1
EXHIBIT-4.3
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AMERICAN RETIREMENT CORPORATION
$100,000,000
___% Convertible Subordinated Debentures Due 2002
INDENTURE
Dated as of _________, 1997
IBJ XXXXXXXX BANK & TRUST COMPANY,
AS TRUSTEE
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE....................................................1
SECTION 1.1. Definitions.........................................................................1
SECTION 1.2. Other Definitions...................................................................4
SECTION 1.3. Incorporation by Reference to Trust Indenture Act...................................5
SECTION 1.4. Rules of Construction...............................................................5
ARTICLE II. THE SECURITIES................................................................................6
SECTION 2.1. Form; Dating; Incorporation of Form in Indenture....................................6
SECTION 2.2. Execution and Authentication........................................................6
SECTION 2.3. Registrar and Agents................................................................7
SECTION 2.4. Paying Agent to Hold Money in Trust.................................................8
SECTION 2.5. Transfer and Exchange...............................................................8
SECTION 2.6. Replacement Securities..............................................................9
SECTION 2.7. Outstanding Securities.............................................................10
SECTION 2.8. Temporary Securities...............................................................10
SECTION 2.9. Cancellation.......................................................................11
SECTION 2.10. Defaulted Interest.................................................................11
SECTION 2.11. Securityholder Lists...............................................................11
SECTION 2.12. Persons Deemed Owners..............................................................11
SECTION 2.13. CUSIP Number.......................................................................12
SECTION 2.14. Book-Entry Provisions for Global Securities........................................12
SECTION 2.15. Certificated Securities............................................................12
ARTICLE III. REDEMPTION...................................................................................12
SECTION 3.1. Notices to Trustee.................................................................12
SECTION 3.2. Selection of Securities to be Redeemed.............................................12
SECTION 3.3. Notice of Redemption by the Company................................................13
SECTION 3.4. Effect of Notice of Redemption.....................................................13
SECTION 3.5. Deposit of Redemption Price........................................................14
SECTION 3.6. Securities Redeemed in Part........................................................14
ARTICLE IV. COVENANTS
SECTION 4.1. Payment of the Securities..........................................................14
SECTION 4.2. Commission Reports.................................................................14
SECTION 4.3. Waiver of Stay, Extension or Usury Laws............................................15
SECTION 4.4. Notice of Default..................................................................15
SECTION 4.5. Compliance Certificates............................................................15
SECTION 4.6. Limitation on Dividends and Other Distributions....................................16
ARTICLE V. SUCCESSOR CORPORATION........................................................................16
SECTION 5.1. When Company May Merge, etc........................................................16
SECTION 5.2. Successor Corporation or Trust Substituted.........................................16
ARTICLE VI. DEFAULTS AND REMEDIES........................................................................17
SECTION 6.1. Events of Default..................................................................17
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SECTION 6.2. Acceleration.......................................................................19
SECTION 6.3. Other Remedies.....................................................................19
SECTION 6.4. Waiver of Defaults and Events of Default...........................................19
SECTION 6.5. Control by Majority................................................................20
SECTION 6.6. Rights of Holders to Receive Payment...............................................20
SECTION 6.7. Collection Suit by Trustee.........................................................20
SECTION 6.8. Trustee May File Proofs of Claim...................................................20
SECTION 6.9. Priorities.........................................................................21
SECTION 6.10. Undertaking for Costs..............................................................21
SECTION 6.11. Limitation on Suits................................................................22
ARTICLE VII. TRUSTEE ...................................................................................22
SECTION 7.1. Duties of Trustee..................................................................22
SECTION 7.2. Rights of Trustee..................................................................23
SECTION 7.3. Individual Rights of Trustee.......................................................24
SECTION 7.4. Trustee's Disclaimer...............................................................24
SECTION 7.5. Notice of Defaults.................................................................25
SECTION 7.6. Reports by Trustee to Holders......................................................25
SECTION 7.7. Compensation and Indemnity.........................................................25
SECTION 7.8. Replacement of Trustee.............................................................26
SECTION 7.9. Successor Trustee by Xxxxxx, etc...................................................27
SECTION 7.10. Eligibility; Disqualification......................................................27
SECTION 7.11. Preferential Collection of Claims Against Company..................................27
ARTICLE VIII. SATISFACTION AND DISCHARGE OF INDENTURE......................................................28
SECTION 8.1. Satisfaction, Discharge and Defeasance of the Securities...........................28
SECTION 8.2. Satisfaction and Discharge of Indenture............................................28
SECTION 8.3. Survival of Certain Obligations....................................................29
SECTION 8.4. Application of Trust Money.........................................................29
SECTION 8.5. Paying Agent to Repay Monies Held..................................................30
SECTION 8.6. Return of Unclaimed Monies.........................................................30
SECTION 8.7. Reinstatement......................................................................30
SECTION 8.8. Indemnity for Government Obligations...............................................30
ARTICLE IX. AMENDMENTS AND WAIVERS.......................................................................31
SECTION 9.1. Amendments and Waivers Without Consent of Holders..................................31
SECTION 9.2. Amendments and Waivers with Consent of Holders.....................................31
SECTION 9.3. Compliance with Trust Indenture Act................................................32
SECTION 9.4. Revocation and Effect of Consents..................................................32
SECTION 9.5. Notation on or Exchange of Securities..............................................33
SECTION 9.6. Trustee to Sign Amendments, etc....................................................33
ARTICLE X. CONVERSION OF SECURITIES.....................................................................33
SECTION 10.1. Right of Conversion; Conversion Price..............................................33
SECTION 10.2. Issuance of Shares on Conversion...................................................34
SECTION 10.3. No Adjustment for Interest or Dividends............................................35
SECTION 10.4. Adjustment of Conversion Price.....................................................35
SECTION 10.5. Notice of Adjustment of Conversion Price...........................................37
SECTION 10.6. Notice of Certain Corporate Action.................................................38
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SECTION 10.7. Taxes on Conversions...............................................................39
SECTION 10.8. Fractional Shares..................................................................39
SECTION 10.9. Cancellation of Converted Securities...............................................39
SECTION 10.10. Provisions in Case of Consolidation, Merger or Sale of Assets......................39
SECTION 10.11. Disclaimer by Trustee of Responsibility for Certain Matters........................40
SECTION 10.12. Covenant to Reserve Shares.........................................................40
ARTICLE XI. SUBORDINATION; SENIORITY.....................................................................41
SECTION 11.1. Securities Subordinated to Senior Indebtedness.....................................41
SECTION 11.2. Company Not to Make Payments with Respect to Securities in
Certain Circumstances..............................................................41
SECTION 11.3. Subrogation of Securities..........................................................43
SECTION 11.4. Authorization by Holders of Securities.............................................44
SECTION 11.5. Notices to Trustee.................................................................45
SECTION 11.6. Trustee's Relation to Senior Indebtedness..........................................45
SECTION 11.7. No Impairment of Subordination.....................................................46
SECTION 11.8. Article XI Not To Prevent Events of Default........................................46
SECTION 11.9. Paying Agents other than the Trustee...............................................46
SECTION 11.10. Securities Senior to Subordinated Indebtedness.....................................46
ARTICLE XII. CHANGE IN CONTROL............................................................................46
SECTION 12.1. Right to Require Repurchase........................................................46
SECTION 12.2. Notice; Method of Exercising Repurchase Right......................................47
SECTION 12.3. Deposit Of Repurchase Price........................................................48
SECTION 12.4. Notes Not Repurchased On Repurchase Date...........................................48
SECTION 12.5. Change In Control Defined..........................................................48
ARTICLE XIII. MISCELLANEOUS................................................................................50
SECTION 13.1. Trust Indenture Act Controls.......................................................50
SECTION 13.2. Notices............................................................................50
SECTION 13.3. Communications by Holders with Other Holders.......................................51
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.................................51
SECTION 13.5. Statements Required in Certificate and Opinion.....................................52
SECTION 13.6. Rules by Trustee and Agents........................................................52
SECTION 13.7. Record Date........................................................................52
SECTION 13.8. Legal Holidays.....................................................................53
SECTION 13.9. Governing Law......................................................................53
SECTION 13.10. No Adverse Interpretation of Other Agreements......................................53
SECTION 13.11. No Recourse Against Others.........................................................53
SECTION 13.12. Successors.........................................................................53
SECTION 13.13. Multiple Counterparts..............................................................53
SECTION 13.14. Table of Contents, Headings, etc...................................................53
SECTION 13.15. Severability.......................................................................54
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EXHIBIT A - FORM OF SECURITY
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CROSS-REFERENCE TABLE
AMERICAN RETIREMENT CORPORATION
Trust Indenture
Act Section Indenture
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310(a)(1) 7.10; 13.1
(a)(2) 13.1
(a)(3) 13.1
(a)(4) 13.1
(a)(5) 13.1
(b) 7.10; 13.1
(c) 13.1
311(a) 7.11; 13.1
(b) 7.11; 13.1
(c) 13.1
312(a) 13.1
(b) 13.1; 13.3
(c) 13.1; 13.3
313(a) 7.6; 13.1
(b) 7.6; 13.1
(c) 7.6; 13.1
(d) 7.6; 13.1
314(a) 4.2; 13.1
(b) 13.1
(c) 13.1
(d) 13.1
(e) 13.1
(f) 13.1
315(a) 7.1; 13.1
(b) 7.1; 13.1
(c) 7.1; 13.1
(d) 7.1; 13.1
(e) 7.1; 13.1
316(a) 7.1; 13.1
(b) 7.1; 13.1
(c) 7.1; 13.1
317(a) 13.1
(b) 13.1
318(a) Not Applicable
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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INDENTURE dated as of __________, 1997 by and between AMERICAN
RETIREMENT CORPORATION, a Tennessee corporation (the "Company"), and IBJ
XXXXXXXX BANK & TRUST COMPANY, a New York banking corporation, as trustee
("Trustee").
RECITALS
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of the Company's __% Convertible
Subordinated Debentures due 2002 (the "Securities").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders (as defined herein)
of the Company's Securities:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Affiliate" means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities
or by agreement or otherwise.
