the Company shall give such notice, it shall also give such notice to the Trustee. Such mailing 17 shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Note shall not affect the validity of the proceedings for the redemption of any other Note. The notice shall state that a Change in Control has occurred or may occur and shall describe the event or circumstance which has resulted or may result in a Change in Control, shall be accompanied by a copy of any press release or other public announcement of the Change in Control event, and may state that the Company's obligation to redeem the Notes is subject to consummation of the Change in Control event. Concurrently with the mailing of any such notice of redemption, the Company shall (i) issue a press release announcing such redemption, (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York, and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release or make such publications, nor any defect therein, shall affect the validity of the redemption notice or any of the proceedings for the redemption of any Note called for redemption. (c) In addition to the information specified in Section 3.3(a) and 3.3(b), if applicable, each such notice of redemption shall indicate that the Company has exercised its right to redeem the Notes in respect of which notice is given and shall specify the aggregate principal amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being redeemed, the date fixed for redemption (which shall be a Business Day), the redemption price at which Notes are to be redeemed, the place or places of payment that payment will be made upon presentation and surrender of such Notes, including any procedures applicable to a redemption to be accomplished through book-entry transfer, that accrued and unpaid interest to (but excluding) the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon or on the portion thereof to be redeemed (as the case may be) will cease to accrue. Such notice shall also state the current Conversion Price and the date on which the right to convert such Notes or portions thereof into Common Stock will expire. If fewer than all the Notes are to be redeemed, the notice of redemption shall identify the Notes to be redeemed (including CUSIP numbers). In the event any Note represented by a certificate is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that, on and after the date fixed for redemption, upon presentation and surrender of such Note, a new Note or Notes in an aggregate principal amount equal to the unredeemed portion thereof will be issued without cost to the holder of such Note. (d) If the Company gives notice of redemption as provided in this Section 3.3, then the Company shall, on the date fixed for redemption, before 12:00 p.m., New York City time, with respect to: (i) Notes held by the Depositary or its nominees, deposit or cause to be deposited, irrevocably with the Trustee or any paying agent an amount of money sufficient to redeem on the date fixed for redemption all the Notes so called for redemption (other than those theretofore surrendered for conversion into Common Stock) at the applicable redemption price, together with accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption and shall give the Trustee or any paying agent irrevocable instructions and authority to pay such amount to holders of such Notes; and (ii) Notes held in certificated form, deposit or cause to be 18 deposited, irrevocably with the Trustee an amount of money sufficient to redeem on the date fixed for redemption all the Notes so called for redemption (other than those theretofore surrendered for conversion into Common Stock) at the applicable redemption price, together with accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption, and shall give the Trustee irrevocable instructions and authority to pay such amount to holders of such Notes upon surrender of their certificates evidencing such Notes. (e) Payment of the redemption price for Notes, together with accrued and unpaid interest, if any, to, but excluding, the date fixed for redemption is conditioned upon book-entry transfer or physical delivery of certificates representing the Notes, together with any necessary endorsements, to the Trustee, or the Trustee's account at the Depositary, at any time after delivery of the notice of redemption. The Company shall be entitled to retain any interest, yield or gain on amounts deposited with the Trustee or any paying agent pursuant to this Section 3.3 in excess of the amounts required hereunder to pay the redemption price and accrued and unpaid interest to, but excluding, the date fixed for redemption. Payment of the redemption price for the Notes, together with accrued and unpaid interest to (but excluding) the date fixed for redemption, will be made: (i) if book-entry transfer or physical delivery of the Notes has been made by or on the date fixed for redemption, on the date fixed for redemption, or (ii) if book-entry transfer or physical delivery of the Notes has not been made by or on such date, at the time of book-entry transfer or physical delivery of the Notes. If any Note called for redemption is converted into Common Stock pursuant to Article XV prior to the date fixed for redemption, any money deposited with the Trustee or any paying agent or segregated and held in trust for the redemption of such Note shall be paid to the Company or, if then held by the Company, shall be discharged from such trust. Whenever any Notes are to be redeemed pursuant to Section 3.1 or 3.2, the Company will give the Trustee written notice in the form of an Officers' Certificate not fewer than sixty (60) days (or such shorter period of time as may be acceptable to the Trustee) prior to the date fixed for redemption as to the aggregate principal amount of Notes to be redeemed. (f) If less than all of the outstanding Notes are to be redeemed pursuant to Section 3.1, the Trustee shall select the Notes or portions thereof of the Global Note or the Notes in certificated form to be redeemed (in principal amounts of $50 or integral multiples thereof) by lot, on a pro rata basis or by another method the Trustee deems fair and appropriate in its sole discretion. If a portion of a holder's Notes are selected for redemption pursuant to Section 3.1 and such holder elects to convert a portion of its Notes into Common Stock pursuant to Article XV prior to the date fixed for redemption, then such converted portion shall be deemed to be taken from the portion selected for redemption. The Notes (or portions thereof) selected for redemption shall be deemed duly selected for redemption for all purposes hereof, notwithstanding that any such Note is submitted for conversion into Common Stock pursuant to Article XV, in whole or in part, before the mailing of the notice of redemption. In the event any Note represented by a certificate is to be redeemed in part only, upon presentation of such Note, the Company shall execute and the Trustee shall authenticate and deliver to the holder of such Note, at the expense of the Company, a new Note or Notes in an aggregate principal amount equal to the unredeemed portion of such Note. (g) Upon any redemption of less than all of the outstanding Notes pursuant to Section 3.1, the Company and the Trustee may (but need not), solely for purposes of determining 19 the pro rata allocation among such Notes as are unconverted and outstanding at the time of redemption, treat as outstanding any Notes surrendered for conversion into Common Stock pursuant to Article XV during the period of fifteen (15) days immediately preceding the mailing of a notice of redemption, and may (but need not) treat as outstanding any Note authenticated and delivered during such period in exchange for the unconverted portion of any Note converted into Common Stock pursuant to Article XV in part during such period. SECTION 3.4 PAYMENT OF NOTES CALLED FOR REDEMPTION BY COMPANY. If notice of redemption has been given as provided above, the Notes or portion of Notes with respect to which such notice has been given shall, unless converted into Common Stock pursuant to Article XV, become due and payable on the date and at the place or places stated in such notice at the applicable redemption price, together with accrued and unpaid interest to, but excluding, the date fixed for redemption, and if the Trustee or any paying agent holds, in accordance with this Section 3.4, money sufficient to pay the redemption price of the Notes called for redemption, together with accrued and unpaid interest to, but excluding, the date fixed for redemption, on and after said date (unless the Company shall default in the payment of such redemption price, together with accrued and unpaid interest to, but excluding, said date, in which case the Notes will remain outstanding and interest shall continue to accrue until the Company pays the redemption price, together with accrued and unpaid interest to (but excluding) the date of such payment)) interest on the Notes or portion of Notes called for redemption shall cease to accrue, such Notes shall be deemed to be no longer outstanding and, except as provided in Sections 8.5 and 13.4, shall cease to be entitled to any benefit or security under this Indenture, such Notes shall cease after the close of business on the Business Day immediately preceding the date fixed for redemption to be convertible into Common Stock and the holders thereof shall have no right in respect of such Notes except the right to receive the redemption price thereof and accrued and unpaid interest to, but excluding, the date fixed for redemption, without interest thereon. On presentation and surrender of such Notes via book-entry transfer or physical delivery, such Notes to be redeemed shall be paid and redeemed by the Company at the applicable redemption price, together with payment of accrued and unpaid interest thereon to, but excluding, the date fixed for redemption; provided that, if the date fixed for redemption is after a record date and on or before the corresponding interest payment date, holders of such Notes registered as such on such record date, subject to the terms and provisions of Section 2.3 hereof, shall be entitled to receive the interest payable on such Notes on the corresponding interest payment date, and the amount payable to holders of such Notes on the date fixed for redemption will not include any amount in respect of interest payable on such corresponding interest payment date. Notwithstanding the foregoing, the Trustee shall not redeem any Notes or mail any notice of redemption during the continuance of a default in payment of interest or premium, if any, on the Notes or of any Event of Default of which, in the case of any Event of Default other than under Section 7.1(a) or (b), a Responsible Officer of the Trustee has knowledge. SECTION 3.5 RESERVED. 20 SECTION 3.6 REQUIRED PURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL. (a) If there shall occur a Change in Control at any time prior to the Maturity Date, and the Company does not elect to exercise the right to redeem the Notes in whole pursuant to Section 3.2, Notes shall be purchased by the Company, at the option of the holders thereof, in whole or in part (in integral multiples of $50) as of the date (the "Change in Control Purchase Date") specified by the Company that is 45 calendar days (or if such day is not a Business Day, then the next succeeding Business Day) after the Company, or at its request, the Trustee, has mailed written notice of such Change in Control to holders of the Notes as set forth below, subject to satisfaction by or on behalf of any holder of the requirements set forth below, for cash at a purchase price equal to one-hundred percent (100%) of the aggregate principal amount thereof, together with accrued and unpaid interest, if any, to, but excluding, the Change in Control Purchase Date. (b) Within 30 calendar days after the effective date of the event or circumstance resulting in a Change in Control, the Company, or at its written request (which must be received by the Trustee at least five (5) Business Days prior to the date the Trustee is requested to give notice unless a shorter period is agreed to by the Trustee), the Trustee, in the name of and at the expense of the Company, shall mail a written notice of the Change in Control to the holders of Notes at their last addresses as the same appear on the Company's Note register, as of the date of the Change in Control; provided that if the Company shall give such notice, it shall also give such notice to the Trustee. Such mailing shall be by first class mail. The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Note shall not affect the validity of the proceedings for the purchase of any other Note. Concurrently with the mailing of any such notice of Change in Control, the Company shall (i) issue a press release announcing the Change in Control, (ii) publish such information once in a daily newspaper printed in the English language and of general circulation in the Borough of Manhattan, City of New York, New York, and (iii) publish such information on the Company's website; it being understood that the form and content of such press release and such publications shall be determined by the Company in its sole discretion. None of the failure to issue any such press release or make such publications, nor any defect therein, shall affect the validity of the notice of Change in Control or any of the proceedings for the purchase of any Note. The notice shall include the form of a Change in Control Purchase Notice to be completed by the holder and a copy of any press release or other public announcement of the Change in Control event, and shall state: (i) that a Change in Control has occurred or may occur (including a description of the event or circumstance which has or may result in a Change in Control), and that, as a result, the holders of Notes have certain purchase rights; (ii) the Change in Control Purchase Date; (iii) the date by which the Change in Control Purchase Notice pursuant to this Section 3.6 must be given; 21 (iv) the purchase price that will be payable with respect to the Notes as of the Change in Control Purchase Date; (v) that, on the Change in Control Purchase Date, if the Change in Control Purchase Notice is timely given, the purchase price of the Notes subject to such Change in Control Purchase Notice, together with accrued and unpaid interest, if any, to, but excluding, the Change in Control Purchase Date, will become due and payable and interest on such Notes shall cease to accrue; (vi) the name and address of the Trustee; (vii) the Conversion Price then in effect; (viii) that Notes as to which a Change in Control Purchase Notice has been given may be converted into Common Stock only to the extent that the Change in Control Purchase Notice has been withdrawn in accordance with the terms of this Section 3.6; (ix) the procedures that the holder of Notes must follow to exercise its rights under this Section 3.6; (x) the procedures for withdrawing a Change in Control Purchase Notice, including a form of notice of withdrawal; and (xi) that the Company's obligation to purchase the Notes may be subject to the consummation of the Change in Control event. If any of the Notes is in the form of a Global Note, then the Company shall modify such notice to the extent necessary to accord with the procedures of the Depositary and the Trustee applicable to the purchase of Notes represented by a Global Note. (c) A holder of Notes may exercise its rights pursuant to this Section 3.6 upon delivery of a written notice (a form of which is set forth on the reverse of the form of Note attached as Exhibit A hereto) duly completed, which may be delivered by letter, overnight courier, hand delivery, facsimile transmission or in any other written form and, in the case of Notes represented by a Global Note, may be delivered electronically or by other means in accordance with the Depositary's applicable procedures, of the exercise of such rights (a "Change in Control Purchase Notice") to the Trustee at any time prior to the close of business on the Business Day immediately before the Change in Control Purchase Date. Payment of the purchase price for Notes, together with accrued and unpaid interest, if any, to, but excluding, the Change in Control Purchase Date, is conditioned upon (i) timely delivery of a completed Change in Control Purchase Notice and (ii) book-entry transfer or physical delivery of the Notes, together with any necessary endorsements, to the Trustee, at any time after timely delivery of the Change in Control Purchase Notice. If a holder timely delivers its Change in Control Purchase Notice, payment of the purchase price for the Notes, together with accrued and unpaid interest, if any, to, but excluding, the Change in Control Purchase Date, will be made: (i) if book-entry transfer of or physical delivery of the Notes has been made by or on the Change in Control 22 Purchase Date, on the Change in Control Purchase Date, or (ii) if book-entry transfer of or physical delivery of the Notes has not been made by or on such date, at the time of book-entry transfer of or physical delivery of the Notes. (d) Notwithstanding anything herein to the contrary, any holder of Notes delivering to the Trustee the Change in Control Purchase Notice shall have the right to withdraw such Change in Control Purchase Notice in whole or as to a portion of such holder's Notes that is an integral multiple of $50 at any time prior to the close of business on the Business Day immediately before the Change in Control Purchase Date (unless the Company shall default in the payment of the purchase price, together with accrued and unpaid interest to (but excluding) the Change in Control Purchase Date, in which case, such withdrawal shall be permitted until the Company pays the purchase price, together with accrued and unpaid interest to (but excluding) the date of such payment) by delivery of a written notice of withdrawal to the Trustee in accordance with the provisions of this Section 3.6 specifying: (i) the principal amount of Notes, in integral multiples of $50, with respect to which such notice of withdrawal is being submitted; (ii) if certificated Notes have been issued, the certificate numbers for such shares in respect of which such notice of withdrawal is being submitted or, if such Notes are in the form of a Global Note, such information as is required by the Depositary; and (iii) the principal amount of Notes, if any, that remain subject to the original Change in Control Purchase Notice and have been or will be delivered for purchase by the Company. The Trustee shall promptly notify the Company of the receipt by it of any Change in Control Purchase Notice or written withdrawal thereof. The Trustee will promptly return to the respective holders thereof any Notes with respect to which a Change in Control Purchase Notice has been withdrawn in compliance with this Section 3.6, in which case, upon such return, the Change in Control Purchase Notice with respect thereto shall be deemed to have been withdrawn. Any money deposited with the Trustee or any paying agent or segregated and held in trust for the purchase of Notes as to which a Change in Control Purchase Notice has been withdrawn shall be paid to the Company or, if then held by the Company, shall be discharged from such trust. (e) Anything herein to the contrary notwithstanding, in the case of Notes held pursuant to a Global Note, any Change in Control Purchase Notice may be delivered or withdrawn and the Notes in respect of such Global Note may be delivered for purchase or withdrawn in accordance with the applicable procedures of the Depositary as in effect from time to time. (f) The Company shall, on the Change in Control Purchase Date, before 12:00 p.m., New York City time, with respect to: (i) all Notes or portions thereof which are to be purchased pursuant to this Section 3.6 and are held by the Depositary or its nominees, deposit or cause to be deposited, irrevocably with the Trustee or any paying agent an amount of money 23 sufficient to pay the aggregate purchase price of all Notes or portions thereof which are to be purchased pursuant to this Section 3.6 plus an amount equal to the accrued and unpaid interest, if any, to (but excluding) the Change in Control Purchase Date, and shall give the Trustee or any paying agent irrevocable instructions and authority to pay such amount to holders of such Notes; and (ii) all Notes or portions thereof which are to be purchased pursuant to this Section 3.6 and are held in certificated form, deposit or cause to be deposited, irrevocably with the Trustee or any paying agent an amount of money sufficient to pay the aggregate purchase price of all Notes or portions thereof which are to be purchased pursuant to this Section 3.6 plus an amount equal to the accrued and unpaid interest, if any, to (but excluding) the Change in Control Purchase Date, and shall give the Trustee irrevocable instructions and authority to pay such amount to holders of the certificates evidencing such Notes upon surrender of the certificates evidencing such Notes. The Company shall be entitled to retain any interest, yield or gain on funds deposited with the Trustee or any paying agent pursuant to this Section 3.6 in excess of the amounts required to pay the purchase price, together with accrued and unpaid interest to (but excluding) the Change in Control Purchase Date. (g) If a Change in Control Purchase Notice has been given as provided above, the purchase price of the Notes or portion of the Notes with respect to which such Change in Control Purchase Notice has been given shall, unless such Change in Control Purchase Notice is withdrawn pursuant to this Section 3.6, become due and payable on the Change in Control Purchase Date together with accrued and unpaid interest to, but excluding, the Change in Control Purchase Date and if the Trustee or any paying agent holds, in accordance with this Section 3.6, money sufficient to pay the purchase price of the Notes to be purchased, together with accrued and unpaid interest to, but excluding, the Change in Control Purchase Date, on and after the Change in Control Purchase Date (unless the Company shall default in the payment of the purchase price, together with accrued and unpaid interest to, but excluding, the Change in Control Purchase Date, in which case the Notes will remain outstanding and interest shall continue to accrue until the Company pays the purchase price, together with accrued and unpaid interest to (but excluding) the date of such payment), interest on such Notes shall cease to accrue, such Notes shall be deemed no longer outstanding and, except as provided in Sections 8.5 and 13.4, shall cease to be entitled to any benefit or security under this Indenture, the holders of such Notes shall no longer have the right to withdraw any Change in Control Purchase Notice in respect of such Notes after the close of business on the Business Day immediately preceding the Change in Control Purchase Date and the holders thereof shall have no right in respect of such Notes except the right to receive the purchase price thereof and accrued and unpaid interest to, but excluding, the Change in Control Purchase Date, without interest thereon. Notes in respect of which a Change in Control Purchase Notice has been given by the holder thereof may not be converted into shares of Common Stock on or after the date of the delivery of such Change in Control Purchase Notice unless such Change in Control Purchase Notice has first been validly withdrawn as specified in this Section 3.6. On presentation and surrender of such Notes via book-entry transfer or physical delivery, such Notes to be purchased shall be paid and purchased by the Company at the purchase price, together with payment of accrued and unpaid interest thereon to, but excluding, the Change in Control Purchase Date; provided that, if the Change in Control Purchase Date falls after a record date and on or before the corresponding interest payment date holders of such Notes registered as such on such record date, subject to the terms and provisions of Section 2.3 hereof, shall be entitled to receive the interest payable on such 24 Notes on the corresponding interest payment date, and the amount payable to holders of such Notes on the Change in Control Purchase Date will not include any amount in respect of interest payable on such corresponding interest payment date. (h) Upon presentation of any Note purchased in part only, the Company shall execute and the Trustee shall authenticate and deliver to the holder thereof, at the expense of the Company, a new Note or Notes, in an aggregate principal amount equal to the unpurchased portion of such Note. (i) The Company shall comply with any applicable provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act (including, without limitation, a filing on Schedule TO or other schedule) to the extent then applicable in connection with the purchase rights of the holders of the Notes pursuant to this Section 3.6. (j) To the extent the Company has insufficient funds to purchase all Notes for which the Trustee has received a Change in Control Purchase Notice that has not subsequently been withdrawn, the Trustee shall select the Notes or portions thereof of the Global Note or the Notes in certificated form to be purchased (in principal amounts of $50 or integral multiples thereof) from the Notes for which the Trustee has received a Change in Control Purchase Notice that has not subsequently been withdrawn by lot, on a pro rata basis or by another method the Trustee deems fair and appropriate in its sole discretion. To the extent the Company has insufficient funds to purchase all Notes for which the Trustee has received a Change in Control Purchase Notice that has not subsequently been withdrawn, the Company and the Trustee may (but need not), solely for purposes of determining the pro rata allocation among such Notes as are unconverted and outstanding on the Change in Control Purchase Date, treat as outstanding any Notes surrendered for conversion into Common Stock pursuant to Article XV during the period of fifteen (15) days immediately preceding the mailing of the notice of Change in Control pursuant to Section 3.6(b), and may (but need not) treat as outstanding any Note authenticated and delivered during such period in exchange for the unconverted portion of any Note converted into Common Stock pursuant to Article XV in part during such period. (k) The Company shall not be required to purchase any Notes upon the occurrence of a Change in Control if a third party makes an offer to purchase the Notes in the manner, for the amount, at the times and otherwise in compliance with the requirements described in this Section 3.6 and purchases all Notes for which the Trustee has received a Change in Control Purchase Notice that has not subsequently been withdrawn. (l) In the event of a reclassification, change, consolidation, merger, combination, sale or conveyance to which clause (i) of Section 12.1 applies as a result of which the Common Stock issuable upon conversion of the Notes changed or exchanged into the right to receive stock, securities or other property or assets (including cash), which includes Common Stock or common stock of another person that are, or upon issuance will be, traded on a United States national securities exchange or approved for trading on an established automated over-the-counter trading market in the United States and such shares constitute at the time such change or exchange becomes effective in excess of fifty percent (50%) of the aggregate fair market value of such stock, securities or other property or assets (including cash) (as determined by the 25 Company, which determination shall be conclusive and binding), then the person formed by such consolidation or resulting from such merger or that acquires such assets, as the case may be, shall execute and deliver to the Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such supplemental indenture complies with the Trust Indenture Act as in effect at the date of execution of such supplemental indenture) modifying the provisions of this Indenture relating to the right of holders of the Notes to cause the Company to purchase the Notes following a Change in Control, including without limitation the applicable provisions of this Section 3.6 and the definitions of Common Stock and Change in Control, as appropriate, as determined in good faith by the Company (which determination shall be conclusive and binding), to make such provisions apply to such other person if different from the Company and the common stock issued by such Person (in lieu of the Company and the Common Stock, respectively). ARTICLE IV SUBORDINATION OF NOTES SECTION 4.1 AGREEMENT OF SUBORDINATION. The Company covenants and agrees, and each holder of Notes issued hereunder by his, her or its acceptance thereof likewise covenants and agrees, that all Notes shall be issued subject to the provisions of this Article IV; and each person holding any Note, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions. The payment of the principal of, premium, if any, and interest on all Notes (including, but not limited to, the redemption price with respect to the Notes called for redemption in accordance with Section 3.3 and the purchase price with respect to Notes tendered for purchase in accordance with Section 3.6) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full in cash or other payment satisfactory to holders of Senior Indebtedness of all Senior Indebtedness. No provision of this Article IV shall prevent the occurrence of any default or Event of Default hereunder. SECTION 4.2 PAYMENTS TO NOTEHOLDERS. No payment shall be made with respect to the principal of, or premium, if any, or interest on the Notes (including, but not limited to, the redemption price with respect to the Notes called for redemption in accordance with Section 3.3 and the purchase price with respect to Notes tendered for purchase in accordance with Section 3.6), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 4.5, if: (a) a default in the payment of principal, premium, if any, interest, or other obligations due on any Senior Indebtedness occurs and is continuing (or, in the case of Senior Indebtedness for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Indebtedness), unless and until such default shall have been cured or waived or shall have ceased to exist; or 26 (b) a default, other than a payment default, on a Senior Indebtedness occurs and is continuing that then permits holders of such Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of the default (a "Payment Blockage Notice") from the Company or holder or Representative of Senior Indebtedness. If the Trustee receives any Payment Blockage Notice pursuant to clause (b) above, no subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until (A) at least 365 days shall have elapsed since the effectiveness of the immediately prior Payment Blockage Notice, and (B) all scheduled payments of principal, premium, if any, and interest on the Notes that have come due have been paid in full in cash. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice. The Company may and shall resume payments on and distributions in respect of the Notes upon the earlier of: (1) the date upon which the default is cured or waived or ceases to exist, or (2) in the case of a default referred to in clause (b) above, the earlier of (x) the date such default is cured or waived or ceases to exist or (y) the date that is 179 days after a Payment Blockage Notice is received if the maturity of such Senior Indebtedness has not been accelerated, unless this Article IV otherwise prohibits the payment or distribution at the time of such payment or distribution. Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due or to become due upon all Senior Indebtedness shall first be paid in full, in cash or other payment satisfactory to the holders of Senior Indebtedness or payment thereof provided for in cash or other payment satisfactory to the holders of Senior Indebtedness, before any payment is made on account of the principal (and premium, if any) or interest on the Notes (except payments made pursuant to Article XIII from monies deposited with the Trustee pursuant thereto prior to the happening of such dissolution, winding-up, liquidation or reorganization or bankruptcy, insolvency, receivership or other such proceedings); and upon any such dissolution or winding-up or liquidation or reorganization or bankruptcy, insolvency, receivership or other such proceedings, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the holders of the Notes or the Trustee under this Indenture would be entitled, except for the provision of this Article IV, shall (except as aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the holders of the Notes or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders or as otherwise required by law or a court order) or their respective Representative or Representatives, as their respective interests may appear, to the 27 extent necessary to pay all Senior Indebtedness in full in cash or other payment satisfactory to holders of Senior Indebtedness after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness, before any payment or distribution is made to the holders of the Notes or to the Trustee under this Indenture. In the event of the acceleration of the Notes pursuant to Article VII, no payment or distribution shall be made to the Trustee or any holder of Notes in respect of the principal of, premium, if any, or interest on the Notes (including, but not limited to, the redemption price with respect to the Notes called for redemption in accordance with Section 3.3 and the purchase price with respect to Notes tendered for purchase in accordance with Section 3.6), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 4.5, until all Senior Indebtedness has been paid in full in cash or other payment satisfactory to the holders of Senior Indebtedness or such acceleration is rescinded in accordance with the terms of this Indenture. If payment of the Notes is accelerated pursuant to Article VII, the Company shall promptly notify holders of Senior Indebtedness of such acceleration. In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (including, without limitation, by way of set-off or otherwise), prohibited by the foregoing, shall be received by the Trustee under this Indenture or by any holders of the Notes before all Senior Indebtedness is paid in full in cash or other payment satisfactory to holders of Senior Indebtedness, or provision is made for in cash or other payment satisfactory to holders of Senior Indebtedness, such payment or distribution shall be held by the recipient or recipients in trust for the benefit of, and shall be immediately paid over or delivered to, the holders of Senior Indebtedness or their respective Representative or Representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or other payment satisfactory to the holders of Senior Indebtedness, after giving effect to any concurrent payment or distribution (or provision therefor) to or for the holders of such Senior Indebtedness. For purposes of this Article IV, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated (at least to the extent provided in this Article IV with respect to the Notes) to the payment of all Senior Indebtedness which may at the time be outstanding; provided that (i) the Senior Indebtedness is assumed by the new corporation, if any, resulting from such reorganization or adjustment, and (ii) the rights of the holders of Senior Indebtedness (other than leases which are not assumed by the Company or by the new corporation, as the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article XII shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 4.2 if such 28 other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article XII. Nothing in this Section 4.2 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject to the further provisions of Section 4.5. SECTION 4.3 SUBROGATION OF NOTES. Subject to the payment in full of all Senior Indebtedness, the rights of the holders of the Notes shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions of this Article IV (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to other indebtedness of the Company to substantially the same extent as the Notes are subordinated and is entitled to like rights of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Indebtedness until the principal of (and premium, if any) and interest on the Notes shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the holders of the Notes or the Trustee would be entitled except for the provisions of this Article IV, and no payment over pursuant to the provisions of this Article IV, to or for the benefit of the holders of Senior Indebtedness by holders of the Notes or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness, and the holders of the Notes, be deemed to be a payment by the Company to or on account of the Senior Indebtedness; and no payments or distributions of cash, property or securities to or for the benefit of the holders of the Notes pursuant to the subrogation provisions of this Article IV, which would otherwise have been paid to the holders of Senior Indebtedness shall be deemed to be a payment by the Company to or for the account of the Notes. It is understood that the provisions of this Article IV are and are intended solely for the purposes of defining the relative rights of the holders of the Notes, on the one hand, and the holders of the Senior Indebtedness, on the other hand. Nothing contained in this Article IV or elsewhere in this Indenture or in the Notes is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Indebtedness, and the holders of the Notes, the obligation of the Company, which is absolute and unconditional, to pay to the holders of the Notes the principal of (and premium, if any) and interest on the Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holders of the Notes and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the holder of any Note from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article IV of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any payment or distribution of assets of the Company referred to in this Article IV, the Trustee, subject to the provisions of Section 8.1, and the holders of the Notes shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making 29 such payment or distribution, delivered to the Trustee or to the holders of the Notes, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article IV. SECTION 4.4 AUTHORIZATION BY NOTEHOLDERS. Each holder of a Note by his, her or its acceptance thereof authorizes and directs the Trustee on his, her or its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article IV and appoints the Trustee his, her or its attorney-in-fact for any and all such purposes. SECTION 4.5 NOTICE TO TRUSTEE. The Company shall give prompt written notice in the form of an Officers' Certificate to a Responsible Officer of the Trustee and to any paying agent of any fact known to the Company which would prohibit the making of any payment of monies to or by the Trustee or any paying agent in respect of the Notes pursuant to the provisions of this Article IV. Notwithstanding the provisions of this Article IV or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any Senior Indebtedness or of any default or event of default with respect to any Senior Indebtedness or of any other facts which would prohibit the making of any payment of monies to or by the Trustee in respect of the Notes pursuant to the provisions of this Article IV, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the Corporate Trust Office from the Company (in the form of an Officers' Certificate) or a holder or holders or Representative of Senior Indebtedness who shall have been certified by the Company or otherwise established to the reasonable satisfaction of the Trustee to be such holder or Representative; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 8.1, shall be entitled in all respects to assume that no such facts exist; provided that if on a date at least two (2) Business Days prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitation, the payment of the principal of, or premium, if any, or interest on any Note), the Trustee shall not have received with respect to such monies the notice provided for in this Section 4.5, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date. Notwithstanding anything to the contrary hereinbefore set forth, nothing shall prevent (a) any payment by the Company or the Trustee to the Noteholders of amounts in connection with (i) a redemption of Notes if notice of such redemption has been given to the holders of Notes in compliance with Section 3.3 prior to the receipt by the Trustee of written notice as aforesaid, or (ii) a purchase of Notes tendered for purchase if the Change in Control Purchase Notice has been received in compliance with Section 3.6 prior to the receipt by the Trustee of written notice as aforesaid; or (b) any payment by the Trustee to the Noteholders of monies deposited with it pursuant to Section 13.1. The Trustee, subject to the provisions of Section 8.1, shall be entitled to rely on the delivery to it of a written notice by a person representing himself, herself or itself to be a holder 30 of Senior Indebtedness (or a Representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a Representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article IV, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article IV, and if such evidence is not furnished the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive such payment. SECTION 4.