"Agent" means any Registrar, Paying Agent, Conversion Agent,
co-registrar or agent for service of notices and demands.
"Bankruptcy Law" means Title 11 of the U.S. Code or any
similar Federal or State law for the relief of debtors.
"Board of Directors of the Company" means the Board of
Directors of the Company or any committee of the Board of Directors of the
Company.
"Board Resolution" means a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors of the Company and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means any and all shares or other equivalents
(however designated) of capital stock, including all common stock and all
preferred stock, in the case of a corporation, or partnership interests or other
equivalents (however designated) in the case of a partnership or common shares
of beneficial interest or other equivalents (however designated) in the case of
a trust.
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"Closing Price" means with respect to the shares of Capital
Stock of the Company on any day, (i) the reported last sale price regular way
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case, on the New
York Stock Exchange (the "NYSE"), or (ii) if the shares of Capital Stock are not
listed or admitted to trading on the NYSE, the reported last sale price regular
way or, in case no such reported sale takes place on such day, the average of
the reported closing bid and asked prices regular way, in either case, on the
principal national securities exchange on which the shares of Capital Stock are
listed or admitted to trading, or (iii) if the shares of Capital Stock are not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and asked prices as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose.
"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Custodian" means any receiver, trustee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Dollar" or "$" means the lawful money of the United States of
America.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Global Security" or "Global Securities" means any Security
or Securities issued in global form.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Security Register.
"Indebtedness" as applied to any Person, means, without
duplication: (i) all indebtedness for borrowed money whether or not evidenced by
a promissory note, draft or similar instrument; (ii) that portion of obligations
with respect to any lease that is properly classified as a liability on a
balance sheet in accordance with generally accepted accounting principles; (iii)
notes payable and drafts accepted representing extensions of credit; (iv) any
balance owed for all or any part of the deferred purchase price of property or
services, which purchase price is due more than six months from the date of
incurrence of the obligation in respect thereof (except any such balance that
constitutes (a) a trade payable or an accrued liability arising in the ordinary
course of business or (b) a trade draft or note payable issued in the ordinary
course of business in connection with the purchase of goods or services), if and
to the extent such debt would appear as a liability upon a balance sheet of such
Person prepared in accordance with generally accepted accounting principles; (v)
tenant deposits; (vi) any debt of
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others described in the preceding clauses (i) through (v) that such Person has
guaranteed or for which it is otherwise liable; and (vii) any deferral,
amendment, renewal, extension, supplement or refunding of any of the foregoing
indebtedness; provided, however, that, in computing the "Indebtedness" of any
Person, there shall be excluded any particular indebtedness if, upon or prior to
the maturity thereof and at the time of determination of such indebtedness,
there shall have been deposited with a depository in trust money (or evidences
of indebtedness if permitted by the instrument creating such indebtedness) in
the necessary amount to pay, redeem or satisfy such indebtedness as it becomes
due, and the amount so deposited shall not be included in any computation of the
assets of such Person.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Officer" means the Chairman of the Board, Chief Executive
Officer, the President, any Vice President, the Treasurer, the Secretary or the
Controller of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer, Assistant Secretary or
Assistant Controller of the Company. See Sections 13.4 and 13.5.
"Opinion of Counsel" means a written opinion from Bass, Xxxxx
& Xxxx PLC or any other legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company or the
Trustee. See Sections 13.4 and 13.5.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).
"Redemption Date" when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture.
"Regular Record Date" means, with respect to any Interest
Payment Date, the ________ or ___________ (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Security" or "Securities" means the security or securities in
the form of Exhibit A hereto that are issued under this Indenture as amended or
supplemented from time to time.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Securities Custodian" means the Trustee, as custodian with
respect to any Global Security, or any successor entity thereto.
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"Senior Indebtedness" means the principal, premium, if any,
and interest on, and all other amounts payable under or in respect of,
Indebtedness of the Company (other than (i) Indebtedness owed to a Subsidiary,
(ii) Indebtedness of the Company which is expressly pari passu to the Securities
or (iii) Subordinated Indebtedness).
"Subordinated Indebtedness" means the principal, premium, if
any, and interest on any Indebtedness of the Company which by its terms is
expressly subordinated in right of payment to the Securities.
"Subsidiary" means a Person the majority of whose voting stock
is owned by the Company or a subsidiary of the Company. Voting stock is Capital
Stock having voting power under ordinary circumstances to elect directors or
similar positions.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
xx.xx. 77aaa - 77bbbb) as amended by the Trust Indenture Reform Act of 1990 and
as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Trust Officer", when used with respect to the Trustee, means
an officer of the Trustee assigned by the Trustee to administer its corporate
trust matters or any other officer of the Trustee to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"United States" means the United States of America.
SECTION 1.2. Other Definitions.
Term Defined in Section
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"Change in Control" 12.5
"Common Stock" 10.1
"Company Order" 2.2
"Conversion Agent" 2.3
"conversion price" 10.1
"current market price" 10.4
"Depositary" 2.3
"Event of Default" 6.1
"Group" 12.5
"Interest Payment Date" 2.1
"Legal Holiday" 13.8
"Paying Agent" 2.3
"Payment or Distribution" 11.1
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"Registrar" 2.3
"Repurchase Date" 12.1
"Rule 13e-3 Transaction" 10.6
"Security Register" 2.3
"Trading Day" 12.5
"U.S. Government Obligations" 8.1
SECTION 1.3. Incorporation by Reference to Trust Indenture
Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the indenture securities.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rules
have the meanings assigned to them therein.
SECTION 1.4. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with United States
generally accepted accounting principles in effect as of the
time as to which such accounting principles are to be applied;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the
plural include the singular.
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ARTICLE II.
THE SECURITIES
SECTION 2.1. Form; Dating; Incorporation of Form in Indenture.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $100,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Sections
2.3, 2.5, 2.6, 2.8, 3.6, 9.5 or 10.1.
The Securities shall be known and designated as the ___%
Convertible Subordinated Debentures Due 2002 of the Company. Their fixed
maturity shall be ________, 2002, and they shall bear interest at the rate per
annum of ___%, from and including the date of issuance thereof until maturity or
earlier redemption, payable semiannually on _______ and __________ commencing
__________, 1998 (each an "Interest Payment Date"), until the principal thereof
is paid or made available for payment. Subject to Section 2.10, such interest
shall be paid to the Holder in whose name each Security was registered at the
close of business on the Regular Record Date next preceding each Interest
Payment Date.
The Securities shall be redeemable as provided in Article III.
The Securities shall be convertible as provided in Article X.
The Securities shall be subordinated in right of payment to
Senior Indebtedness, to the extent provided in Article XI.
The Securities shall become subject to a Holder's right of
repurchase in the event of a Change in Control as provided in Article XII.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A which is incorporated in and
made part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rules, agreements to which the
Company is subject, or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them.
Each Security shall be dated the date of its authentication.
The terms and provisions contained in the Securities 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 2.2. Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature.
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If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall nevertheless be valid.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. Such signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.9, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $100,000,000 upon the execution of
this Indenture and a written order or orders of the Company signed by two
Officers or by an Officer and an Assistant Treasurer of the Company (a "Company
Order"). The aggregate principal amount of the Securities outstanding at any
time may not exceed that amount.
The Trustee may appoint an authenticating agent to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
The Securities shall be issuable only in registered form
without coupons. The Securities shall be issuable only in denominations of
$1,000 principal amount and any whole multiples thereof.
SECTION 2.3. Registrar and Agents.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities may be presented for payment
("Paying Agent"), an office or agency where Securities may be presented for
conversion ("Conversion Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Registrar shall keep a register of the Securities (the
"Security Register") and of their transfer and exchange. The Company may have
one or more co-registrars, one or more additional Paying Agents and one or more
additional Conversion Agents. The Company or any Subsidiary may act as Paying
Agent and/or Conversion Agent. The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional conversion
agent.
The Company may change any Paying Agent, Registrar, Conversion
Agent or add as a co-Paying Agent, co-Registrar, or co-Conversion Agent an
entity on sixty (60) days' prior written notice to the Trustee specifying the
name and address of any such entity. If the Company
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fails to maintain a Registrar, Paying Agent, Conversion Agent or agent for
service of notices and demands, or fails to give the foregoing notice, the
Trustee shall act as such.
The Company initially appoints the Trustee as Registrar,
Paying Agent, Conversion Agent, Securities Custodian, and agent for service of
notices and demands.
The Company initially appoints The Depository Trust Company
to act as depositary (the "Depositary") with respect to any Global Security.
SECTION 2.4. Paying Agent to Hold Money in Trust.
At least one Business Day prior to each due date of the
principal of, premium if any, and interest on any Securities, the Company shall
deposit with each Paying Agent a sum sufficient to pay such principal, premium,
if any, and interest so becoming due. The Company shall require each Paying
Agent other than the Trustee to agree in writing that it will hold in trust for
the benefit of Holders of Securities or the Trustee all money held by the Paying
Agent for the payment of principal of, premium if any, or interest on the
Securities and to notify the Trustee of any default by the Company (or any other
obligor on the Securities) in making any such payment. If the Company or a
Subsidiary acts as Paying Agent, it shall on or before each due date of the
principal of, premium, if any, or interest on any Securities segregate the money
and hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and the Trustee may at
any time during the continuance of any payment default, upon written request to
a Paying Agent, require such Paying Agent to forthwith pay to the Trustee all
sums so held in trust by such Paying Agent. Upon doing so, the Paying Agent (if
other than the Company or a Subsidiary thereof) shall have no further liability
for the money.
The final installment of principal of and premium, if any, on
each Security shall be payable only upon surrender of such Security at the
office or agency of the Company maintained for such purpose. Payments of
principal and premium, if any, and interest on the Securities shall be made at
the office or agency of the Company maintained for such purpose, or, in the case
of any such payments other than the final payment of principal and premium, if
any, at the Company's option, by check mailed to the Person entitled thereto at
such Person's address last appearing on the Security Register maintained by the
Registrar.
SECTION 2.5. Transfer and Exchange.