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee and any agent of the Company or the Trustee in its individual capacity shall be entitled to all the rights set forth in this Article IV in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in Section 8.13 or elsewhere in this Indenture shall deprive the Trustee or any such agent of any of its rights as such holder. Nothing in this Article IV shall apply to claims of, or payments to, the Trustee under or pursuant to Section 8.6. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article IV, and no implied covenants or obligations with respect to the holders of Senior Indebtedness shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and, subject to the provisions of Sections 4.2, 4.5 and 8.1, the Trustee shall not be liable to any holder of Senior Indebtedness if it shall pay over or deliver to holders of Notes, the Company or any other person money or assets to which any holder of Senior Indebtedness shall be entitled by virtue of this Article IV or otherwise. SECTION 4.7 NO IMPAIRMENT OF SUBORDINATION. No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. SECTION 4.8 CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes of this Article IV only, (1) the issuance and delivery of junior securities upon (i) conversion of Notes in accordance with Article XV shall not be deemed to constitute a payment or distribution on account of the principal of (or premium, if any) or interest on Notes or on account of the purchase or other acquisition of Notes, and will therefor not be subject to the subordination provisions of Article IV and (2) the payment, issuance or delivery of cash (except in satisfaction of fractional shares pursuant to Section 15.3), property or securities (other than junior securities) upon conversion of a Note shall be deemed to constitute payment on account of the principal of such Note. For the purposes of this Section, the term "junior securities" means (a) shares of any stock of any class of the Company and (b) securities of the Company which are subordinated in 31 right of payment to all Senior Indebtedness which may be outstanding at the time of issuance or delivery of such securities to substantially the same extent as, or to a greater extent than, the Notes are so subordinated as provided in this Article. Nothing contained in this Article or elsewhere in this Indenture or in the Notes is intended to or shall impair, as among the Company, its creditors other than holders of Senior Indebtedness and the holders of the Notes, the right, which is absolute and unconditional, of the holder of any Note to convert such Note in accordance with Article XV. SECTION 4.9 ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any paying agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall (unless the context otherwise requires) be construed as extending to and including such paying agent within its meaning as fully for all intents and purposes as if such paying agent were named in this Article in addition to or in place of the Trustee; provided, however, that the first paragraph of Section 4.5 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as paying agent. SECTION 4.10 SENIOR INDEBTEDNESS ENTITLED TO RELY. The holders of Senior Indebtedness shall have the right to rely upon this Article IV, and no amendment or modification of the provisions contained herein shall diminish the rights of such holders unless such holders shall have agreed in writing thereto. ARTICLE V PARTICULAR COVENANTS OF THE COMPANY SECTION 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and premium, if any, and interest on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes. SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the Borough of Manhattan, The City of New York, New York, an office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or for conversion or redemption or purchase and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not designated or appointed by the Trustee. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, or the office or agency of the Trustee or an Affiliate of the Trustee, in the Borough of Manhattan, The City of New York, New York. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough 32 of Manhattan, The City of New York, New York, for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby initially designates the Trustee as paying agent, Note registrar, Custodian and conversion agent. The Corporate Trust Office and the office or agency of the Trustee in the Borough of Manhattan, The City of New York, New York (which shall initially be The Bank of New York, located at 101 Barclay Street, New York, NY 10286) shall be considered as one such office or agency of the Company for each of the aforesaid purposes. So long as the Trustee is the Note registrar, the Trustee agrees to mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the third paragraph of Section 8.11. SECTION 5.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 8.10, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 5.4 PROVISIONS AS TO PAYING AGENT. (a) If the Company shall appoint a paying agent other than the Trustee, the Company will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.4: (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 Notes (whether such sums have been paid to it by the Company or by any other obligor on the Notes) in trust for the benefit of the holders of the Notes; (2) that it will give the Trustee written notice of any failure by the Company (or by any other obligor on the Notes) to make any payment of the principal of and premium, if any, or interest on the Notes when the same shall be due and payable; and (3) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust. The Company shall, on or before each due date of the principal of, premium, if any, or interest on the Notes, deposit with the paying agent a sum (in funds which are immediately available) sufficient to pay such principal, premium, if any, or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action, provided that if such deposit is made on the due date, such deposit must be received by the paying agent by 10:00 a.m., New York City time, on such date. (b) If the Company shall act as its own paying agent, it will, on or before each due date of the principal of, premium, if any, or interest on the Notes, set aside, segregate and hold in trust for the benefit of the holders of the Notes a sum sufficient to pay such principal, 33 premium, if any, or interest so becoming due and will notify the Trustee in writing of any failure to take such action and of any failure by the Company (or any other obligor under the Notes) to make any payment of the principal of, premium, if any, or interest on the Notes when the same shall become due and payable. (c) Anything in this Section 5.4 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any paying agent hereunder as required by this Section 5.4, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any paying agent to the Trustee, the Company or such paying agent shall be released from all further liability with respect to such sums. (d) Anything in this Section 5.4 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 5.4 is subject to Sections 13.3 and 13.4. SECTION 5.5 EXISTENCE. Subject to Article XII, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence. SECTION 5.6 RESTRICTION AS TO DIVIDENDS. The Company covenants and agrees that so long as any Note is outstanding, no dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Common Stock) shall be declared or paid or set apart for payment, and no other distribution shall be declared or made or set apart for payment, in each case upon the Common Stock, nor shall any Common Stock be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund or otherwise for the purchase or redemption of any shares of Common Stock), by the Company or any Subsidiary (except (A) by conversion into or exchange for Common Stock; or (B) repurchases of unvested shares of Common Stock at cost upon termination of the employment or consultancy of the holder thereof, provided such repurchases are approved by the Board of Directors in good faith) unless such dividend, distribution, redemption, purchase or acquisition is not declared, paid or made, or funds or other assets therefor set aside or made available for payment or distribution (whether by way of a sinking fund or otherwise), until December 31, 2007. SECTION 5.7 STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, premium, if any, or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. 34 SECTION 5.8 COMPLIANCE CERTIFICATE. The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year in which the Exchange Date falls), an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. The Company will deliver to the Trustee, forthwith upon becoming aware of any default in the performance or observance of any covenant, agreement or condition contained in this Indenture, or any Event of Default, an Officers' Certificate specifying with particularity such default or Event of Default and further stating what action the Company has taken, is taking or proposes to take with respect thereto. Any notice required to be given under this Section 5.8 shall be delivered to the Trustee at its Corporate Trust Office. SECTION 5.9 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture. ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE SECTION 6.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, quarterly, not more than fifteen (15) days after March 11, June 10, September 10 and December 11 of each year beginning with March 11, June 10, September 10 and December 11, immediately after the Exchange Date, and at such other times as the Trustee may request in writing, within thirty (30) days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the holders of Notes as of a date not more than fifteen (15) days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note registrar. SECTION 6.2 PRESERVATION AND DISCLOSURE OF LISTS. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Notes contained in the most recent list furnished to it as provided in Section 6.1 or maintained by the Trustee in its capacity as Note registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 6.1 upon receipt of a new list so furnished. 35 (b) The rights of Noteholders to communicate with other holders of Notes with respect to their rights under this Indenture or under the Notes and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Noteholder, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of holders of Notes made pursuant to the Trust Indenture Act. SECTION 6.3 REPORTS BY TRUSTEE. (a) Within 60 days after May 1 of each year commencing with the year in which the Exchange Date falls, the Trustee shall transmit to holders of Notes such reports dated as of May 1 of the year in which such reports are made concerning the Trustee and its actions under this Indenture as may be required pursuant to Section 313 of the Trust Indenture Act at the times and in the manner provided pursuant thereto. In the event that no events have occurred under the applicable sections of the Trust Indenture Act, the Trustee shall be under no duty or obligation to provide such reports. (b) A copy of such report shall, at the time of such transmission to holders of Notes, be filed by the Trustee with each stock exchange or automated quotation system upon which the Notes are listed, with the Commission and with the Company. The Company will notify the Trustee when the Notes are listed on any stock exchange or automated quotation system and when any such listing is discontinued. SECTION 6.4 REPORTS BY COMPANY. (a) The Company (and any obligor upon the Notes) shall file with the Trustee and the Commission, and transmit to holders of Notes, such information, documents and other reports and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. (b) The Company will deliver to the Trustee (a) as soon as available and in any event within ninety (90) days after the end of each fiscal year of the Company (i) a consolidated balance sheet of the Company and its subsidiaries as of the end of such fiscal year and the related consolidated statements of operations, stockholders' equity and cash flows for such fiscal year, all reported on by an independent public accountant of nationally recognized standing and (ii) a report containing a management's discussion and analysis of the financial condition and results of operations and a description of the business and properties of the Company and (b) as soon as available and in any event within forty-five (45) days after the end of each of the first three quarters of each fiscal year of the Company an unaudited consolidated management's discussion and analysis of the financial condition and results of operations of the Company for such quarter; provided that the foregoing statements and reports shall not be required for any fiscal year or 36 quarter, as the case may be, with respect to which the Company files or expects to file with the Trustee an annual report or quarterly report, as the case may be, pursuant to Section 6.4(a). The Trustee shall have no liability as regards the substance of the information provided by the Company or its agents pursuant to this Section 6.4. ARTICLE VII DEFAULTS AND REMEDIES SECTION 7.1 EVENTS OF DEFAULT. In case one or more of the following Events of Default (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) shall have occurred and be continuing: (a) default in the payment of the principal of and premium, if any, on any of the Notes as and when the same shall become due and payable either at maturity or in connection with any redemption or purchase, by declaration or otherwise, whether or not such payment is prohibited by the provisions of Article IV; or (b) default in the payment of any installment of interest, upon any of the Notes as and when the same shall become due and payable, and continuance of such default for a period of thirty (30) days, whether or not such payment is prohibited by the provisions of Article IV; or (c) default in the Company's obligation to deliver shares of Common Stock, together with cash in lieu of any fractional shares, when due upon conversion of Notes as provided in Article XV, and continuance of such default for a period of ten (10) Business Days; or (d) failure on the part of the Company to provide timely notice of a Change in Control as provided in Section 3.6(b); or (e) failure on the part of the Company duly to observe or perform any other of the covenants or agreements on the part of the Company in the Notes or in this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with) continued for a period of forty-five (45) days after the date on which written notice of such failure, requiring the Company to remedy the same, shall have been given to the Company by the Trustee, or to the Company and a Responsible Officer of the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Notes at the time outstanding determined in accordance with Section 9.4; or (f) failure by the Company, or any current or future Subsidiary, to make any payment at maturity, including any applicable grace period, in respect of Indebtedness, in an amount in excess of $5,000,000 or the equivalent thereof in any other currency or composite currency and such failure shall have continued for a period of thirty (30) days after written notice thereof shall have been given to the Company by the Trustee, or to the Company and a 37 Responsible Officer of the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Notes at the time outstanding determined in accordance with Section 9.4; or (g) a default by the Company, or any current or future Subsidiary, with respect to any Indebtedness which default results in the acceleration of Indebtedness in an amount in excess of $5,000,000 or the equivalent thereof in any other currency or composite currency without such Indebtedness having been discharged or such acceleration having been cured, waived, rescinded or annulled for a period of thirty (30) days after written notice thereof shall have been given to the Company by the Trustee or to the Company and a Responsible Officer of the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Notes at the time outstanding determined in accordance with Section 9.4; or (h) the Company or any current or future Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or (i) an involuntary case or other proceeding shall be commenced against the Company or any current or future Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of ninety (90) consecutive days; then, and in each and every such case (other than an Event of Default specified in Section 7.1(h) or (i)), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding hereunder determined in accordance with Section 9.4, by notice in writing to the Company (and to the Trustee if given by Noteholders), may declare the principal of and premium, if any, on all the Notes and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Notes contained to the contrary notwithstanding. If an Event of Default specified in Section 7.1(h) or (i) occurs and is continuing, the principal of and premium, if any, on all the Notes and the interest accrued thereon shall be immediately due and payable. This provision, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all Notes and the principal of and premium, if any, on any and all Notes which shall have become due otherwise than by acceleration (with interest on overdue installments of interest (to the extent that payment of such interest is enforceable under applicable law) and on such principal and premium, if any, at the rate borne by the Notes, to the 38 date of such payment or deposit) and amounts due to the Trustee pursuant to Section 8.6, and if any and all defaults under this Indenture, other than the nonpayment of principal of and premium, if any, and accrued interest on Notes which shall have become due by acceleration, shall have been cured or waived pursuant to Section 7.7, then and in every such case the holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all defaults or Events of Default and rescind and annul such declaration and its consequences; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or Event of Default, or shall impair any right consequent thereon. The Company shall notify the Responsible Officer of the Trustee, promptly upon becoming aware thereof, of any Event of Default. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such waiver or rescission and annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the holders of Notes, and the Trustee shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the holders of Notes, and the Trustee shall continue as though no such proceeding had been instituted. SECTION 7.2 PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The Company covenants that (a) in case default shall be made in the payment by the Company of any installment of interest upon any of the Notes as and when the same shall become due and payable, and such default shall have continued for a period of thirty (30) days, or (b) in case default shall be made in the payment of the principal of or premium, if any, on any of the Notes as and when the same shall have become due and payable, whether at maturity of the Notes or in connection with any redemption, purchase, by declaration under this Indenture or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Notes, the whole amount that then shall have become due and payable on all such Notes for principal and premium, if any, or interest, or both, as the case may be, with interest upon the overdue principal and premium, if any, and (to the extent that payment of such interest is enforceable under applicable law) upon the overdue installments of interest at the rate borne by the Notes; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence or bad faith. Until such demand by the Trustee, the Company may pay the principal of and premium, if any, and interest on the Notes to the registered holders, whether or not the Notes are overdue. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor on the Notes and collect in the manner provided by law out of the property of the Company or any other obligor on the Notes wherever situated the monies adjudged or decreed to be payable. 