(1) When a Security is presented to the Registrar or a
co-registrar with a request to register the transfer thereof, the Registrar or
co-registrar shall register the transfer as requested, and when Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other authorized denominations, the
Registrar shall make the exchange as requested provided that every Security
represented or surrendered for registration of transfer or exchange shall be
duly endorsed and accompanied by a written instrument of transfer satisfactory
to the Company and the Registrar duly executed by the Holder or such Xxxxxx's
attorney-in-fact duly authorized in writing.
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(2) To permit registrations of transfers and exchanges, the
Company shall issue and the Trustee or any authenticating agent shall
authenticate Securities upon a Company Order. No service charge shall be made
for any registration of transfer or exchange of Securities but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, but this provision shall not
apply to any exchange pursuant to Section 2.8, 3.6, 9.5 or 10.2 not involving
any transfer.
(3) The Registrar shall not be required (i) to issue, register
the transfer of or exchange Securities during a period beginning at the opening
of business 15 days before the day of any selection of Securities for redemption
under Section 3.2 and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
(4) Any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Depositary (or its agent), and that ownership of a beneficial interest in
the Global Security shall be required to be reflected in a book entry.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 2.6. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security presents evidence to the satisfaction of the Company
and the Trustee that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a new Security in
replacement of and substitution for such Security if the requirements of the
Trustee and the Company are met. An indemnity bond may be required by the
Company or the Trustee that is sufficient in the judgment of the Company to
protect the Company and is sufficient in the judgment of the Trustee to protect
the Trustee or any Agent from any loss which it may suffer if a Security is
replaced pursuant to this Section 2.6. The Company and the Trustee may charge
for its expense in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its sole
discretion may, instead of issuing a new Security, pay or authorize the payment
or convert or authorize the conversion of such Security.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
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SECTION 2.7. Outstanding Securities.
Securities outstanding at any time are all Securities
theretofore authenticated and delivered under this Indenture except: (a)
Securities theretofore canceled by the Trustee or delivered to the Trustee for
cancellation; and (b) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Issuer; provided, that in determining whether the Securityholders of the
requisite principal amount of outstanding Securities are present at a meeting of
Securityholders for quorum purposes or have voted or taken or concurred in any
action under this Indenture, including the making of any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such determination as to the presence of a quorum or upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Trust Officer of the Trustee actually knows to be so owned
shall be disregarded.
If a Security is replaced pursuant to Section 2.6, it ceases
to be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or a Subsidiary)
holds on a Redemption Date or maturity date money deposited with it by or on
behalf of the Company sufficient to pay the principal of, premium, if any, and
accrued interest on Securities payable on that date, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.
SECTION 2.8. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have non-material variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities upon a Company Order. Until so exchanged, temporary Securities
represent the same rights as definitive Securities. Upon request of the Trustee,
the Company shall provide a certificate to the effect that the temporary
Securities meet the requirements of the second sentence of this Section 2.8.
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SECTION 2.9. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee any Securities surrendered to them for transfer,
exchange, payment or conversion. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or conversion and destroy canceled
Securities and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee in writing prior to such destruction to deliver
canceled Securities to the Company. Subject to Sections 2.6, 3.6 and the second
paragraph of Section 10.2, the Company may not issue Securities to replace
Securities that it has previously paid or delivered to the Trustee for
cancellation or that a Securityholder has converted pursuant to Article X
hereof.
SECTION 2.10. Defaulted Interest.
If the Company defaults in a payment of interest on Securities
when the same becomes due and payable and such default continues for a period of
30 days, it shall pay the defaulted interest to the Persons who are Holders of
the Securities on a subsequent special record date. After the deposit by the
Company with the Trustee of money sufficient to pay such defaulted interest, the
Trustee shall fix the special record date and payment date. Each such special
record date shall be not less than 10 days prior to such payment date. Each such
payment date shall be not more than 60 days after the deposit by the Company of
money to pay the defaulted interest. At least 15 days before the special record
date, the Company shall mail to each Holder of a Security, with a copy to the
Trustee, a notice that states the special record date, the payment date, and the
amount of defaulted interest to be paid.
SECTION 2.11. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders, a copy of which list shall be provided to the
Company upon its written request. If the Trustee is not the Registrar, the
Registrar shall furnish to the Trustee at least seven Business Days prior to
each semiannual interest payment date and at such other times as the Trustee may
reasonably request in writing a list in such form and as of such date as the
Trustee may require of the names and addresses of Securityholders upon which the
Trustee may conclusively rely. The Trustee may destroy any such list upon
receipt of a replacement list. The Paying Agent will solicit from each
Securityholder a certification of social security number or taxpayer
identification number in accordance with its customary practice and as required
by law, unless the Paying Agent is in possession of such certification. Each
Paying Agent is authorized to impose back-up withholding with respect to
payments to be made to Securityholders to the extent required by law.
SECTION 2.12. Persons Deemed Owners.
Prior to registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
such Security is registered as the
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owner of such Security and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
SECTION 2.13. CUSIP Number.
The Company shall use a "CUSIP" number when issuing the
Securities. The Trustee may use the CUSIP number in notices of redemption or
exchange as a convenience to Securityholders; provided that any such notice may
state that no representation is made as to the correctness or accuracy of the
CUSIP number printed in the notice or on the Securities and that reliance may be
placed only on the other identification numbers printed on the Securities, and
any such redemption or exchange shall not be affected by any defect in or
omission of such numbers.
SECTION 2.14. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered
in the name of the Depositary or the nominee of the Depositary and (ii) be
delivered to the Trustee as Securities Custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary, or the Trustee as Securities
Custodian, or under any Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute legal owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Security.
(b) Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in
a Global Security may be transferred in accordance with the applicable rules
and procedures of the Depositary and the provisions of Section 2.5.
(c) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.
SECTION 2.15. Certificated Securities.
If the Depositary is at any time unwilling or unable to
continue as a depositary for the Global Securities and a successor depositary
is not appointed by the Company within 90 days, the Company will issue
certificated Securities in exchange for the Global Securities. In connection
with the execution and delivery of such certificated Securities, the Trustee
shall reflect on its books and records a decrease in the principal amount of
the relevant Global Security equal to the aggregate principal amount of such
certificated Securities and the Company shall execute and the Trustee shall,
upon receipt of a written order of the Company signed by two officers,
authenticate and deliver one or more certificated Securities in an equal
aggregate principal amount.
ARTICLE III.
REDEMPTION
SECTION 3.1. Notices to Trustee.
If the Company wants to redeem the Securities pursuant to the
optional redemption provisions of Paragraph 5 of the Securities, it shall notify
the Trustee of the Redemption Date and the principal amount of Securities to be
redeemed. The notice shall be given to the Trustee in writing at least 60 days
prior to the Redemption Date (unless a shorter notice period shall be
satisfactory to the Trustee in its discretion) and accompanied by an Officers'
Certificate stating that the redemption complies with the provisions of this
Indenture. Redemptions provided for in Paragraph 5 of the Securities shall be
effected as provided in said Paragraph 5 or as otherwise agreed upon by the
Company and the Trustee.
SECTION 3.2. Selection of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed pro rata or by lot or by any
other method that the Trustee considers fair and appropriate under the
circumstances. The Trustee shall promptly notify the Company of the Securities
to be so called for redemption. The Trustee shall make the selection from
Securities outstanding and not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000 principal amount. Securities and portions of
them it selects shall be in principal amounts of $1,000 or multiples thereof.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee's selection
of Securities for redemption by any method authorized by this Section 3.2 shall
be conclusively deemed reasonable.
Upon any redemption of less than all the Securities, the
Company and the Trustee, for the purpose of selecting Securities to be redeemed,
may treat as outstanding any Securities surrendered for conversion during the
period of 15 days next preceding the selection of the Securities and need not
treat as outstanding any Security authenticated and delivered during such
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period in exchange for the unconverted portion of any Security converted in part
during such period.
SECTION 3.3. Notice of Redemption by the Company.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail to each
Holder of Securities to be redeemed, with a copy to the Trustee.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the conversion price (as defined in Article X of
this Indenture);
(4) the name and address and telephone number of the
Paying Agent and the Conversion Agent;
(5) that Securities called for redemption may be
converted at any time before the close of business on the
Redemption Date and, if not converted prior to the close of
business on the Redemption Date, the right of conversion will
be lost;
(6) that Holders who want to convert Securities must
satisfy the requirements of Paragraph 7 thereof;
(7) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price;
(8) that interest on Securities called for redemption
ceases to accrue on and after the Redemption Date; and
(9) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be
redeemed and that, after the Redemption Date, upon surrender
of such Security, a new Security or Securities in principal
amount equal to the unredeemed portion thereof will be issued.
At the Company's written request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense. If a
CUSIP number is listed in such notice or printed on the Security, the notice
shall state that no representation is made as to the correctness or accuracy of
such CUSIP number.
SECTION 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for
redemption become due and payable on the applicable Redemption Date and at the
applicable Redemption Price. Upon
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surrender to the Paying Agent, such Securities shall be paid at the Redemption
Price, plus accrued interest to the Redemption Date.
SECTION 3.5. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
is the Paying Agent, shall segregate and hold in trust or cause such Subsidiary
to segregate and hold in trust) in immediately available funds money sufficient
to pay the Redemption Price of and accrued interest on all Securities to be
redeemed on that date. The Trustee or the Paying Agent shall return to the
Company any money so deposited not required for that purpose.
SECTION 3.6. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder, at the expense of the Company, a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered. There shall be no service charge to the Holder.
ARTICLE IV.
COVENANTS
SECTION 4.1. Payment of the Securities.
The Company shall pay the principal of, premium, if any, and
interest on the Securities on the dates and in the manner provided in the
Securities and this Indenture. An installment of principal, premium, if any, or
interest shall be considered paid on the date it is due if the Trustee or Paying
Agent (if other than the Company or a Subsidiary) holds on that date money
designated for and sufficient to pay the installment. The Company shall pay
interest on overdue principal and premium, if any, at the rate borne by the
Security; it shall pay interest, including post-petition interest in the event
of a proceeding under any Bankruptcy Law, on overdue installments of interest at
the same rate to the extent lawful.