39 In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the case of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 7.2, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Noteholders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due the Trustee under Section 8.6; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Noteholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Noteholders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including counsel fees incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property which the holders of the Notes may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or adopt on behalf of any Noteholder any plan of reorganization or arrangement affecting the Notes or the rights of any Noteholder, or to authorize the Trustee to vote in respect of the claim of any Noteholder in any such proceeding; provided, however, that the Trustee may, on behalf of the Noteholders, vote for the election of a trustee in bankruptcy or similar official and may be a member of the creditor's committee established with respect to such bankruptcy. All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes, or the production thereof on any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the holders of the Notes. SECTION 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies collected by the Trustee pursuant to this Article VII shall be applied in the order following, at the date or dates 40 fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid: First: To the payment of all amounts due the Trustee under Section 8.6; Second: Subject to the provisions of Article IV, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on the Notes in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate borne by the Notes, such payments to be made ratably to the persons entitled thereto; Third: Subject to the provisions of Article IV, in case the principal of the outstanding Notes shall have become due, by declaration or otherwise, and be unpaid, to the payment of the whole amount then owing and unpaid upon the Notes for principal and premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Notes; and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal and premium, if any, and interest without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal and premium, if any, and accrued and unpaid interest; and Fourth: Subject to the provisions of Article IV, to the payment of the remainder, if any, to the Company or any other person lawfully entitled thereto. SECTION 7.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 7.7; it being understood and intended that no one or more holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other holders of Notes, or to obtain or seek to obtain priority or preference over any other holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the holders of Notes. 41 Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any holder of any Note to receive payment of the principal of and premium, if any, and interest on such Note, on or after the respective due dates expressed in such Note, or to institute suit for the enforcement of any such payment on or after such respective dates against the Company shall not be impaired or affected without the consent of such holder. Anything in this Indenture or the Notes to the contrary notwithstanding, the holder of any Note, without the consent of either the Trustee or the holder of any other Note, in his, her or its own behalf and for his, her or its own benefit, may enforce, and may institute and maintain any proceeding suitable to enforce, his, her or its rights of conversion as provided herein. SECTION 7.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. SECTION 7.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in Section 2.6, all powers and remedies given by this Article VII to the Trustee or to the Noteholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Notes to exercise any right or power accruing upon any default or 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 any acquiescence therein; and, subject to the provisions of Section 7.4, every power and remedy given by this Article VII or by law to the Trustee or to the Noteholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Noteholders. SECTION 7.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 9.4 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; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. The holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 9.4 may on behalf of the holders of all of the Notes waive any past default or Event of Default hereunder and its consequences except (i) a default by the Company in the payment of interest or premium, if any, on, or the principal of, the Notes, (ii) a failure by the Company to convert any Notes into Common Stock or (iii) a default by the Company in respect of a covenant or provision hereof which under Article XI cannot be modified or amended without the consent of the holders of all Notes then outstanding affected 42 thereby. Upon any such waiver the Company, the Trustee and the holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 7.7, said default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. SECTION 7.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90) days after the occurrence of a default, mail to all Noteholders, as the names and addresses of such holders appear upon the Note register, notice of all defaults known to a Responsible Officer, unless such defaults shall have been cured or waived before the giving of such notice; and provided that, except in the case of default in the payment of the principal of, or premium, if any (either at maturity or in connection with any redemption or purchase, by declaration or otherwise), or interest on any of the Notes, the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the best interests of the Noteholders. The Trustee shall not be charged with the knowledge of any default or Event of Default with respect to the Notes, other than an Event of Default under Section 7.1(a) or (b) unless either (1) a Responsible Officer shall have actual knowledge of such default or Event of Default or (2) written notice of such default or Event of Default making reference to this Indenture and to the Notes shall have been given to the Trustee by the Company or any Noteholder. SECTION 7.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and each holder of any Note by his, her or its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 7.9 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 9.4, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or premium, if any, or interest on any Note (including, but not limited to, the redemption price with respect to the Notes being redeemed or the purchase price with respect to the Notes being purchased as provided in this Indenture) on or after the due date expressed in such Note or to any suit for the enforcement of the right to convert any Note in accordance with the provisions of Article XV. SECTION 7.10 DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to 43 the holders of Notes may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the holders of Notes, as the case may be. ARTICLE VIII CONCERNING THE TRUSTEE SECTION 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that (a) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred: (1) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and the Trust Indenture Act, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture and the Trust Indenture Act against the Trustee; and (2) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein); (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (c) the Trustee shall not be liable to any Noteholder 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 Notes at the time outstanding determined as 44 provided in Section 9.4 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. SECTION 8.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise provided in Section 8.1: (a) the Trustee may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, Note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties; (b) before the Trustee acts or refrains from acting, it may request an Officers' Certificate or an Opinion of Counsel, or both; (c) the Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Noteholders pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (e) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, Note, note or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; 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 from the Noteholders against such expenses or liability as a condition to so proceeding; the reasonable 45 expenses of every such examination shall be paid by the Company or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Company upon demand; and (f) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder. In no event shall the Trustee be liable for any consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. SECTION 8.3 TRUSTEE'S DISCLAIMER. The recitals contained herein and in the Notes (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture. SECTION 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY OWN NOTES. The Trustee, any paying agent, any conversion agent or Note registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not Trustee, paying agent, conversion agent or Note registrar. SECTION 8.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of Section 13.4, all monies received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed from time to time by the Company and the Trustee. SECTION 8.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably 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 willful misconduct. The Company also covenants to indemnify the Trustee in any capacity under this Indenture and its agents and any authenticating agent for, and to hold them harmless against, any loss, liability or expense incurred without negligence or willful misconduct on the part of the Trustee or such agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs 46 and expenses of defending themselves against any claim of liability in the premises. The obligations of the Company under this Section 8.6 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust herewith for the benefit of the holders of particular Notes prior to the date of the accrual of such unpaid compensation or indemnifiable claim. The obligation of the Company under this Section shall survive the satisfaction and discharge of this Indenture. When the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 7.1(h) or (i) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws. SECTION 8.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise provided in Section 8.1 or Section 8.2, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence, willful misconduct, recklessness and 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 Officers' Certificate, in the absence of negligence, willful misconduct, recklessness and bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 8.8 CONFLICTING INTERESTS OF TRUSTEE. (a) If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. (b) In the event that the Trustee shall fail to comply with Subsection (a) of this Section 8.8, the Trustee shall transmit notice of such failure to the holders of Notes to the extent and in the manner provided by, and subject to, the provisions of the Trust Indenture Act. SECTION 8.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a Trustee hereunder which shall be a person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus (together with its corporate parent) of at least $50,000,000 (or, if such person is a member of a bank holding company system, the bank holding company shall have a combined capital and surplus of at least $50,000,000). If such person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. 47 SECTION 8.10 RESIGNATION OR REMOVAL OF TRUSTEE. (a) The Trustee may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof to the holders of Notes at their addresses as they shall appear on the Note register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment thirty (30) days after the mailing of such notice of resignation to the Noteholders, the resigning Trustee may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor trustee, or any Noteholder who has been a bona fide holder of a Note or Notes for at least six months may, subject to the provisions of Section 7.9, on behalf of himself, herself or itself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur: (1) the Trustee shall fail to comply with Section 8.8(a) after written request therefor by the Company or by any Noteholder who has been a bona fide holder of a Note or Notes for at least six months, or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 8.9 and shall fail to resign after written request therefor by the Company or by any such Noteholder, or (3) the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 7.9, any Noteholder who has been a bona fide holder of a Note or Notes for at least six months may, on behalf of himself, herself or itself 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 Notes at the time outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless within ten (10) days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so 48 removed or any Noteholder, upon the terms and conditions and otherwise as in Section 8.10(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee. (d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 8.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 8.11. SECTION 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee appointed as provided in Section 8.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 8.6, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 8.6. No successor trustee shall accept appointment as provided in this Section 8.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 8.8 and be eligible under the provisions of Section 8.9. Upon acceptance of appointment by a successor trustee as provided in this Section 8.11, each of the Company and the former trustee shall mail or cause to be mailed notice of the succession of such trustee hereunder to the holders of Notes at their addresses as they shall appear on the Note register. If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company. SECTION 8.12 SUCCESSION BY MERGER, ETC. Any corporation or other entity 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 or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the trust created hereunder), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that in the case of any corporation succeeding to all or substantially all of the trust business of the Trustee such corporation shall be qualified under the provisions of Section 8.8 and eligible under the provisions of Section 8.9. 49 In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. SECTION 8.13 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Notes) and the Trust Indenture Act is applicable hereto, the Trustee shall be subject to the provisions of Section 311(a) of the Trust Indenture Act or, if applicable, Section 311(b) of the Trust Indenture Act regarding the collection of the claims against the Company (or any such other obligor). ARTICLE IX CONCERNING THE NOTEHOLDERS SECTION 9.1 ACTION BY NOTEHOLDERS. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Noteholders in person or by agent or proxy appointed in writing, or (b) by the record of the holders of Notes voting in favor thereof at any meeting of Noteholders duly called and held in accordance with the provisions of Article X, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Noteholders. Whenever the Company or the Trustee solicits the taking of any action by the holders of the Notes, the Company or the Trustee may fix in advance of such solicitation, a date as the record date for determining holders entitled to take such action. The record date shall be not more than fifteen (15) days prior to the date of commencement of solicitation of such action. SECTION 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a Noteholder or his, her or its agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Notes shall be proved by the Note register or by a certificate of the Note registrar. The record of any Noteholders' meeting shall be proved in the manner provided in Section 10.6. 50 SECTION 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee, any paying agent, any conversion agent and any Note registrar may deem the person in whose name such Note shall be registered upon the Note register to be, and may treat him, her or it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of, premium, if any, and interest on such Note, for conversion of such Note and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any conversion agent nor any Note registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being, or upon his, her or its order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Note. SECTION 9.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes which are owned by the Company or any other obligor on the Notes or by any Affiliate of the Company or any other obligor on the Notes shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes which a Responsible Officer of the Trustee knows are so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 9.4 if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Notes and that the pledgee is not the Company, any other obligor on the Notes or an Affiliate of the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described persons; and, subject to Section 8.1, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination. SECTION 9.5 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 9.1, of the taking of any action by the holders of the percentage in aggregate principal amount of the Notes specified in this Indenture in connection with such action, any holder of a Note which is shown by the evidence to be included in the Notes the holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 9.2, revoke such action so far as concerns such Note. Except as aforesaid, any such action taken by the holder of any Note shall be conclusive and binding upon such holder and upon all future holders and owners of such Note and of any Notes issued in exchange or substitution therefor, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor. ARTICLE X NOTEHOLDERS' MEETINGS 51 SECTION 10.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be called at any time and from time to time pursuant to the provisions of this Article X for any of the following purposes: (1) to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any default or Event of Default hereunder and its consequences, or to take any other action authorized to be taken by Noteholders pursuant to any of the provisions of Article VII; (2) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article VIII; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 11.2; (4) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law; or (5) to take any other action authorized by this Indenture or under applicable law. SECTION 10.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time call a meeting of Noteholders to take any action specified in Section 10.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York, New York, as the Trustee shall determine. Notice of every meeting of the Noteholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 9.1, shall be mailed to holders of Notes at their addresses as they shall appear on the Note register. Such notice shall also be mailed to the Company. Such notices shall be mailed not less than twenty (20) nor more than ninety (90) days prior to the date fixed for the meeting. Any meeting of Noteholders shall be valid without notice if the holders of all Notes then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the holders of all Notes outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice. SECTION 10.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the holders of at least 10% in aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Noteholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within twenty (20) days after receipt of such request, then the Company or such Noteholders may determine the time and the place for such meeting and may call such meeting 52 to take any action authorized in Section 10.1, by mailing notice thereof as provided in Section 10.2. SECTION 10.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any meeting of Noteholders a person shall (a) be a holder of one or more Notes on the record date pertaining to such meeting or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Notes. The only persons who shall be entitled to be present or to speak at any meeting of Noteholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. SECTION 10.5 REGULATIONS. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Noteholders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Noteholders as provided in Section 10.3, in which case the Company or the Noteholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of a majority in principal amount of the Notes represented at the meeting and entitled to vote at the meeting. Subject to the provisions of Section 9.4, at any meeting each Noteholder or proxyholder shall be entitled to one vote for each $50 principal amount of Notes held or represented by him, her or it; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Notes held by him, her or it or instruments in writing as aforesaid duly designating him, her or it as the proxy to vote on behalf of other Noteholders. Any meeting of Noteholders duly called pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to time by the holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice. SECTION 10.6 VOTING. The vote upon any resolution submitted to any meeting of Noteholders shall be by written ballot on which shall be subscribed the signatures of the holders of Notes or of their representatives by proxy and the principal amount of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Noteholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and 53 affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 10.2. The record shall show the principal amount of the Notes voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 10.7 NO DELAY OF RIGHTS BY MEETING. Nothing in this Article X contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Noteholders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Noteholders under any of the provisions of this Indenture or of the Notes. ARTICLE XI SUPPLEMENTAL INDENTURES SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The Company, when authorized by the resolutions of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes: (a) to make provision with respect to the conversion rights of the holders of Notes pursuant to the requirements of Section 15.6; (b) subject to Article IV, to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Notes, any property or assets; (c) to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article XII; (d) to add to the covenants of the Company such further covenants, restrictions or conditions as the Board of Directors and the Trustee shall consider to be for the benefit of the holders of Notes, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default; 54 (e) to provide for the issuance under this Indenture of Notes in coupon form (including Notes registrable as to principal only) and to provide for exchange of such Notes with the Notes issued hereunder in fully registered form and to make all appropriate changes for such purpose; (f) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture which shall not materially adversely affect the interests of the holders of the Notes; (g) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Notes; or (h) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualifications of this Indenture under the Trust Indenture Act, or under any similar federal statute hereafter enacted. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section 11.1 may be executed by the Company and the Trustee without the consent of the holders of any of the Notes at the time outstanding, notwithstanding any of the provisions of Section 11.2. SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. With the consent (evidenced as provided in Article IX) of the holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding (determined in accordance with Section 9.4), the Company, when authorized by the resolutions of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the holders of the Notes; provided, however, that no such supplemental indenture shall, in each case, without the consent of the holder of each Note so affected: (i) extend the fixed maturity of any Note, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or purchase thereof, or change the obligation of the Company to redeem any Note on a redemption date in a manner adverse to the holders of Notes, or change the obligation of the Company to purchase any Note upon the happening of a Change in Control in a manner adverse to the holders of Notes, or impair or adversely affect the right of any Noteholder to institute suit for the payment thereof, or make the principal thereof or interest or premium, if any, thereon 55 payable in any coin or currency other than that provided in the Notes, or change or impair in a manner adverse to the Noteholders the right to convert the Notes into Common Stock or reduce the number of shares of Common Stock or any other property receivable by a Noteholder upon conversion subject to the terms set forth herein, including Section 15.6, or modify the provisions of this Indenture with respect to the subordination of the Notes in a manner adverse to the Noteholders; or (ii) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any supplemental indenture, waiver or modification of any of the provisions of this Section or Section 7.7. Up to and prior to the close of business on the Exchange Date, only the holders of shares of Preferred Stock shall be entitled to approve any amendments or supplements to this Indenture as provided above. Any such vote of the holders of shares of Preferred Stock shall require the affirmative vote or consent of the holders of at least 66 2/3 percent (unless a higher percentage shall then be required by applicable law) of all outstanding shares of Preferred Stock voting separately as a class. Upon the written request of the Company, accompanied by a copy of the resolutions of the Board of Directors certified by its Secretary or Assistant Secretary authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Noteholders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Noteholders under this Section 11.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURES. Any supplemental indenture executed pursuant to the provisions of this Article XI shall comply with the Trust Indenture Act, as then in effect. Upon the execution of any supplemental indenture pursuant to the provisions of this Article XI, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Notes 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 11.4 NOTATION ON NOTES. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article XI may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company's expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly 56 appointed by the Trustee pursuant to Section 16.11) and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding. SECTION 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE FURNISHED TRUSTEE. The Trustee, subject to the provisions of Sections 8.1 and 8.2, may receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article XI. ARTICLE XII MERGER, SALE OR CONSOLIDATION SECTION 12.1 LIMITATION ON MERGER, SALE OR CONSOLIDATION. The Company shall not consolidate with or merge with or into another person or permit any other person to consolidate with or merge with or into the Company, or sell, lease, convey or transfer all or substantially all of its assets (computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another person or group of affiliated persons, unless (i) either (A) in the case of a consolidation or merger, the Company is the surviving entity or (B) the resulting, surviving or transferee entity is a corporation organized under the laws of the United States, any state thereof or the District of Columbia and expressly assumes by supplemental indenture all of the obligations of the Company in connection with the Notes and the Indenture; (ii) no default or Event of Default shall exist or shall occur immediately after giving effect on a pro forma basis to such transaction; and (iii) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, lease, conveyance or transfer and, if a supplemental indenture is required, such supplemental indenture comply with the Indenture and that all conditions precedent relating to such transactions have been satisfied. SECTION 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any such consolidation, merger, sale, conveyance or lease and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, and interest on all of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the party of the first part. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of International Shipholding Corporation any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Notes which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In the event of any 57 such consolidation, merger, sale or conveyance (but not in the event of such lease), the person named as the "Company" in the first paragraph of this Indenture, or any successor which shall thereafter have become such in the manner prescribed in this Article XII and which shall have transferred its rights and obligations hereunder to another successor in the manner prescribed in this Article XII, may be dissolved, wound up and liquidated at any time thereafter and such person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture. In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate. ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE SECTION 13.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated (other than any Notes which have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall irrevocably deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon redemption of all of the Notes (other than any Notes which shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due to such date of maturity or redemption date, as the case may be, and if in either case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect with respect to the Notes (except as to (i) remaining rights of registration of transfer, substitution and exchange and conversion of Notes and maintenance of an office therefor, (ii) rights hereunder of Noteholders to receive payments of principal of and premium, if any, and interest on, the Notes and the other rights, duties and obligations of Noteholders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel as required by Section 16.5 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture; the Company, however, hereby agreeing to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Notes. SECTION 13.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1 shall be held in trust and 58 applied by it to the payment, notwithstanding the provisions of Article IV, either directly or through any paying agent (including the Company if acting as its own paying agent), to the holders of the particular Notes for the payment or redemption of which such monies have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest and premium, if any. SECTION 13.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction and discharge of this Indenture, all monies then held by any paying agent of the Notes (other than the Trustee) shall, upon demand of the Company, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such monies. SECTION 13.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of applicable law, any monies deposited with or paid to the Trustee or any paying agent for payment of the principal of, premium, if any, or interest on Notes and not applied but remaining unclaimed by the holders of Notes for two years after the date upon which the principal of, premium, if any, or interest on such Notes, as the case may be, shall have become due and payable, shall be returned to the Company by the Trustee or any paying agent upon the Company's request and all liability or responsibility of the Trustee or any paying agent shall thereupon cease with respect to such monies; and the holder of any of the Notes shall thereafter have the right to look only to the Company for any payment which such holder may be entitled to collect unless an applicable abandoned property law designates another person. SECTION 13.5 REINSTATEMENT. If (i) the Trustee or the paying agent is unable to apply any money in accordance with Section 13.2 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application and (ii) the holders of at least a majority in principal amount of the then outstanding Notes so request by written notice to the Trustee, the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.1 until such time as the Trustee or the paying agent is permitted to apply all such money in accordance with Section 13.2; provided, however, that if the Company makes any payment of interest on or principal of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the holders of such Notes to receive such payment from the money held by the Trustee or paying agent. ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 14.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No recourse for the payment of the principal of or premium, if any, or interest on any Note, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the 59 Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes. ARTICLE XV CONVERSION OF NOTES SECTION 15.1 HOLDER'S RIGHT TO CONVERT. Subject to and upon compliance with the provisions of this Indenture, the holder of any Note shall have, at his, her or its option, the right, at any time on or prior to the close of business on the Maturity Date (except that, with respect to any Note or portion of a Note which shall be called for redemption pursuant to Section 3.1 or 3.2, such right shall terminate at the close of business on the Business Day immediately preceding the date fixed for redemption of such Note or portion of a Note unless the Company shall default in payment of the amount due upon redemption thereof, in which case such right shall terminate upon payment of the amount due upon such redemption), to convert the principal amount of any such Note, or any portion of such principal amount which is $50 or an integral multiple thereof, into that number of fully paid and non-assessable shares of Common Stock (as such shares shall then be constituted) obtained by dividing the principal amount of the Note or portion thereof surrendered for conversion by the Conversion Price in effect at such time, by surrender of the Note so to be converted in whole or in part in the manner provided in Section 15.2. A holder of Notes is not entitled to any rights of a holder of Common Stock until such holder has converted his, her or its Notes to Common Stock, and only to the extent such Notes are deemed to have been converted to Common Stock under this Article XV. SECTION 15.2 EXERCISE OF CONVERSION RIGHT; ISSUANCE OF COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the conversion right with respect to any Note held in certificated form, the holder of any such Note to be converted in whole or in part shall surrender such Note, duly endorsed, at the office or agency maintained by the Company pursuant to Section 5.2, accompanied by the funds, if any, required by the last paragraph of this Section 15.2, and shall give written notice of conversion in substantially the form provided on the reverse of the form of Note attached hereto as Exhibit A (or such other notice which is acceptable to the Company) to such office or agency that the holder elects to convert such Note or such portion thereof specified in such notice. Such notice shall also state the name or names (with addresses) in which the certificate or certificates for shares of Common Stock which shall be issuable on such conversion shall be issued, and shall be accompanied by payment of any transfer taxes required pursuant to Section 15.7. Each such Note surrendered for conversion shall, unless the shares of Common Stock issuable on conversion are to be issued in the same name in which such Notes are registered, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or his, her or its duly authorized attorney. In order to exercise the conversion right with respect to any Notes represented by a Global Note, the holder of the Note to be converted shall comply with the procedures established by the Depositary for conversion. 60 As promptly as practicable after satisfaction of the requirements for conversion set forth above, the Company shall issue and shall deliver to such holder or, if shares issuable on conversion are to be issued in a name other than that of the Noteholder (as if such transfer were a transfer of the Note or Notes (or portion thereof) so converted), to such other person, at the office or agency maintained by the Company for such purpose pursuant to Section 5.2, a certificate or certificates representing the number of shares of Common Stock issuable upon the conversion of such Note or portion thereof in accordance with the provisions of this Article XV and a check or cash in respect of any fractional share of Common Stock arising upon such conversion, as provided in Section 15.3 (which payment, if any, shall be paid no later than five Business Days after satisfaction of the requirements for conversion set forth above). In the event any Note of a denomination greater than $50 shall be surrendered for partial conversion, the Company shall, subject to Section 2.3, execute and the Trustee shall authenticate and deliver to the holder of the Note so surrendered, without charge to him, her or it, a new Note or Notes in an aggregate principal amount equal to the unconverted portion of the surrendered Note. Each conversion pursuant to Section 15.1 shall be deemed to have been effected on the date on which the requirements set forth above in this Section 15.2 or the requirements of the Depositary, as the case may be, have been satisfied as to such Note (or portion thereof), and the person in whose name any certificate or certificates for shares of Common Stock issuable upon such conversion shall be deemed to have become on said date the holder of record of the shares represented thereby; provided, however, that if any such surrender occurs on any date when the stock transfer books of the Company shall be closed, the conversion shall be effected on the next succeeding day on which such stock transfer books are open, and the person in whose name the certificates are to be issued shall be the record holder thereof on such date for all purposes, but such conversion shall be at the Conversion Price in effect on the date upon which such Note shall have been surrendered. Upon such conversion, the Company will be deemed to have satisfied its obligation to pay in full the principal of, premium, if any, and any accrued and unpaid interest with respect to such Note. Upon the conversion of a Note represented by a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby. In the case of any Note or portion thereof which is converted after any record date for an interest payment and prior to the close of business on the Business Day immediately preceding the corresponding interest payment date, the interest payment due on such payment date shall be payable on such interest payment date to the holder of record of such Note or portion thereof as of such record date notwithstanding such conversion; provided that any Note or portion thereof surrendered for conversion during the period between the close of business on the record date for an interest payment and prior to the close of business on the Business Day immediately preceding the corresponding interest payment date shall be accompanied by payment of an amount equal to the interest payable on such interest payment date on the principal amount of Notes being converted; provided, however, that no such payment need be made if there shall exist at the time of conversion a default in the payment of interest on the Notes or such Note or portion thereof being converted shall have been called for redemption pursuant to Section 3.1 or 3.2 and a notice of redemption has been sent to the holders of the Notes pursuant to Section 3.3. 61 The Trustee shall not be required to accept for conversion any Notes not accompanied by any payment required by the preceding sentence. Except as provided above in this Section 15.2, no payment or adjustment shall be made for interest accrued on any Note surrendered for conversion or on account of any dividends on any shares of Common Stock issued upon the conversion of such Note. SECTION 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional shares of Common Stock or scrip representing fractional shares shall be issued upon conversion of Notes. If any fractional share of Common Stock otherwise would be issuable upon the conversion of any Note or Notes (or portion thereof), the Company shall make a payment therefor in cash to the holder of such converted Notes based on the then-current market value of a whole share of Common Stock. For purposes of this Section 15.3, the then-current market value of a whole share of Common Stock shall be the Closing Price of the Common Stock on the first Trading Day immediately preceding the day on which the Notes (or specified portions thereof) are deemed to have been converted and such Closing Price shall be determined as provided in Section 15.5(h)(1). If more than one Note shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered for conversion. SECTION 15.4 CONVERSION PRICE. The conversion price shall be as specified in the form of Note (herein called the "Conversion Price") attached as Exhibit A hereto, subject to adjustment as provided in this Article XV. SECTION 15.5 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price shall be adjusted from time to time by the Company as follows: (a) In the event the Company shall hereafter pay a dividend in shares of Common Stock or make a distribution in shares of Common Stock to all holders of Common Stock, the Conversion Price in effect at the opening of business on the Business Day immediately following the Record Date fixed for the determination of stockholders entitled to receive such dividend or other distribution shall be reduced by multiplying such Conversion Price by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on such Record Date and the denominator shall be the sum of such number of shares of Common Stock and the total number of shares of Common Stock constituting such dividend or other distribution. If any dividend or distribution of the type described in this Section 15.5(a) is declared but not so paid or made, the Conversion Price shall again be adjusted to the Conversion Price which would have been in effect if such dividend or distribution had not been declared. (b) In the event the Company shall issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them (for a period expiring within forty-five (45) days after the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants) to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price on the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants, the Conversion Price shall be reduced so that the Conversion Price shall equal the price determined by multiplying the Conversion Price in effect 62 at the opening of business on the Business Day immediately following such Record Date by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the Record Date plus the number of shares which the aggregate subscription, purchase or exercise price of the shares of Common Stock called for by all such issued rights or warrants would purchase at such Current Market Price, and of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the Record Date plus the total number of additional shares of Common Stock so offered for subscription or purchase. Such adjustment shall become effective at the opening of business on the Business Day immediately following the Record Date fixed for determination of stockholders entitled to receive such rights or warrants. To the extent that shares of Common Stock are not delivered pursuant to such rights or warrants, upon the expiration or termination of such rights or warrants the Conversion Price shall be readjusted to the Conversion Price which would have been in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of only the number of shares of Common Stock actually delivered upon the issuance of such rights or warrants. In the event that such rights or warrants are not so issued, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants had not been fixed. In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than the Current Market Price, and in determining the aggregate subscription, purchase or exercise price of such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants, the value of such consideration, if other than cash, to be determined by the Board of Directors in its sole discretion. (c) In the event the outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the Business Day immediately following the day upon which such subdivision becomes effective shall be proportionately reduced, and conversely, in the event the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the Business Day immediately following the day upon which such combination becomes effective shall be proportionately increased. (d) In the event the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock shares of any class of capital stock of the Company (other than any dividends or distributions to which Section 15.5(a) applies) or evidences of its indebtedness, cash or other assets (including securities, but excluding (1) any rights or warrants referred to in Section 15.5(b) or (2) dividends and distributions paid exclusively in cash (such shares of capital stock, evidences of indebtedness, cash or other assets hereinafter in this Section 15.5(d) referred to as the "Securities")), then, in each such case, the Conversion Price shall be reduced so that the Conversion Price shall be equal to the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the Record Date with respect to such distribution by a fraction of which the numerator shall be the Current Market Price (determined as provided in Section 15.5(h)(2)) on such Record Date less the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) on such Record Date of the portion of the Securities so distributed applicable to one 63 share of Common Stock and the denominator shall be such Current Market Price, such reduction to become effective at the opening of business on the Business Day immediately following such Record Date; provided, however, that in the event the then fair market value (as so determined by the Board of Directors) of the portion of the Securities so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price on the Record Date, in lieu of the foregoing adjustment, adequate provision shall be made so that each Noteholder shall have the right to receive upon conversion of a Note (or any portion thereof) the amount of Securities such holder would have received had such holder converted such Note (or portion thereof) immediately prior to such Record Date. In the event that such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such dividend or distribution had not been declared. If the Board of Directors determines the fair market value of any distribution for purposes of this Section 15.5(d) by reference to the trading market for any securities comprising all or part of such distribution, it must in doing so consider the prices in such market over the same period (the "Reference Period") used in computing the Current Market Price pursuant to Section 15.5(h)(2) to the extent possible, unless the Board of Directors in a Board Resolution determines in good faith that determining the fair market value during the Reference Period would not be in the best interest of the Noteholders. For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any dividend or distribution to which this Section 15.5(d) is applicable that also includes shares of Common Stock to which Section 15.5(a) applies, or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 15.5(b) applies (or both), shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets, shares of capital stock, rights or warrants other than such shares of Common Stock to which 15.5(a) applies or rights or warrants to which Section 15.5(b) applies (and any Conversion Price reduction required by this Section 15.5(d) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Price reduction required by Sections 15.5(a) and (b) with respect to such dividend or distribution shall then be made, except (A) the Record Date of such dividend or distribution shall be substituted as "the Record Date fixed for the determination of stockholders entitled to receive such dividend or other distribution" and "Record Date" within the meaning of Section 15.5(a) and as "the Record Date fixed for the determination of stockholders entitled to receive such rights or warrants" and "Record Date" within the meaning of Section 15.5(b) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed "outstanding at the close of business on such Record Date" within the meaning of Section 15.5(a). In the event that the Company implements a stockholders' rights plan (a "New Rights Plan") or amends any existing stockholders' rights plan (as amended, an "Amended Rights Plan" and together with any New Rights Plan, a "Rights Plan"), such Rights Plan shall provide that upon conversion of the Notes the holders will receive, in addition to the Common Stock issuable upon such conversion, the rights under such Rights Plan (notwithstanding the occurrence of an event causing such rights to separate from the Common Stock at or prior to the time of conversion), unless prior to conversion of the Preferred Stock the rights have expired, terminated or been redeemed. Any distribution of rights or warrants pursuant to a Rights Plan complying 64 with the requirements set forth in the immediately preceding sentence of this paragraph shall not constitute a distribution of rights or warrants for purposes of this Section 15.5(d). Rights or warrants distributed by the Company to all holders of Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company's capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events ("Trigger Event"), (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 15.5(d) (and no adjustment to the Conversion Price under this Section 15.5(d) will be required) until the occurrence of the earliest Trigger Event. If such right or warrant is subject to subsequent events, upon the occurrence of which such right or warrant shall become exercisable to purchase different securities, evidences of indebtedness or other assets or entitle the holder to purchase a different number or amount of the foregoing or to purchase any of the foregoing at a different purchase price, then the occurrence of each such event shall be deemed, for the purposes of this Section 15.5(d), to be the date of issuance and record date with respect to a new right or warrant (and a termination or expiration of the existing right or warrant without exercise by the holder thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or the occurrence of any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto, that resulted in an adjustment to the Conversion Price under this Section 15.5(d), (1) in the case of any such rights or warrants which shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Price shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution equal to the per share redemption or repurchase price received by a holder of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants) made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants all of which shall have expired or been terminated without exercise, the Conversion Price shall be readjusted as if such rights and warrants had never been issued. (e) In the event the Company shall, by dividend or otherwise, make a distribution to all holders of its Common Stock consisting exclusively of cash (excluding any dividend or distribution made in connection with a merger or consolidation to which Section 15.6 applies or as part of a distribution referred to in Section 15.5(d)), in an amount that when combined with all other distributions of cash to holders of its Common Stock (excluding any dividend or distribution made in connection with a merger or consolidation to which Section 15.6 applies or as part of a distribution referred to in Section 15.5(d)) in such calendar year exceeds on a per-share basis the greater of $0.50 per share or three percent (3%) of the Current Market Price on the date prior to the date of the declaration of such distribution, then, immediately after the close of business on the Record Date with respect to such distribution, the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on such Record Date by a fraction (i) the numerator of which shall be equal to the Current Market Price on the Record Date less an amount equal to the quotient of (x) the aggregate amount of such distribution and (y) the number of shares of Common Stock outstanding on the Record Date and (ii) the denominator of which shall be equal to the Current Market Price on such Record Date. In the event that such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be the 65 Conversion Price which would have been in effect if such dividend or distribution had not been declared. (f) In the event a tender offer made by the Company or any Subsidiary for all or any portion of the Common Stock shall expire and such tender offer (as amended upon the expiration thereof) shall require the payment to stockholders of consideration (based on the acceptance (up to any maximum specified in the terms of the tender offer) of Purchased Shares (as defined below)) per share of Common Stock having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that, as of the date upon which occurred the last time tenders could have been made pursuant to such tender offer (the "Expiration Time"), exceeds the Closing Price of a share of Common Stock on the Trading Day next succeeding the Expiration Time then, immediately prior to the opening of business on the Business Day immediately following the Expiration Time, the Conversion Price shall be reduced so that the Conversion Price shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the date of the Expiration Time by a fraction of which the numerator shall be the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time multiplied by the Current Market Price on the Trading Day next succeeding the Expiration Time and the denominator shall be the sum of (x) the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender offer) of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at the Expiration Time and the Current Market Price on the Trading Day next succeeding the Expiration Time, such reduction (if any) to become effective at the opening of business on the Business Day immediately following the Expiration Time. In the event that the Company is obligated to purchase shares pursuant to any such tender offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such tender offer had not been made. If the application of this Section 15.5(f) to any tender offer would result in an increase in the Conversion Price, no adjustment shall be made for such tender offer under this Section 15.5(f). (g) In the event of a tender or exchange offer made by a person other than the Company or any Subsidiary for an amount of Common Stock which increases the offeror's ownership of Common Stock to more than 25% of the Common Stock outstanding and shall involve the payment by such person of consideration per share of Common Stock having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive, and described in a Board Resolution) at the last time (the "Tender Expiration Time") tenders or exchanges may be made pursuant to such tender or exchange offer (as amended) that exceeds the Current Market Price on the Trading Day next succeeding the Tender Expiration Time, and with respect to which, as of the Tender Expiration Time, the Board of Directors is not recommending rejection of the offer, the Conversion Price shall be reduced so that the Conversion Price shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the Tender Expiration Time by a fraction of which the numerator shall be the number of shares of 66 Common Stock outstanding (including any tendered or exchanged shares) as of the Tender Expiration Time multiplied by the Current Market Price on the Trading Day next succeeding the Tender Expiration Time and the denominator shall be the sum of (x) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of the Tender Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Tender Purchased Shares") and (y) the product of the number of shares of Common Stock outstanding (less any Tender Purchased Shares) on the Tender Expiration Time and the Current Market Price on the Trading Day next succeeding the Tender Expiration Time, such reduction to become effective at the opening of business on the Business Day immediately following the Tender Expiration Time. In the event that such person is obligated to purchase shares pursuant to any such tender or exchange offer, but such person is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Price shall again be adjusted to be the Conversion Price which would have been in effect if such tender or exchange offer had not been made. Notwithstanding the foregoing, the adjustment described in this Section 15.5(g) shall not be made if, as of the Tender Expiration Time, the offering documents with respect to such tender offer or exchange offer disclose a plan or intention to cause the Company to engage in any transaction described in Article XII. (h) For purposes of this Section 15.5 and the other provisions of this Indenture, the following terms shall have the meaning indicated: (1) "Closing Price" with respect to any securities on any day shall mean the closing sale price regular way on such day or, in case no sale of such securities takes place on such day, the average of the reported closing bid and asked prices, regular way, in each case on the Nasdaq National Market or New York Stock Exchange, as applicable, or, if such security is not listed or admitted to trading on such Nasdaq National Market or New York Stock Exchange, on the principal national securities exchange, trading market or quotation system on which such security is quoted or listed or admitted to trading, or, if not quoted or listed or admitted to trading on any national securities exchange, trading market or quotation system, the average of the closing bid and asked prices of such security on the over-the-counter market on such day as reported by the National Quotation Bureau Incorporated, or a similar generally accepted reporting service, or if not so available, in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose, or a price determined in good faith by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution. (2) "Current Market Price" shall mean, subject to the second paragraph hereof, the lesser of (a) the Closing Price per share of Common Stock on the date in question and (b) the average of the daily Closing Prices per share of Common Stock for the ten (10) consecutive Trading Days immediately prior to the date in question; provided, however, that (1) if the "ex" date (as hereinafter defined) for any event (other than the issuance or distribution requiring such computation) that 67 requires an adjustment to the Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs during such ten (10) consecutive Trading Days, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event, (2) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the "ex" date for the issuance or distribution requiring such computation and prior to the day in question, the Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event, and (3) if the "ex" date for the issuance or distribution requiring such computation is prior to the day in question, after taking into account any adjustment required pursuant to clause (1) or (2) of this proviso, the Closing Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the amount of any cash and the fair market value (as determined by the Board of Directors in a manner consistent with any determination of such value for purposes of Section 15.5(d), (f) or (g), whose determination shall be conclusive and described in a Board Resolution) of the evidences of indebtedness, shares of capital stock or assets being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For purposes of any computation under Section 15.5(f) or (g), the Current Market Price on any date shall be deemed to be the average of the daily Closing Prices per share of Common Stock for such day and the next two succeeding Trading Days; provided, however, that if the "ex" date for any event (other than the tender offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the Expiration Time or the Tender Expiration Time, as the case may be, for the tender or exchange offer requiring such computation and prior to the day in question, the Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this paragraph, the term "ex" date, (1) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the relevant exchange or in the relevant market from which the Closing Price was obtained without the right to receive such issuance or distribution, (2) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on such exchange or in such market after the time at which such subdivision or combination becomes effective, and (3) when used with respect to any tender or exchange offer means the first date on which the Common Stock trades regular way on such exchange or in such market after the Expiration Time or Tender Expiration Time, as the case may be, of such offer. Notwithstanding the foregoing, whenever successive adjustments to the Conversion Price are called for pursuant to this Section 15.5, such adjustments shall be made to the Current Market Price as may be necessary or 68 appropriate to effectuate the intent of this Section 15.5 and to avoid unjust or inequitable results as determined in good faith by the Board of Directors. (3) "fair market value" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction. (4) "Record Date" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise). (5) "Trading Day" shall mean (x) if the applicable security is quoted on the Nasdaq National Market, a day on which trades may be made thereon or (y) if the applicable security is listed or admitted for trading on the New York Stock Exchange or another national securities exchange or securities trading market, a day on which the New York Stock Exchange or such other national securities exchange or securities trading market is open for business or (z) if the applicable security is not so listed, admitted for trading or quoted, any Business Day. (i) The Company may make such reductions in the Conversion Price, in addition to those required by Sections 15.5(a), (b), (c), (d), (e), (f) and (g), as the Board of Directors considers to be advisable to avoid or diminish any income tax to holders of Common Stock resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for income tax purposes. To the extent permitted by applicable law, the Company from time to time may reduce the Conversion Price by any amount for any period of time if the period is at least twenty (20) Business Days, the reduction is irrevocable during the period and the Board of Directors shall have made a determination that such reduction is in the best interests of the Company, which determination shall be conclusive and described in a Board Resolution. Whenever the Conversion Price is reduced pursuant to the preceding sentence, the Company shall mail to the holder of each Note, at his, her or its last address appearing on the Note register provided for in Section 2.5, a notice of the reduction at least fifteen (15) days prior to the date the reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and the period during which it will be in effect. (j) No adjustment in the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this Section 15.5(j) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article XV shall be made by the Company and shall be rounded to the nearest cent. No adjustment need be made for a change in the par value or no par value of the Common Stock or a change from par value to no par value or from no par value to par value. 