SECTION 4.2. Commission Reports.
The Company shall file with the Trustee, promptly after filing
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. The Company shall also comply with the other provisions of TIA ss.
314(a).
So long as the Securities remain outstanding, the Company
shall cause its annual reports to shareholders (containing audited financial
statements) and any other financial reports
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furnished by it to shareholders to be mailed to the Holders at their addresses
appearing in the Security Register maintained by the Registrar.
SECTION 4.3. Waiver of Stay, Extension or Usury Laws.
The Company expressly waives (to the extent that it may
lawfully do so) any stay or extension law or any usury law or other law that
would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture, and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.4. Notice of Default.
The Company will, so long as any Securities are outstanding,
deliver to the Trustee, within three business days of becoming aware of any
Default or Event of Default in the performance of any covenant, agreement or
condition in this Indenture, an Officers' Certificate specifying such Default
or Event of Default, the period of existence thereof and what action the
Company is taking or proposes to take with respect thereto.
SECTION 4.5. Compliance Certificates.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company (which as of the date hereof is
December 31), a written statement, which complies with Section 314(a)(4) of the
TIA, signed by the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating, as to each signer thereof:
(1) that a review of the activities of the Company
during such year and of performance under this Indenture has
been made under his or her supervision;
(2) that to the best of his or her knowledge, based on
such review, the Company has kept, observed, performed and
fulfilled in all material respects each and every condition
and covenant contained in this Indenture throughout such year,
or, if there has been a default in the fulfillment of any such
condition or covenant, specifying each such default known to
him or her and the nature and status thereof; and
(3) the conversion price (as defined in Article X of
this Indenture) then in effect.
The Company will give the Trustee written notice of a change
in the fiscal year of the Company, within a reasonable time after such change is
effected.
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SECTION 4.6. Limitation on Dividends and Other Distributions.
The Company will not declare or pay any dividends or make any
distribution to holders of its Capital Stock (other than dividends or
distributions payable in Capital Stock of the Company), or purchase, redeem or
otherwise acquire or retire for value any of its Capital Stock or any warrants,
rights or options to purchase or acquire Capital Stock (other than the
Securities or any other convertible indebtedness of the Company that is neither
secured nor subordinated to the Securities) or permit any Subsidiary to
purchase, redeem or otherwise acquire or retire for value any of the Company's
Capital Stock or any such warrants, rights or options if at the time of any of
the aforementioned actions an Event of Default has occurred and is continuing
or would exist immediately after giving effect to such action.
Notwithstanding the foregoing, the provisions of this Section
4.6 will not prevent (i) the payment of any dividend within 60 days after the
date of declaration when the payment would have complied with the foregoing
provisions on the date of declaration; or (ii) the retirement of any shares of
the Company's Capital Stock by exchange for, or out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary) of, other shares of
its Capital Stock.
ARTICLE V.
SUCCESSOR CORPORATION
SECTION 5.1. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or
transfer all or substantially all of its assets to, another Person in any
transaction in which the Company is not the continuing or surviving entity
unless (i) the resulting, surviving or transferee Person (or the parent
corporation of such Person in the case of a triangular merger) is a corporation
which assumes by supplemental indenture, in form satisfactory to the Trustee,
all the obligations of the Company under the Securities and this Indenture; (ii)
such corporation is organized and existing under the laws of the United States,
a State thereof or the District of Columbia although it in turn may be owned by
a foreign entity; (iii) immediately after giving effect to such transaction no
Default or Event of Default shall have happened and be continuing and the
Officers' Certificate referred to in the following clause reflects that such
Officers after due inquiry are not aware of any such Default or Event of Default
that shall have happened and be continuing, and (iv) the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such supplemental
indenture comply with this Indenture, and thereafter all obligations of the
Company shall terminate.
SECTION 5.2. Successor Corporation or Trust Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1,
the successor corporation formed by such consolidation or into which the Company
is merged (or the parent company of such successor or surviving corporation in
the case of a triangular merger in which the Company is a constituent
corporation) or to which such transfer is made shall succeed to, and be
substituted for, and may
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exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation has been named as the Company
herein; the Company shall thereupon be relieved of any further obligation or
liability hereunder or upon the Securities; and the Company as the predecessor
corporation may thereupon or at any time thereafter be dissolved, wound up or
liquidated. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of American Retirement Corporation,
any or all of the Securities 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 any Securities which previously shall have
been signed and delivered by the Officers to the Trustee for authentication, and
any Securities which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture as though all such Securities had been issued at the
date of the execution hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default.
An "Event of Default", wherever used herein, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be occasioned by the provisions of Article XI or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order or any court or any order, rule or regulation of any
administrative or governmental body):
(1) the Company defaults in the payment of interest on
any Security when the same becomes due and payable and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal
of or premium, if any, on any Security when the same becomes
due and payable at maturity, upon redemption or otherwise, and
such default continues for five Business Days;
(3) default in the payment of the Repurchase Price in
respect of any Security on the Repurchase Date;
(4) the Company fails to comply with any of its other
covenants, agreements or conditions in the Securities or this
Indenture and such default continues for the period and after
the notice specified in the last paragraph of this Section
6.1;
(5) there shall be a default under any bond, debenture,
note or other evidence of Indebtedness or under any mortgage,
indenture or other instrument under which there may be issued
or by which there may be secured or evidenced
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any Indebtedness of the Company or any Subsidiary, whether any
such Indebtedness now exists or shall hereafter be created, if
(a) either (i) such event of default results from the failure
to pay any such Indebtedness at maturity or (ii) as a result
of such event of default, the maturity of such Indebtedness
has been accelerated prior to its stated maturity and such
acceleration shall not be rescinded or annulled or the
accelerated amount paid within ten days after notice to the
Company of such acceleration, or such Indebtedness having been
discharged and (b) the principal amount of such Indebtedness,
together with the principal amount of any other such
Indebtedness in default for failure to pay principal or
interest thereon, or the maturity of which has been so
accelerated, aggregates $10,000,000 or more;
(6) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(a) commences a voluntary case or proceeding,
(b) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(c) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(d) makes a general assignment for the benefit of
its creditors; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law:
(a) for relief against the Company in an
involuntary case or proceeding,
(b) appointing a Custodian of the Company or for
all or substantially all of its property, or
(c) ordering the liquidation of the Company,
and the order or decree remains unstayed and in effect for 90
days.
A default under clause (3) is not an Event of Default until
the Trustee notifies the Company, or the Holders of a majority in principal
amount of the Securities then outstanding notify the Company and the Trustee in
writing, of the default and the Company does not cure the default within 60 days
after receipt of such notice. The notice must specify the default, demand that
it be remedied and state that the notice is a "Notice of Default." The Trustee
shall give such notice to the Company only if directed to do so in writing by
the Holders of a majority in
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principal amount of the Securities then outstanding. Such notice by the Trustee
shall not be deemed to be a certification by the Trustee as to whether an Event
of Default has occurred.
SECTION 6.2. Acceleration.
If an Event of Default (other than an Event of Default
specified in Section 6.1(5) or 6.1(6)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of a majority in principal amount of the
Securities then outstanding by notice to the Company and the Trustee, may
declare to be due and payable immediately the principal amount of the Securities
plus accrued interest to the date of acceleration. Upon any such declaration,
such amount shall be due and payable immediately, and upon payment of such
amount all of the Company's obligations with respect to the Securities, other
than obligations under Section 7.7, shall terminate. If an Event of Default
specified in Section 6.1(5) or 6.1(6) occurs, all unpaid principal and accrued
interest on the Securities then outstanding shall become and be immediately due
and payable without any declaration or the act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the outstanding
Securities by written notice to the Trustee may rescind an acceleration and its
consequences if (x) all existing Events of Default, other than the non-payment
of the principal of the Securities, which have become due solely by such
declaration of acceleration, have been cured or waived, (y) to the extent the
payment of such interest is lawful, interest on overdue installments of interest
and overdue principal and premium, if any, which has become due otherwise than
by such declaration of acceleration, has been paid, and (z) the rescission would
not conflict with any judgment or decree of a court of competent jurisdiction.
The Trustee may rely upon such notice of rescission without any independent
investigation as to the satisfaction of conditions (x), (y) and (z).
SECTION 6.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of and premium, if any, or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Defaults and Events of Default.
Subject to Section 9.2, the Holders of a majority in principal
amount of the Securities then outstanding, on behalf of all the Securityholders,
by written notice to the Trustee may waive a Default or Event of Default with
respect to the Securities and its consequences. When a Default or Event of
Default is waived, it is considered to be cured and ceases to exist;
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but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
SECTION 6.5. Control by Majority.
The Holders of a majority in principal amount of the
Securities then outstanding may direct in writing the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on it. The Trustee, however, may refuse to follow
any direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other Securityholders, it
being understood that (subject to Section 7.1) the Trustee shall have no duty to
ascertain whether or not such actions or forbearances are unduly prejudicial to
such Securityholders, or that may involve the Trustee in personal liability or
for which the Trustee does not have indemnification reasonably satisfactory to
the Trustee pursuant to Sections 7.1(5) and 7.2(6); provided that, the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 6.6. Rights of Holders to Receive Payment.
Subject to Article XI, notwithstanding any other provision of
this Indenture, the right of any Securityholder to receive payment of principal
of, premium, if any, and interest on the Security, on or after the respective
due dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Notwithstanding any other provision of this Indenture, the
right of any Holder of any Security to convert such Security or to bring suit
for the enforcement of such right shall not be impaired or affected without the
written consent of the Holder.
SECTION 6.7. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal,
and premium, if any, specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company or any other obligor on the Securities for
the whole amount of unpaid principal, and premium, if any, and accrued interest
remaining unpaid on the Securities, together with interest on overdue principal,
and premium, if any, and to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate borne by
the Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.8. Trustee May File Proofs of Claim.
The Trustee may 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of Securities allowed in any judicial proceedings relative to the
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Company (or any other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any monies
or other property payable or deliverable on any such claims and to distribute
the same. Any Custodian in any such judicial proceeding is hereby authorized by
each Securityholder to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the Holders
of Securities, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceedings.