69 (k) Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly file with the Trustee and any conversion agent other than the Trustee an Officers' Certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officers' Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Price and may assume without inquiry that the last Conversion Price of which it has knowledge remains in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the date on which such adjustment becomes or became effective and shall mail such notice of such adjustment of the Conversion Price to the holder of each Note, at his, her or its last address appearing on the Note register provided for in Section 2.5, within twenty (20) days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment. (l) In any case in which this Section 15.5 provides that an adjustment shall become effective immediately after a Record Date for an event, the Company may defer until the occurrence of such event (i) issuing to the holder of any Note converted after such Record Date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon conversion before giving effect to such adjustment and (ii) paying to such holder any amount in cash in lieu of any fractional shares of Common Stock pursuant to Section 15.3. (m) For purposes of this Section 15.5, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company, unless a dividend or distribution that requires an adjustment to the Conversion Price pursuant to this Section 15.5 is paid or made with respect to such treasury shares, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. SECTION 15.6 RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If any of the following events occur, namely (i) any reclassification or change of the outstanding shares of Common Stock (other than a subdivision or combination to which Section 15.5(c) applies or a change in par value), (ii) any consolidation, merger or combination of the Company with another person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, or (iii) any sale or conveyance of all or substantially all of the assets of the Company to any other person as a result of which holders of Common Stock shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then the Company, its successor or purchasing person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in effect at the date of execution of such supplemental indenture) providing that each Note shall be convertible into the kind and amount of shares of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance by a holder of the number of shares of Common Stock issuable upon conversion of such Notes (assuming, for such purposes, a sufficient number of authorized shares of Common Stock are available to convert all such Notes) immediately prior to such 70 reclassification, change, consolidation, merger, combination, sale or conveyance assuming such holder of Common Stock did not exercise his rights of election, if any, as to the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance is not the same for each share of Common Stock in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purposes of this Section 15.6 the kind and amount of stock, other securities or other property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, combination, sale or conveyance for each non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article XV. The Company shall cause notice of the execution of such supplemental indenture to be mailed to each holder of Notes, at its address appearing on the Note register provided for in Section 2.5 of this Indenture, within twenty (20) days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section 15.6 shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances. If this Section 15.6 applies to any event or occurrence, Section 15.5 shall not apply. The Company shall not be a party to any event or occurrence to which this Section 15.6 applies unless the terms of such event or occurrence are consistent with this Section 15.6. SECTION 15.7 TAXES ON SHARES ISSUED. The issuance of stock certificates representing the shares of Common Stock issuable upon conversion of the Notes shall be made without charge to the holders of such shares for any issuance tax in respect thereof imposed by the government of the United States or any political subdivision thereof or other cost incurred by the Company in connection with such conversion and/or the issuance of such shares. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of Common Stock in any name other than the name in which the Note with respect to which such shares of Common Stock are issued is registered, and the Company shall not be required to issue or deliver any such shares unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. SECTION 15.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF COMMON STOCK. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares of Common Stock or shares of Common Stock held in treasury, or both, sufficient shares of Common Stock to provide for the conversion of the Notes from time to time as such Notes are presented for conversion, and no Note shall be issued unless such sufficient number of shares of Common Stock has been reserved and is available for issuance upon conversion of Notes under this Article XV. 71 The Company covenants that it will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its authorized but unissued shares of Common Stock or its issued shares of Common Stock held in its treasury, or both, a sufficient number of shares of Common Stock for the purpose of effecting conversions of the Notes not theretofore converted into Common Stock. For purposes of this reservation of Common Stock, the number of shares of Common Stock which shall be deliverable upon the conversion of all outstanding Notes shall be computed as if at the time of computation all outstanding Notes were held by a single holder. The issuance of shares of Common Stock upon conversion of the Notes is duly authorized in all respects. The Company shall from time to time, in accordance with the laws of the State of Delaware, use its best efforts to increase the authorized number of shares of Common Stock if at any time the number of shares of authorized and unissued Common Stock shall not be sufficient to permit the conversion of all of the then outstanding Notes. Before taking any action which would cause an adjustment reducing the Conversion Price below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Notes, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Price. The Company covenants that all shares of Common Stock issued upon conversion of Notes will, upon such issuance, be fully paid and non-assessable shares of the capital stock of the Company, free from all taxes, liens and charges. The Company covenants that if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any Federal or state law before such shares may be validly issued upon conversion, the Company will, in good faith and as expeditiously as possible, endeavor to secure such registration or approval, as the case may be. The Company further covenants that, if at any time the Common Stock shall be listed on the Nasdaq National Market, the New York Stock Exchange or any other national securities exchange or automated quotation system, the Company will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Notes. SECTION 15.9 RESPONSIBILITY OF TRUSTEE. Except as otherwise expressly provided for in this Article XV, the Company is solely responsible for performing the duties and responsibilities contained in this Article XV. The Trustee and any other conversion agent shall not at any time be under any duty or responsibility to any holder of Notes to determine whether any facts exist which may require any adjustment of the Conversion Price, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or employed herein or in any supplemental indenture, in making the same. The Trustee and any other conversion agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, 72 which may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other conversion agent make no representations with respect thereto. Subject to the provisions of Section 8.1, neither the Trustee nor any conversion agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article XV. Without limiting the generality of the foregoing, neither the Trustee nor any conversion agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 15.6 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Noteholders upon the conversion of their Notes after any event referred to in such Section 15.6 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 8.1, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, an Officers' Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. SECTION 15.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In the event: (a) the Company shall declare a dividend (or any other distribution) on its Common Stock; or (b) the Company shall authorize the granting to the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class of the Company's capital stock or any other rights or warrants; or (c) of any reclassification of the Common Stock (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or (d) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company; the Company shall cause to be filed with the Trustee and to be mailed to each holder of Notes, at his, her or its address appearing on the Note register provided for in Section 2.5 of this Indenture, as promptly as possible but in any event at least fifteen (15) days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. 73 Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. ARTICLE XVI MISCELLANEOUS PROVISIONS SECTION 16.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the covenants, stipulations, promises and agreements of the Company in this Indenture contained shall bind its successors and assigns whether so expressed or not. SECTION 16.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company. SECTION 16.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Notes on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by any standard form of telecommunication (until another address is filed by the Company with the Trustee). Notices shall be directed to 650 Poydras Street, New Orleans, Louisiana 70130 Attention: Chief Financial Officer, or to an agent of the Company designated as permitted by this Indenture. Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by any standard form of telecommunication. Notices shall be directed to the Corporate Trust Office, which office is, at the date as of which this Indenture is dated, located at 10161 Centurion Parkway, 2nd Floor, Jacksonville, Florida 32256, Attention: Corporate Trust Department (International Shipholding Corporation 6.0% Convertible Subordinated Notes Due 2014). The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Noteholder shall be mailed to him, her or it by first class mail, postage prepaid, at his, her or its address as it appears on the Note register and shall be sufficiently given to him, her or it if so mailed within the time prescribed. Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 16.4 GOVERNING LAW. This Indenture and each Note shall be deemed to be a contract made under the laws of New York, and for all purposes shall be construed in accordance with the laws of New York, without regard to the conflict of laws provisions thereof. 74 SECTION 16.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT; CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, including those actions set forth in Section 314(c) of the Trust Indenture Act, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Each certificate or opinion provided for by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him, her or it to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 16.6 LEGAL HOLIDAYS. In any case where the date of maturity of interest on or principal of the Notes or the date fixed for redemption of any Note or the Change in Control Purchase Date will not be a Business Day, then payment of such interest on or principal of the Notes need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity, the date fixed for redemption or the Change in Control Purchase Date, and no interest shall accrue for the period from and after such date. SECTION 16.7 NO SECURITY INTEREST CREATED. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction. SECTION 16.8 TRUST INDENTURE ACT. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under the Trust Indenture Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Until such time as this Indenture shall be qualified under the Trust Indenture Act, this Indenture, the Company and the Trustee shall be deemed for all purposes hereof to be subject to and governed by the Trust Indenture Act to the same extent as would be the case if this Indenture were so qualified on the date hereof. SECTION 16.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any person, other than the parties hereto, any paying agent, any conversion agent, any authenticating agent, any Note registrar and their successors hereunder, the 75 holders of Notes and the holders of Senior Indebtedness, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 16.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 16.11 AUTHENTICATING AGENT. The Trustee may appoint an authenticating agent which shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.6, as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes. For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes "by the Trustee" and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustee's certificate of authentication. Such authenticating agent shall at all times be a person eligible to serve as trustee hereunder pursuant to Section 8.9. Any corporation into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation. 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 terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee shall promptly appoint a successor authenticating agent (which may be the Trustee), shall give written notice of such appointment to the Company and shall mail notice of such appointment to all holders of Notes as the names and addresses of such holders appear on the Note register. The Trustee agrees to pay to the authenticating agent from time to time reasonable compensation for its services (to the extent pre-approved by the Company in writing), and the Trustee shall be entitled to be reimbursed for such pre-approved payments, subject to Section 8.6. The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11 shall be applicable to any authenticating agent. 76 SECTION 16.12 EXECUTION IN COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The Bank of New York hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions hereinabove set forth. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 77 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly signed all as of the date first written above. INTERNATIONAL SHIPHOLDING CORPORATION By: /s/ Erik F. Johnsen Name: Erik F. Johnsen Title: Chairman of the Board and Chief Executive Officer THE BANK OF NEW YORK, as Trustee By: /s/ William Cardozo Name: William Cardozo Title: Agent 78 EXHIBIT A - FORM OF NOTE [FORM OF FACE OF NOTE] No. _____________ $________________ INTERNATIONAL SHIPHOLDING CORPORATION CUSIP: 460321 AD 4 6.0% Convertible Subordinated Note Due 2014 International Shipholding Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the "Company", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to________________, or registered assigns, the principal sum of ________________ Dollars on December 31, 2014 and to pay interest on said principal sum quarterly on March 31, June 30, September 30 and December 31 of each year, commencing on the first such date after the Exchange Date (as defined in the Indenture), at the rate per annum specified in the title of this Note, accrued from March 31, June 30, September 30 or December 31, as the case may be, next preceding the date of this Note to which interest has been paid or duly provided for, unless the date of this Note is a date to which interest has been paid or duly provided for, in which case interest shall accrue from the date of this Note, or unless no interest has been paid or duly provided for on this Note, in which case interest shall accrue from the Exchange Date, until payment of said principal sum has been made or duly provided for. Notwithstanding the foregoing, if the date hereof is after March 11, June 10, September 10 or December 11 of such year, as the case may be, and before the following March 31, June 30, September 30 or December 31, of such year, as the case may be, this Note shall bear interest from such March 31, June 30, September 30 or December 31, respectively; provided, however, that if the Company shall default in the payment of interest due on such March 31, June 30, September 30 or December 31, as the case may be, then this Note shall bear interest from the next preceding March 31, June 30, September 30 or December 31, as the case may be, to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for on this Note, from the Exchange Date. The interest so payable on March 31, June 30, September 30 and December 31 of any year will be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the record date, which shall be March 11, June 10, September 10 and December 11 (whether or not a Business Day) next preceding such March 31, June 30, September 30 and December 31, respectively, as provided in the Indenture; provided that any such interest not punctually paid or duly provided for shall be payable as provided in the Indenture. Payment of the principal of and interest accrued on this Note shall be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, New York, which shall initially be the office of the Trustee or its affiliate, or, at the option of the holder of this Note, at the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment shall A-1 be legal tender for the payment of public and private debts; provided, however, that at the option of the Company, payment of interest may be made by check mailed to the registered address of the person entitled thereto; provided further that, with respect to any holder of Notes with an aggregate principal amount equal to or in excess of $2,000,000, at the request of such holder in writing to the Company, interest on such holder's Notes shall be paid by wire transfer of immediately available funds in accordance with the wire transfer instruction supplied by such holder to the Trustee and paying agent (if different from Trustee). Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions subordinating the payment of principal of and premium, if any, and interest on this Note to the prior payment as and when due of all Senior Indebtedness as defined in the Indenture and provisions giving the holder of this Note the right to convert this Note into Common Stock of the Company on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. This Note shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed by the laws of said State. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture. IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under its corporate seal. INTERNATIONAL SHIPHOLDING CORPORATION Dated___________________________ By:___________________________________ Title Attest: ______________________________________ Secretary A-2 [FORM OF CERTIFICATE OF AUTHENTICATION] TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes described in the within-named Indenture. THE BANK OF NEW YORK, as Trustee By:____________________________________ Authorized Signatory A-3 [FORM OF REVERSE OF NOTE] INTERNATIONAL SHIPHOLDING CORPORATION 6.0% Convertible Subordinated Note Due 2014 This Note is one of a duly authorized issue of notes of the Company, designated as its 6.0% Convertible Subordinated Notes Due 2014 (herein called the "Notes"), limited to the aggregate principal amount of $44,000,000, all issued or to be issued under and pursuant to an Indenture, dated as of January 6, 2005 (herein called the "Indenture"), between the Company and The Bank of New York (herein called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Notes. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of and accrued interest on all Notes may be declared, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than a majority of the aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Notes; provided, however, that no such supplemental indenture shall, in each case, without the consent of the holder of each Note so affected: (i) extend the fixed maturity of any Note, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof or premium, if any, thereon, or reduce any amount payable on redemption or purchase thereof, or change the obligation of the Company to redeem any Note on a redemption date in a manner adverse to the holders of Notes, or change the obligation of the Company to purchase any Note upon the happening of a Change in Control in a manner adverse to the holders of Notes, or impair or adversely affect the right of any Noteholder to institute suit for the payment thereof, or make the principal thereof or interest or premium, if any, thereon payable in any coin or currency other than that provided in the Notes, or change or impair in a manner adverse to the Noteholders the right to convert the Notes into Common Stock or reduce the number of shares of Common Stock or any other property receivable by a Noteholder upon conversion subject to the terms set forth in the Indenture, including Section 15.6, or modify the provisions of the Indenture with respect to the subordination of the Notes in a manner adverse to the Noteholders; or (ii) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any supplemental indenture, waiver or modification of any of the provisions of Section 7.7 or Section 11.2 of the Indenture. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of the Notes, the holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the holders of all of the Notes waive any past default or Event of Default under the Indenture and its consequences except (i) a default by the Company in the payment of interest or premium, if any, A-4 on, or the principal of, any of the Notes, (ii) a failure by the Company to convert any Notes into Common Stock of the Company or (iii) a default by the Company in respect of a covenant or provision in the Indenture which cannot be modified or waived without the consent of the holders of all Notes then outstanding affected thereby. Any such consent or waiver by the holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. The indebtedness evidenced by the Notes is, to the extent and in the manner provided in the Indenture, expressly subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of the Company, as defined in the Indenture, whether outstanding at the date of the Indenture or thereafter incurred, and this Note is issued subject to the provisions of the Indenture with respect to such subordination. Each holder of this Note, by accepting the same, agrees to and shall be bound by such provisions and authorizes the Trustee on his, her or its behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and appoints the Trustee his, her or its attorney in fact for such purpose. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Note at the place, at the respective times, at the rate and in the coin or currency herein prescribed. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. The Notes are issuable in registered form without coupons in denominations of $50 principal amount and integral multiples thereof equal to the number of shares of Preferred Stock for which the Notes are exchanged. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, without payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations. Prior to December 31, 2006, the Notes may not be redeemed by the Company except in connection with a Change in Control. At any time on or after December 31, 2006 and prior to maturity, the Company, at its option, may redeem the Notes, in whole or in part, at any time or from time to time, upon mailing a notice of such redemption not less than thirty (30) nor more than sixty (60) days before the date fixed for redemption to the holders of Notes at their last registered addresses, all as provided in the Indenture, during the periods shown below, for cash at the following per-note redemption prices plus an amount equal to accrued and unpaid interest, if any, to (but excluding) the date fixed for redemption; provided that if the date fixed for redemption falls after an interest payment record date and on or prior to the corresponding interest payment date, then holders of the Notes at the close of business on that interest payment record date shall be entitled to receive the interest payable on such Notes on the corresponding interest payment date and the amount payable to holders of such Notes on the date fixed for redemption will not include any amount in respect of interest payable on such corresponding A-5 interest payment date; and provided further that, prior to December 31, 2007, Notes may not be redeemed by the Company except in connection with a Change in Control unless the Closing Price of Common Stock (or, if more than one class of Common Stock is then issued and outstanding, all classes of Common Stock) has exceeded 150% of the Conversion Price for at least 20 Trading Days during any period of 30 consecutive Trading Days ending within five Trading Days prior to the notice of redemption.
REDEMPTION DATE REDEMPTION PRICE --------------- ---------------- On and after December 31, 2006 and prior to $52.50 December 31, 2007 On and after December 31, 2007 and prior to $51.00 December 31, 2008 On and after December 31, 2008 $50.00
The Notes are not subject to redemption or retirement through the operation of any sinking fund. The Company may not give notice of any redemption of the Notes if a default in the payment of interest, or premium, if any, on the Notes has occurred and is continuing or if any other Event of Default of which a Responsible Officer of the Trustee has knowledge has occurred and is continuing. If a Change in Control occurs at any time prior to maturity of the Notes, the Notes may be redeemed at the option of the Company, in whole but not in part, not later than sixty (60) days following the effective date of the event or circumstance resulting in the Change in Control, upon mailing a notice of such redemption at least thirty (30) and not more than sixty (60) days prior to the date fixed for redemption to holders of the Notes as provided in the Indenture for cash at the following per-note redemption prices together with accrued and unpaid interest to, but excluding, the date fixed for redemption; provided that if the date fixed for redemption falls after an interest payment record date and on or prior to the corresponding interest payment date, then holders of the Notes at the close of business on that interest payment record date shall be entitled to receive the interest payable on such Notes on the corresponding interest payment date and the amount payable to holders of such Notes on the redemption date will not include any amount in respect of interest payable on such corresponding interest payment date:
DATE OF CHANGE IN CONTROL REDEMPTION PRICE ------------------------- ---------------- Prior to December 31, 2007 $52.50 On or after December 31, 2007 and prior to December 31, 2008 51.25 On or after December 31, 2008 50.00
A-6 If a Change in Control occurs at any time prior to maturity of the Notes, and the Company shall not have exercised its right to redeem all of the Notes, the holder of this Note, at the holder's option, shall have the right, upon delivery of a Change in Control Purchase Notice in accordance with the provisions of the Indenture, to require the Company to purchase this Note (or any portion of the principal amount hereof that is at least $50 and an integral multiple of $50, provided that the portion of the principal amount of this Note to be outstanding after such purchase is at least equal to $50) for cash at a purchase price equal to 100% of the aggregate principal amount thereof, together with accrued and unpaid interest to (but excluding) the Change in Control Purchase Date, as provided in Section 3.6(a) of the Indenture; provided that if the Change in Control Purchase Date falls after an interest payment record date and on or prior to the corresponding interest payment date, then holders of the Notes at the close of business on that interest payment record date shall be entitled to receive the interest payable on such Notes on the corresponding interest payment date and the amount payable to holders of such Notes on the Change in Control Purchase Date will not include any amount in respect of interest payable on such corresponding interest payment date. Any holder of this Note delivering to the Trustee the Change in Control Purchase Notice shall have the right to withdraw such Change in Control Purchase Notice in whole, or as to a portion hereof that is an integral multiple of $50, at any time prior to the close of business on the Business Day immediately before the Change in Control Purchase Date (unless the Company shall default in the payment of the purchase price, together with accrued and unpaid interest to (but excluding) the Change in Control Purchase Date, in which case, such withdrawal shall be permitted until the Company pays the purchase price, together with accrued and unpaid interest to (but excluding) the date of such payment) by delivery of a written notice of withdrawal to the Trustee in accordance with the provisions of the Indenture. Subject to the provisions of the Indenture, the holder hereof has, at its option, the right, at any time or on or prior to the close of business on the Maturity Date (or as to all or any portion hereof called for redemption, prior to the close of business on the Business Day immediately preceding the date fixed for redemption (unless the Company shall default in payment of the amount due upon redemption in which case such right shall terminate upon payment of the amount due upon such redemption)), to convert the principal hereof or any portion of such principal which is $50 or an integral multiple thereof, into that number of fully paid and non-assessable shares of the Company's Common Stock, as said shares shall be constituted at the date of conversion, obtained by dividing the principal amount of this Note or portion thereof to be converted by the initial conversion price of $20 per share, as adjusted from time to time pursuant to Article XV of the Indenture, upon surrender of this Note, together with a conversion notice as provided in the Indenture and this Note, to the Company at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, New York, or at the option of such holder, the Corporate Trust Office, and, unless the shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or by his, her or its duly authorized attorney. If a Change in Control Purchase Notice has been given by the holder of this Note, this Note may not be converted into shares of Common Stock on or after the date of the delivery of such Change in Control Purchase Notice unless such Change in Control Purchase Notice has first been validly withdrawn as specified in Section 3.6 of the Indenture. No adjustment in respect of interest accrued on any Note or on account of any A-7 dividends on any shares of Common Stock will be made upon any conversion; provided, however, that if this Note shall be surrendered for conversion during the period between the close of business on a record date for the payment of interest and prior to the close of business on the Business Day immediately preceding the corresponding interest payment date, this Note (unless it or the portion being converted shall have been called for redemption and a notice of redemption has been mailed to the holders of the Notes pursuant to Section 3.3 of the Indenture) must be accompanied by an amount, in funds acceptable to the Company, equal to the interest otherwise payable on such interest payment date on the principal amount being converted. No fractional shares of Common Stock will be issued upon any conversion, but an adjustment in cash will be paid to the holder, as provided in the Indenture, in respect of any fractional share which would otherwise be issuable upon the surrender of any Note or Notes for conversion. Upon due presentment for registration of transfer of this Note at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, which shall initially be an Affiliate of the Trustee, or at the option of the holder of this Note, at the Corporate Trust Office, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange thereof, subject to the limitations provided in the Indenture, without charge, and bearing any restrictive legends required by the Indenture. The Company, the Trustee, any paying agent, any conversion agent and any Note registrar may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the purpose of receiving payment hereof, or on account hereof, for the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any other conversion agent nor any Note registrar shall be affected by any notice to the contrary. All payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, satisfy and discharge liability for monies payable on this Note. No recourse for the payment of the principal of or any premium or interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. Terms used in this Note and defined in the Indenture are used herein as therein defined. A-8 ABBREVIATIONS The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act (Cust) (Minor) JT TEN - as joint tenants with right of survivorship and not as tenants in common (State) Additional abbreviations may also be used though not in the above list. A-9 [FORM OF CONVERSION NOTICE] CONVERSION NOTICE To ________________ The undersigned registered owner of this Note hereby irrevocably exercises the option to convert this Note, or the portion hereof (which is $50 principal amount or an integral multiple thereof) below designated, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and directs that the shares issuable and deliverable upon such conversion and any check in payment for fractional shares and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If shares or any portion of this Note not converted are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid to the undersigned on account of interest accompanies this Note. Dated: ________________ ____________________________________ ____________________________________ Signature(s) Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17AD-15 if shares of Common Stock are to be issued, or Notes to be delivered, other than to and in the name of the registered holder. Signature Guarantee Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder: ______________________________ (Name) ______________________________ (Street Address) ______________________________ (City, State and Zip Code) Please print name and address A-10 Principal amount to be converted (if less than all): $_________,000 __________________________________________________ Social Security or Other Taxpayer Identification Number A-11 [FORM OF ASSIGNMENT] For value received ________________ hereby sell(s), assign(s) and transfer(s) unto ________________ (Please insert social security number or Taxpayer Identification Number of assignee) the Note, and hereby irrevocably constitutes and appoints ________________ attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises. Unless the appropriate box below is checked, the undersigned confirms that such Note is not being transferred to the Company or an "affiliate" of the Company as defined in Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"). [ ] The transferee is an Affiliate of the Company [ ] The transferee is the Company Dated: ________________ ____________________________________ ____________________________________ Signature(s) Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17AD-15 if shares of Common Stock are to be issued, or Notes are to be delivered, other than to and in the name of the registered holder. Signature Guarantee NOTICE: The signature on the conversion notice or the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. [FORM OF CHANGE IN CONTROL PURCHASE NOTICE] CHANGE IN CONTROL PURCHASE NOTICE To: _____________________________ The undersigned registered owner of this Note hereby irrevocably acknowledges receipt of a notice from International Shipholding Corporation, a Delaware corporation (the "COMPANY"), as to the occurrence of a Change in Control with respect to the Company and A-12 requests and instructs the Company to purchase this Note, or the portion hereof (which is $50 principal amount or an integral multiple thereof) below designated, in accordance with the terms of the Indenture referred to in this Note, at a purchase price per share equal to one hundred percent (100%) of the principal amount, or portion designated below, of this Note, together with accrued and unpaid interest, if any, to, but excluding, the Change in Control Purchase Date. The certificate number(s) of such Note(s) is/are ____________ (include if the Notes are certificated). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Indenture. Dated: ________________ ____________________________________ ____________________________________ Signature(s) NOTICE: The above signatures of the holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. Aggregate principal amount to be purchased (if less than all): $_____________________________________ ______________________________________ Social Security or Other Taxpayer Identification Number A-13 EX-99.1 5 h21520exv99w1.txt PRESS RELEASE DATED JANUARY 6, 2005 EXHIBIT 99.1 FOR IMMEDIATE RELEASE January 6, 2005 INTERNATIONAL SHIPHOLDING CORPORATION COMPLETES PUBLIC OFFERING OF $40.0 MILLION OF 6% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK New Orleans, Louisiana - January 6, 2005 - International Shipholding Corporation (NYSE: ISH) announced today the completion of its public offering of $40.0 million of its 6% Convertible Exchangeable Preferred Stock. The preferred stock, which has a liquidation preference of $50 per share, will accrue cumulative quarterly cash dividends from the date of issuance at a rate of 6% per annum. The preferred stock is initially convertible into two million shares of ISH common stock, equivalent to an initial conversion price of $20.00 per share of ISH common stock and reflecting a 34% conversion premium to the $14.90 per share closing price of ISH's common stock on the New York Stock Exchange on December 29, 2004. The underwriter for the offering was Ferris, Baker Watts, Incorporated, which has an option, exercisable at any time on or before January 28, 2005, to purchase up to an additional $4.0 million of the preferred stock to cover over-allotments, if any. All shares of the preferred stock, which is a new series of ISH's capital stock, were sold by ISH. The preferred stock will be listed on the NYSE under the symbol "ISH Pr." ISH expects that trading in the preferred stock will commence no later than February 7, 2005. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and has become effective. This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. * * * Contacts: Erik F. Johnsen, Chairman (504) 529-5461 Niels M. Johnsen, President (212) 943-4141 -----END PRIVACY-ENHANCED MESSAGE-----