SECTION 6.9. Priorities.
If the Trustee collects any money pursuant to this Article VI,
it shall pay out the money in the following order:
FIRST: to the Trustee amounts due under Section 7.7;
SECOND: to holders of any Senior Indebtedness as required by
Article XI;
THIRD: to the Holders of the Securities for amounts due and
unpaid on the Securities for principal, premium, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for
principal, premium, if any, and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders of Securities pursuant to this Section 6.9.
SECTION 6.10. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorney's fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.10 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.6 or a suit by Holders of more than 10% in
principal amount of the Securities then outstanding or a suit by any holder of
Senior Indebtedness.
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SECTION 6.11. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal
amount of the Securities at the time outstanding make a
written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss, liability
or expense satisfactory to the Trustee;
(4) the Trustee does not comply with the request within
60 days after receipt of notice, the request and the offer of
security or indemnity; and
(5) the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding do not give
the Trustee a direction inconsistent with the request during
such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.
ARTICLE VII.
TRUSTEE
SECTION 7.1. Duties of Trustee.
(1) The duties and responsibilities of the Trustee shall be as
provided by the TIA. If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) The Trustee need perform only those duties that are
specifically set forth in this Indenture, and the Trustee
shall not be liable except for the performance of such duties
as are specifically set forth in this Indenture, and no
others, and no implied covenants or obligation shall be read
into this Indenture against the Trustee.
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(b) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture. The Trustee, however, shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) This paragraph does not limit the effect of
paragraph (2) of this Section 7.1.
(b) The Trustee shall not be liable for any error in
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(c) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.5.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(4) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (1), (2) and (3) of this Section 7.1 and
subject to Sections 315 and 316 of the TIA.
(5) Subject to subsection (3), the Trustee may refuse to
perform any duty or exercise any right or power unless, subject to the
provisions of the TIA, it receives indemnity satisfactory to it against any
loss, liability, expense or fee.
(6) The Trustee shall not be liable for interest on any money
received by it. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 7.2. Rights of Trustee.
(1) The Trustee may rely on and shall be protected in acting
or refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
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(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both, which shall
conform to Section 13.5. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel.
(3) The Trustee may act through agents or attorneys and shall
not be responsible for the misconduct or negligence of such agents or attorneys
appointed with due care and shall not be responsible for their supervision.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(5) The Trustee may consult with counsel of its choice and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by the Trustee hereunder in good faith and reliance thereon.
(6) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
(7) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an officer of the Company.
SECTION 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, is subject to
Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee and it shall not be responsible for any statement of the
Company in the Indenture or any statement in the Securities other than its
certificate of authentication or in any document used in the sale of the
Securities other than any statement in writing provided by the Trustee expressly
for use in such document.
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SECTION 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is actually known to the Trustee, the Trustee shall mail to each Holder of
Securities notice of the Default or Event of Default within 90 days after it
becomes known to the Trustee. Except in the case of a default in payment of
principal of, premium, if any, or interest on any Security, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Holders of
Securities. Notwithstanding anything to the contrary expressed in this
Indenture, the Trustee shall not be deemed to have knowledge of any Event of
Default hereunder unless and until a Trust Officer shall have actual knowledge
thereof, or shall have received written notice thereof from the Company at its
principal Corporate Trust Office as specified in Section 13.2. The Trustee shall
not be deemed to have actual knowledge of an Event of Default hereunder, except
in the case of an Event of Default under Sections 6.1(1) or 6.1(2) (provided
that the Trustee is the Paying Agent), until a Trust Officer receives written
notice thereof from the Company or any Securityholder that such a Default or an
Event of Default has occurred.
SECTION 7.6. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with May 15 of the
first year in which Securities are outstanding hereunder, the Trustee, if
required by the provisions of TIA ss. 313(a), shall mail to each Securityholder
a brief report dated as of May 15 of such year that complies with TIA ss.
313(a). The Trustee also shall comply with TIA ss. 313(b), ss. 313(c) and ss.
313(d).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the Securities and Exchange Commission and
each securities exchange, if any, on which the Securities are listed. The
Company agrees to notify the Trustee in writing whenever the Securities become
listed or delisted on or from any securities exchange.
SECTION 7.7. Compensation and Indemnity
The Company shall pay to the Trustee from time to time, and
the Trustee shall be entitled to, reasonable compensation for its services
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust). The Company shall reimburse
the Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses may include, but shall not be limited to,
the reasonable compensation, disbursements and expenses of the Trustee's agents,
consultants and counsel.
The Company shall indemnify the Trustee and its officers,
directors, shareholders, agents and employees for, and hold them harmless
against, any loss or liability incurred by any of them in connection with the
acceptance or administration of the Trustee's duties and the exercise of its
rights and powers under this Indenture or any Security, including (whether
asserted by any Securityholder, the Company or any other Person) the costs and
expenses of defending themselves against any claim or liability in connection
with the Securities or the exercise or performance of any of
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the Trustee's rights, powers or duties hereunder. The Trustee and its officers,
directors, shareholders, agents and employees in their capacity as Paying
Agent, Registrar, Conversion Agent, Securities Custodian and agent for service
of notices and demands shall have the full benefit of the foregoing indemnity
as well as all other benefits, rights, and privileges accorded to the Trustee
in this Indenture when acting in such other capacity. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it
may seek indemnity; provided, however, that any failure to so notify the
Company shall not relieve the Company of its indemnity obligations hereunder
except to the extent the Company's ability to defend such claim shall be
prejudiced thereby. The Company may elect by written notice to the Trustee to
assume the defense of any such claim at the Company's expense with counsel
reasonably satisfactory to the Trustee; provided, however, that if the Trustee
is advised by counsel that the interests of the Company and the Trustee
conflict, the Trustee shall have the right to retain separate counsel at the
expense of the Company.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it through the Trustee's
negligence or willful misconduct. The Company shall not be liable for any
settlement of any claim or action effected without the Company's consent, which
consent shall not be unreasonably withheld.
To secure the Company's payment obligations to the Trustee
pursuant to this Article VII and all other obligations of the Company to the
Trustee pursuant to this Indenture, including all fees, expenses, and rights to
indemnification, the Trustee shall have a first priority lien on all money or
property held or collected by the Trustee. Such lien shall survive the
satisfaction and discharge of the Indenture and the resignation or removal of
the Trustee. The Trustee's right to receive payment of any amounts due under
this Indenture shall not be subordinate to any other indebtedness of the
Company and the Securities shall be subordinate to the Trustee's rights to
receive such payments.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1 occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any applicable bankruptcy or comparable law. The provisions
of this Section shall survive termination of this Indenture.
SECTION 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.8.
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the Securities then outstanding may
remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee with the Company's written consent. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
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(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 45 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the Securities then
outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall, upon payment of its fees and expenses, transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. Notwithstanding the
replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee with respect to expenses and liabilities incurred by it and compensation
earned by it prior to such replacement or otherwise or the Indenture. A
successor Trustee shall mail notice of its succession to each Holder of
Securities.
SECTION 7.9. Successor Trustee by Xxxxxx, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss. 310(b), including the
optional provision permitted by the second sentence of TIA ss. 310(b)(9).
SECTION 7.11. Preferential Collection of Claims Against
Company.
The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE VIII.
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1. Satisfaction, Discharge and Defeasance of the
Securities.
The Company shall be deemed to have paid and discharged the
entire indebtedness on the Securities after the date of the deposit referred to
in paragraph (1) below, the provisions of this Indenture shall no longer be in
effect in respect of the Securities, and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of such indebtedness; provided that the following conditions shall
have been satisfied:
(1) the Company has deposited or caused to be deposited
with the Trustee irrevocably as trust funds in trust,
specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of the Securities, with reference
to this Section 8.1, (a) money or (b) U.S. Government
Obligations or (c) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the entire
indebtedness on all the Securities for principal, premium, if
any, and interest, if any, to the maturity date of the
Securities as such principal, premium, if any, or interest
becomes due and payable in accordance with the terms of this
Indenture and the Securities;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company in connection with all
of the Securities, including all fees and expenses of the
Trustee; and
(3) the Company has delivered to the Trustee an Opinion
of Counsel and an Officers' Certificate, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of the entire Indebtedness on the
Securities and the discharge of this Indenture and the
termination of the Company's obligations hereunder have been
complied with.
"U.S. Government Obligations" means direct, non-callable
obligations of, or non-callable obligations guaranteed by, the United
States of America for the timely payment of which obligation or guarantee the
full faith and credit of the United States of America is pledged.
SECTION 8.2. Satisfaction and Discharge of Indenture.
In addition to its rights under Section 8.1, the Company may
terminate all of its obligations under this Indenture when:
(1) all of the Securities theretofore authenticated
and delivered (other than (a) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.6 hereof and (b) Securities for whose
payment money has theretofore been deposited with the Trustee
or the Paying
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Agent in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such
trust, as provided in Section 2.4 and Section 8.6 hereof) have
been delivered to the Trustee for cancellation (including any
cancellation resulting from the conversion of such Securities
pursuant to Paragraph 7 of the Securities); and
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company in connection with
the outstanding Securities, including all fees and expenses of
the Trustee.
SECTION 8.3. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this
Indenture pursuant to Section 8.1, the respective obligations of the Company
specified in Sections 2.3, 2.4, 2.5, 2.6, 2.11, 4.1, 7.7, 8.5, 8.6, 8.7 and in
Article X shall survive until the Securities are no longer outstanding, and
after the Securities are no longer outstanding, or upon compliance with Section
8.2, only the obligations of the Company in such Sections 7.7 and 8.6 shall
survive. Nothing contained in this Article VIII shall abrogate any of the
obligations or duties of the Trustee under this Indenture.
SECTION 8.4. Application of Trust Money.
(1) Subject to the provisions of Section 8.6, all money and
U.S. Government Obligations deposited with the Trustee for the Securities
pursuant to Section 8.1 or Section 8.2, and all money received by the Trustee in
respect of U.S. Government Obligations deposited with the Trustee for the
Securities pursuant to Section 8.1 or Section 8.2 shall be held in trust and
reinvested by the Trustee in (a) U.S. Government Obligations or (b) beneficial
interests in one or more mutual funds which invest solely in U.S. Government
Obligations and which are rated in the highest applicable rating category by a
nationally-recognized statistical rating organization in accordance with the
Company's written instructions and applied by the Trustee in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company or any Subsidiary acting as
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal, premium, if any, and interest, if any, on the Securities; but
such money need not be segregated from other funds except to the extent required
by law. Money and U.S. Government Obligations so held in trust are not subject
to the subordination provisions of Article XI.
(2) The Trustee shall deliver or pay to the Company from time
to time upon the Company's written request any U.S. Government Obligations or
money held by it as provided in Section 8.1 or Section 8.2 which, in the written
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are then
in excess of the amount thereof which then would have been required to be
deposited for the purpose for which such U.S. Government Obligations, or money,
were deposited or received.
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SECTION 8.5. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture, all
monies then held by any Paying Agent under the provisions of this Indenture
shall, upon written 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 8.6. Return of Unclaimed Monies.
Any monies deposited with or paid to the Trustee or any Paying
Agent for the Securities, or then held by the Company in trust, for the payment
of any principal, premium, if any, and interest, if any, on the Securities and
not applied but remaining unclaimed by the Holders of the Securities for two
years after the date upon which the principal of, premium, if any, and interest,
if any, on the Securities, as the case may be, shall have become due and
payable, shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by such
Trustee or any Paying Agent on written demand by the Company or (if then held by
the Company or any Affiliate) shall be discharged from such trust; and the
Holders of the Securities entitled to receive such payment shall thereafter look
only to the Company for the payment thereof; provided, however, that, before
being required to make any such repayment, the Trustee may, or shall at the
written request of the Company, at the expense of the Company, cause to be
published once in an authorized newspaper in the same city in which the place of
payment with respect to the Securities shall be located and in an authorized
newspaper in the City of New York, or mail to each such Holder, a notice (in
such form as may be deemed appropriate by the Trustee) that said monies remain
unclaimed and that, after a date named therein, any unclaimed balance of said
monies then remaining will be returned to the Company.
SECTION 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.1 until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with Section 8.4;
provided, however, that if the Company has made any payment of principal of,
premium, if any, or interest on the Securities because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
SECTION 8.8. Indemnity for Government Obligations.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations deposited with the Trustee pursuant hereto or the principal and
interest received on such U.S. Government Obligations.
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ARTICLE IX.
AMENDMENTS AND WAIVERS
SECTION 9.1. Amendments and Waivers Without Consent of
Holders.
The Company, when authorized by Board Resolution, and the
Trustee at any time and from time to time, may amend or supplement this
Indenture or the Securities (any such amendment or supplement to be in a form
satisfactory to the Trustee) without notice to or consent of any Securityholder
for any of the following purposes:
(1) to comply with Section 5.1; or
(2) to provide for uncertificated Securities in
addition to or in place of certificated Securities; or
(3) to cure any ambiguity, defect or inconsistency,
or to make any other change that does not adversely affect the
interests of the Holders of Securities in any material
respect; or
(4) to add to the covenants of the Company, for the
benefit of the Holders or to surrender any right or power
herein conferred upon the Company; or
(5) to add any Event of Default.
The Trustee shall be entitled to receive upon request an
Opinion of Counsel to its satisfaction with respect to any supplement to this
Indenture without consent of the Holders that all conditions precedent have been
satisfied.
SECTION 9.2. Amendments and Waivers with Consent of Holders.
With the written consent of the Holders of not less than
66-2/3% in aggregate principal amount of the Securities at the time outstanding,
the Company, when authorized by Board Resolution, and the Trustee may amend or
supplement this Indenture (any such amendment or supplement to be in a form
satisfactory to the Trustee) or the Securities for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities. The Holders of a majority in
principal amount of the Securities then outstanding may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder. Subject to Section 9.4, without
the consent of each Holder of Securities affected, however, an amendment,
supplement or waiver, including a waiver pursuant to Section 6.4, may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment or waiver;
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(2) reduce the rate of or extend the time for payment
of interest on any Security;
(3) reduce the principal of or extend the fixed
maturity of any Security;
(4) waive (except unless theretofore cured) a default
in the payment of the principal of (and premium, if any on),
interest on or redemption amounts with respect to any
Security;
(5) make any Security payable in currency other than
that stated in the Security;
(6) make any change in Sections 6.4, 6.6 or 9.2;
(7) make any change that adversely affects the right
to convert any Security; or
(8) make any change in Article XI that adversely
affects the rights of any Securityholder.
To secure a consent of the Holders under this Section, it
shall not be necessary for the Holders to approve the particular form of any
proposed amendment or waiver; rather, it shall be sufficient if such consent
approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment.
SECTION 9.3. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
Subject to this Indenture, each amendment, supplement or
waiver evidencing other action shall become effective in accordance with its
terms. Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Security is a continuing consent by the Holder even if
notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to his Security or portion
of a Security, if the Trustee receives the notice of revocation before the date
the amendment, waiver or other action becomes effective.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only
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those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consent from
Holders of the principal amount of Securities then outstanding required
hereunder for such amendment, supplement or waiver to be effective shall have
also been given and not revoked within such 90-day period.
After an amendment, waiver or other action becomes effective,
pursuant to Section 9.1 or Section 9.2, as the case may be, it shall bind every
Holder of a Security.
SECTION 9.5. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may request the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determine, the Company in exchange for the Security shall issue
and upon Company Order the Trustee shall authenticate a new Security that
reflects the changed terms, the cost and expense of which will be borne by the
Company. Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, etc.
The Trustee need not sign any amendment that adversely affects
its rights or interests, as determined by the Trustee in its sole discretion. In
signing or refusing to sign any amendment the Trustee shall be entitled to
receive and shall be fully protected in relying upon, an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture. The
Company may not sign an amendment until its Board of Directors approves it.
ARTICLE X.
CONVERSION OF SECURITIES
SECTION 10.1. Right of Conversion; Conversion Price.
Subject to the provisions of Section 7 of the Securities, the
Holder of any Security or Securities shall have the right, at such Holder's
option, at any time on or after December 31, 1997 until the close of business on
________, 2002 (except that, with respect to any Security or portion of a
Security which shall be called for redemption, such right shall terminate at the
close of business on the Redemption Date fixed for redemption of such Security
or portion of a Security unless the Company shall default in payment due upon
redemption thereof), to convert, subject to the terms and provisions of this
Article X, the principal of any such Security or Securities or any portion
thereof which is $1,000 principal amount or an integral multiple thereof into
shares of common stock of the Company, $0.01 par value per share ("Common
Stock"), initially at the conversion price per share of $____or, in case an
adjustment of such price has taken place pursuant to the provisions of Section
10.4, then at the price as last adjusted (such
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price or adjusted price being referred to herein as the "conversion price"),
upon surrender of the Security or Securities, the principal of which is so to be
converted, accompanied by written notice of conversion duly executed, to the
Conversion Agent, at any time during usual business hours at the office or
agency maintained by it for such purpose, and, if so required by the Conversion
Agent or Registrar, accompanied by a written instrument or instruments of
transfer in form satisfactory to the Conversion Agent or Registrar duly executed
by the Holder or his duly authorized representative in writing. For convenience,
the conversion of any portion of the principal of any Security or Securities
into shares of Common Stock is hereinafter sometimes referred to as the
conversion of such Security or Securities.
SECTION 10.2. Issuance of Shares on Conversion.
As promptly as practicable after the surrender, as herein
provided, of any Security or Securities for conversion, the Conversion Agent
shall notify the Company in writing of the surrender and the Company shall
deliver or cause to be delivered at the office or agency of the Conversion
Agent, certificates representing the number of fully paid and nonassessable
shares of Common Stock into which such Security or Securities may be converted
in accordance with the provisions of this Article X to, or upon the written
order of, the Holder of the Security or Securities so surrendered. Such
conversion shall be deemed to have been made as of the close of business on the
date that such Security or Securities shall have been surrendered for conversion
by delivery thereof with a written notice of conversion duly executed, so that
the rights of the Holder of such Security or Securities as a Securityholder
shall cease at such time and, subject to the following provisions of this
paragraph, the Person or Persons entitled to receive the shares of Common Stock
upon conversion of such Security or Securities shall be treated for all purposes
as having become the record holder or holders of such shares of Common Stock at
such time and such conversion shall be at the conversion price in effect at such
time; provided, however, that no such surrender on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the Person or Persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; and provided, further, that in
such event such conversion shall be at the conversion price in effect on the
date that such Security or Securities shall have been surrendered for conversion
by delivery thereof, as if the stock transfer books of the Company had not been
closed. The Company shall give or cause to be given to the Trustee written
notice whenever the stock transfer books of the Company shall be closed.
Upon Conversion of any Security which is converted in part
only, the Company shall execute and the Trustee after receipt of written notice
from the Conversion Agent shall authenticate and deliver to or on the order of
the Holder thereof, at the expense of the Company, a new Security or Securities
of authorized denominations in principal amount equal to the unconverted portion
of such Security.
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SECTION 10.3. No Adjustment for Interest or Dividends.
No payment or adjustment in respect of interest on the
Securities or dividends on the shares of Common Stock shall be made upon the
conversion of any Security or Securities; provided, however, that if a Security
or any portion thereof shall be converted subsequent to any Regular Record Date
and on or prior to the next succeeding Interest Payment Date, the interest
falling due on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest (whether or not
punctually paid or duly provided for) shall be paid to the Person in whose name
such Security is registered at the close of business on such Regular Record Date
and such Securities surrendered during this period (i.e., subsequent to any
Regular Record Date and on or prior to the next succeeding Interest Payment
Date) must be accompanied by payment of an amount equal to the interest payable
on such Interest Payment Date.
SECTION 10.4. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Capital Stock of the Company in shares of Common
Stock, the conversion price in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
conversion price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination.
(2) In case the Company shall issue rights or warrants to all
or substantially all holders of its shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
or exchangeable for Common Stock) at a price per share (or having a conversion
or exchange price per share) less than the current market price per share
(determined as provided in paragraph (6) of this Section 10.4) of the shares of
Common Stock on the date fixed for the determination of shareholders entitled to
receive such rights or warrants, the conversion price in effect at the opening
of business on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the subscription price of the total
number of shares of Common Stock so offered for subscription or purchase (or the
aggregate conversion or exchange price of the convertible or exchangeable
securities so offered) would purchase at such current market price and the
denominator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. In the event that all of the
shares of Common Stock subject to such rights or warrants have not been issued
when such rights or warrants expire, then the conversion price shall promptly be
readjusted to the conversion price which would then be in effect had the
adjustment upon the issuance of such rights or warrants been made on the basis
of the actual number of shares of Common Stock issued upon the exercise of such
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rights or warrants. For the purposes of this paragraph (2), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not issue any rights or warrants in respect of shares of Common Stock held
in the treasury of the Company.
(3) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares, the conversion price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares, the conversion price in effect at the opening of business on the day
following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all or substantially all holders of shares of Common Stock
evidences of indebtedness or assets (including securities, but excluding any (a)
rights or warrants referred to in paragraph (2) of this Section 10.4, (b) any
dividend or distribution not prohibited by Section 4.6 hereof and (c) any
dividend or distribution referred to in paragraph (1) of this Section 10.4), the
conversion price shall be adjusted so that the same shall equal the price
determined by multiplying the conversion price in effect immediately prior to
the close of business on the day fixed for the determination of shareholders
entitled to receive such distribution by a fraction of which the numerator shall
be the current market price per share (determined as provided in paragraph (6)
of this Section) of the shares of Common Stock on the date fixed for such
determination less the then fair market value as determined by the Board of
Directors of the Company (whose determination shall be conclusive and described
in a resolution of the Board of Directors of the Company filed with the Trustee)
of the portion of the assets or evidences of indebtedness so distributed
allocable to one share of Common Stock and the denominator shall be such current
market price per share of the shares of Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
distribution.
(5) In case the shares of Common Stock shall be changed into
the same or a different number of shares of any class or classes of stock,
whether by capital reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or a stock dividend described in paragraph
(1) or (3) of this Section 10.4, or a consolidation, merger or sale of assets
described in Section 10.10), then and in each such event the Holders of
Securities shall have the right thereafter to convert such Securities into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders of the
number of shares of Common Stock into which such Securities might have been
converted immediately prior to such reorganization, reclassification or change.
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(6) For the purpose of any computation under paragraphs (2)
and (4) of this Section, the current market price per share of Common Stock on
any date shall be deemed to be the average of the Closing Prices for the 15
consecutive Business Days selected by the Company commencing not more than 30
and not less than 20 Business Days before the date in question.
(7) No adjustment in the conversion price shall be required
(a) pursuant to paragraphs (1) through (5) if Holders of the Securities receive
notice of and are allowed to participate in such transaction, (b) pursuant to
paragraph (2) if the rights or warrants to purchase common stock of the Company
were issued pursuant to a company plan for reinvestment of dividends or interest
or the Company's employee stock purchase plan, or (c) as a result of a change in
the par value of the common stock of the Company.
(8) No adjustment in the conversion price shall be required
unless such adjustment (plus any adjustments not previously made by reason of
this paragraph (8)) would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
paragraph (8) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
paragraph (8) shall be made to the nearest cent.
(9) The Company may, but shall not be required to, make such
reductions in the conversion price, in addition to those required by paragraph
(1), (2), (3), (4) and (5) of this Section 10.4 as the Company's Board of
Directors considers to be advisable in order to avoid or diminish any income tax
to any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax purposes or for any
other reason. The Company's Board of Directors shall have the power to resolve
any ambiguity or correct any error in the adjustments made pursuant to this
Section 10.4 and its actions in so doing shall be final and conclusive.
(10) The adjustments provided for in this Section 10.4 shall
be made successively whenever any event listed above shall occur.
SECTION 10.5. Notice of Adjustment of Conversion Price.
Whenever the conversion price for the Securities is adjusted
as herein provided:
(1) the Company shall compute the adjusted conversion
price in accordance with Section 10.4 and shall prepare an
Officers' Certificate setting forth the adjusted conversion
price and showing in reasonable detail the facts upon which
such adjustment is based and the computation thereof, and such
certificate shall forthwith be filed at each office or agency
maintained for the purpose of conversion of the Securities
pursuant to Section 2.3 and with the Trustee; and
(2) a notice stating that the conversion price has
been adjusted and setting forth the adjusted conversion price
shall as soon as practicable be mailed by the Company to all
Holders of the Securities at their last addresses as they
shall appear in the Security Register.
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(3) If the conversion price is adjusted and the
Company fails to file an Officers' Certificate with the
Trustee as provided by Section 10.5(1) and the Trustee is
acting as the Conversion Agent, the Trustee shall be entitled
to rely conclusively on the conversion price set forth in the
Officer's Certificate most recently received by the Trustee
(or as set forth in the Securities and this Indenture if the
conversion price shall not have been adjusted).
SECTION 10.6. Notice of Certain Corporate Action.
(1) In case:
(a) the Company shall authorize the granting to
holders of its shares of Common Stock of rights or warrants
entitling them to subscribe for or purchase any shares of
Capital Stock of any class or of any other rights; or
(b) of any reclassification of the shares of Common
Stock of the Company, or of any consolidation or merger to
which the Company is a party and for which approval of any
shareholders of the Company is required, or of the sale or
transfer of all or substantially all of the assets of the
Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of the Securities pursuant to Section 2.3 and shall
cause to be mailed to the Trustee and all Holders of the Securities at their
last addresses as they shall appear in the Security Register, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
rights or warrants, or, if a record is not to be taken, the date as of which the
Holders of shares of Common Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of shares of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Such notice shall also state
whether such transaction will result in any adjustment in the conversion price
applicable to the Securities and, if so, shall state what the adjusted
conversion price will be and when it will become effective. Neither the failure
to give the notice required by this Section, nor any defect therein, to any
particular Holder shall affect the sufficiency of the notice or the legality or
validity of any such dividend, distribution, right, warrant, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding-up,
or the vote on any action authorizing such with respect to the other holders.
(2) In case the Company or any Affiliate of the Company shall
propose to engage in a "Rule 13e-3 Transaction" as defined in the Commission's
Rule 13e-3 under the
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Exchange Act, the Company shall, no later than the date on which any information
with respect to such Rule 13e-3 Transaction is first required to be given to the
Commission or any other Person pursuant to such Rule 13e-3, cause to be mailed
to all Holders at their last addresses as they shall appear in the Security
Register, a copy of all information required to be given to the holders of the
Company's Capital Stock pursuant to such Rule 13e-3. The information required to
be given under this paragraph shall be in addition to and not in lieu of any
other information required to be given by the Company pursuant to this Section
10.6 or any other provision of the Securities or this Indenture.
SECTION 10.7. Taxes on Conversions.
The Company will pay any and all stamp or similar taxes that
may be payable in respect of the issuance or delivery of shares of Common Stock
on conversion of the Securities pursuant hereto. The Company shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of shares of Common Stock in a name other
than that of the Holder of the Security or Securities to be converted, and no
such issuance or delivery shall be made unless and until the Person requesting
such issuance has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
SECTION 10.8. Fractional Shares.
No fractional shares or scrip representing fractional shares
shall be issued upon any conversion of the Securities. If any such conversion
would otherwise require the issuance of a fractional share an amount equal to
such fraction multiplied by the current market price per share of Common Stock
(determined as provided in paragraph (6) of Section 10.4) on the day of
conversion shall be paid to the Holder in cash by the Company.
SECTION 10.9. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to
the Trustee and upon Company Order certifying that certificates representing
the number of fully paid and nonassessable shares of Common Stock required to
be delivered by the Company pursuant to Section 10.2 have been delivered, the
Trustee shall cancel and dispose of the same as provided in Section 2.9.
SECTION 10.10. Provisions in Case of Consolidation, Merger
or Sale of Assets.
(1) In case of any consolidation of the Company with, or
merger of the Company into, any Person, or in case of any merger of another
Person into the Company (other than a consolidation or merger which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), or in case of any sale or transfer of all
or substantially all of the assets of the Company, the Person formed by such
consolidation or resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right thereafter, during the period such Security
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shall be convertible as specified in Section 10.1 to convert such Security only
into the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, sale or transfer by a holder of the number of shares
of Common Stock into which such Security might have been converted immediately
prior to such consolidation, merger, sale or transfer. Such supplemental
indenture shall provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article X. The above
provisions of this Section 10.10 shall similarly apply to successive
consolidations, mergers, sales or transfers.
(2) The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any such supplemental
indenture relating either to the kind or amount of shares of stock or securities
or property receivable by Holders upon the conversion of their Securities after
any such reclassification, change, consolidation, merger, sale or conveyance or
to any adjustment to be made with respect thereto.
SECTION 10.11. Disclaimer by Trustee of Responsibility for
Certain Matters.
The Trustee and each Conversion Agent (other than the Company
or any Subsidiary) shall not at any time be under any duty or responsibility to
any Holder of the Securities to determine whether any facts exist which may
require any adjustment of the conversion price, how it should be calculated or
what it should be, or with respect to the nature or extent or accuracy of
computation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and each Conversion Agent (other than the Company
or any Subsidiary) shall not be accountable with respect to the validity, value,
kind or amount of any shares of Common Stock, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Security; and it makes no representation with respect thereto. The Trustee and
each Conversion Agent (other than the Company or any Subsidiary) shall not 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
upon the surrender of any Security for the purpose of conversion or, subject to
Section 7.1, to comply with any of the covenants of the Company contained in
this Article X.
SECTION 10.12. Covenant to Reserve Shares.
The Company covenants that it will at all times reserve and
keep available, free from preemptive rights, out of its authorized shares of
Common Stock, solely for the purpose of issuance upon conversion of the
Securities as herein provided, such number of shares of Common Stock as shall
then be issuable upon the conversion of all outstanding Securities. The Company
covenants that all shares of Common Stock which shall be so issuable shall be,
when issued, duly and validly issued and fully paid and non-assessable. For
purposes of this Section 10.12, the number of shares of Common Stock which shall
be deliverable upon the conversion of all outstanding Securities shall be
computed as if at the time of computation all outstanding Securities were held
by a single holder.
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ARTICLE XI.
SUBORDINATION; SENIORITY
SECTION 11.1. Securities Subordinated to Senior
Indebtedness.
(1) The Company agrees, and each Holder of the Securities by
his acceptance thereof likewise agrees, that the payment of the principal of,
premium, if any, and interest on the Securities (all of the foregoing, a
"Payment or Distribution") is subordinated and junior in right of payment,
except as provided in Section 8.1, to the extent and in the manner provided in
this Article XI, to the prior payment in full in cash of all Senior
Indebtedness whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed.
A Payment or Distribution shall include any asset of any kind
or character, and may consist of cash, securities or other property, by set-off
or otherwise, and shall include, without limitation, any purchase, redemption or
other acquisition of Securities or the making of any deposit of funds or
securities pursuant to this Indenture (including, without limitation, any
deposit pursuant to Article VIII hereof).
(2) The Senior Indebtedness of the Company shall continue to
be Senior Indebtedness and entitled to the benefit of these subordination
provisions irrespective of any amendment, modification or waiver of any term of
any instrument relating to refinancing of the Senior Indebtedness. There shall
be no limit on the amount of Senior Indebtedness that the Company may incur.
(3) All the provisions of this Indenture and the Securities
shall be subject to the provisions of this Article XI so far as they may be
applicable thereto, except that nothing in this Article XI shall apply to claims
for, or payments to, the Trustee under or pursuant to Article VII of this
Indenture.
(4) No right of any holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
affected or impaired by any failure to act on the part of the Company, any
Paying Agent, the Holders of the Securities, the Trustee or the holders of the
Senior Indebtedness, or by any noncompliance by the Company, any Paying Agent,
the Holders of the Securities or the Trustee with any of the terms, provisions
and covenants of the Securities or this Indenture, regardless of any knowledge
thereof that any such holder of Senior Indebtedness may have or be otherwise
charged with.
SECTION 11.2. Company Not to Make Payments with Respect to
Securities in Certain Circumstances.
No Payment or Distribution shall be made by the Company, the
Trustee or any Paying Agent on account of principal of, premium, if any, or
interest on the Securities, whether upon stated maturity, upon redemption or
acceleration, or otherwise, or on account of the purchase or other acquisition
of Securities, whether upon stated maturity, upon redemption or acceleration, or
otherwise, if there shall have occurred and be continuing a default with respect
to
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any Senior Indebtedness permitting the acceleration thereof or with respect to
the payment of any Senior Indebtedness and (a) such default is the subject of a
judicial proceeding or (b) written notice of such default has been given to the
Company by any holder or holders of any Senior Indebtedness, unless and until
such default or event of default shall have been cured or waived or shall have
ceased to exist.
Upon any acceleration of the principal of the Securities or
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 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 payment thereof provided for to the
satisfaction of the holders thereof, before any Payment or Distribution is made
on account of the redemption price or principal of (and premium, if any) or
interest on the Securities; and (subject to the power of a court of competent
jurisdiction to make other equitable provision, which shall have been determined
by such court to give effect to the rights conferred in this Article upon the
Senior Indebtedness and the holders thereof with respect to the Securities or
the Holders thereof or the Trustee, by a lawful plan of reorganization or
readjustment under applicable law) upon any such dissolution or winding up or
liquidation or reorganization, any Payment or Distribution by the Company or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than securities of the Company as reorganized or
readjusted or securities of the Company or any other company, trust or
corporation provided for by a plan of reorganization or readjustment, the
payment of which is junior or otherwise subordinate, at least to the extent
provided in this Article XI with respect to the Securities to the payment of all
Senior Indebtedness at the time outstanding and to the payment of all securities
issued in exchange therefor to the holders of the Senior Indebtedness at the
time outstanding, and the rights of the holders of Senior Indebtedness of the
Company are not altered by such plan of reorganization or readjustment), to
which the Holders of the Securities or the Trustee would be entitled except for
the provisions of this Article XI, shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such Payment or Distribution directly to the holders of Senior
Indebtedness of the Company or their 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, to the extent necessary to pay all Senior Indebtedness in
full in cash, 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 Securities or to the Trustee, except that the Trustee
will have a first priority lien for the payment of its fees, expenses and any
right to indemnity provided for herein.
In the event that, notwithstanding the foregoing, any Payment
or Distribution by the Company of any kind or character, (whether such payment
shall be in cash, property or securities) which is prohibited by the foregoing,
shall have been made to the Trustee or the Holders of the Securities before all
Senior Indebtedness is paid in full in cash, or provision is made for such
payment to the satisfaction of the holders thereof, and if such fact shall then
have been or thereafter be made known to a Trust Officer of the Trustee or, as
the case may be, such
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Holder, then and in such event such Payment or Distribution shall be paid over
by the Trustee (if the Notice required by Section 11.5 has been timely received
by the Trustee) or such Holder or delivered to the holders of Senior
Indebtedness or their 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, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash,
after giving effect to any concurrent Payment or Distribution to or for the
holders of such Senior Indebtedness, and, until so delivered, the same shall be
held in trust by any Holder of a Security as the property of the holders of
Senior Indebtedness..
The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article V shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 11.2 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article V. Nothing in this
Section shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 7.7.
The holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the obligations of the Holders of the Securities
hereunder to the holders of Senior Indebtedness: (i) change the manner, place or
terms of payment or change or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend in any manner Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the collection of Senior Indebtedness; (iv)
apply any amounts received to any liability of the Company owing to holders of
Senior Indebtedness; and/or (v) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 11.3. Subrogation of Securities.
Subject to the payment in full in cash of all amounts then due
(whether by acceleration of the maturity thereof or otherwise) on account of all
Senior Indebtedness at the time outstanding, the Holders of the Securities shall
be subrogated 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, premium, if any,
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no Payments or Distributions to the holders of Senior
Indebtedness to which the Holders of the Securities would be entitled except for
the provisions of this Article XI, and no payments over pursuant to the
provisions of this Article XI to the holders of Senior Indebtedness by Holders
of the Securities, shall, as between the Company, the Company's creditors other
than holders of Senior Indebtedness, and the Holders of the Securities, be
deemed to be a payment by the
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Company to or on account of the Senior Indebtedness. It is understood that the
provisions of this Article XI are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Indebtedness, on the other hand.
Nothing contained in this Article XI or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities 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 Securities and creditors
of the Company other than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article XI of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy. Nothing in this Article
XI shall prevent conversions of Securities pursuant to Article X.
Upon any payment or distribution of assets of the Company
referred to in this Article XI, the Trustee, subject to the provisions of
Section 7.1, and the Holders of the Securities shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which any
dissolution, winding up, liquidation or reorganization proceedings are pending,
or certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of 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 XI.
SECTION 11.4. Authorization by Holders of Securities.
Each holder of a Security by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as it believes is
necessary or appropriate to effectuate, as between the Holder of the Security
and the holders of Senior Indebtedness, the subordination provided in this
Article XI and appoints the Trustee his attorney-in-fact for any and all such
purposes including, without limitation, to execute, verify, deliver and file any
proofs of claim which any holder of Senior Indebtedness may at any time require
in order to prove and realize upon any rights or claims pertaining to the
Securities and to effectuate the full benefit of the subordination contained
herein. If the Trustee shall fail to do so prior to 30 days prior to the
expiration of the period for filing such claims, any such holder of Senior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the Holder to execute, verify, deliver and file any such
proofs of claim; provided that no holder of Senior Indebtedness shall incur any
liability for any failure to exercise its right to file any such proofs of
claim.
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SECTION 11.5. Notices to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to it which would prohibit the making of any payment of moneys to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article XI. Notwithstanding the provisions of this Article XI or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article XI unless and until a Trust Officer of the Trustee
shall have received at its Corporate Trust Office written notice thereof from
the Company or a holder or holders of Senior Indebtedness or from any trustee or
agent therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.1, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if a Trust
Officer of the Trustee shall not have received at least three Business Days
prior to the date upon which by the terms hereof any such moneys may become
payable for any purpose (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Security) with respect to such
moneys the notice provided for in this Section 11.5, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have the full power
and authority to receive such moneys 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 within three Business Days prior to such date or at
any time thereafter.
The Trustee shall be entitled to rely conclusively on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee or agent on behalf of any such holder. 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 XI, 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 XI, 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 11.6. Trustee's Relation to Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XI 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 7.11 or elsewhere in this Indenture
shall deprive the Trustee of any of its rights as such holder.
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 XI, and no implied
covenants or obligations with respect to the holders of Senior
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Indebtedness shall be read into this Indenture against the Trustee. The Trustee
and Paying Agent shall not owe any duty to the holders of Senior Indebtedness
and shall not be liable to any such holder or representative if any sums are
paid over or distributed to Holders of the Securities or the Company or any
other Person money or assets to which any holder of Senior Indebtedness shall be
entitled by virtue of this Article XI or otherwise.
SECTION 11.7. 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, the Trustee or the Holder of any of the Securities or by any act,
or failure to act, in good faith, by any such holder of Senior Indebtedness, or
by any noncompliance by the Company, the Trustee or the Holder of any of the
Securities 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 11.8. Article XI Not To Prevent Events of Default.
The failure to make a payment on account of principal of,
premium, if any, or interest on the Securities by reason of any provision in
this Article XI shall not be construed as preventing the occurrence of an Event
of Default with respect to such Securities under Section 6.1.
SECTION 11.9. Paying Agents other than the Trustee.
In any case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then acting hereunder,
the term "Trustee" as used in this Article XI shall in such case (unless the
context shall otherwise require) 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 XI in addition to or in place of the
Trustee.
SECTION 11.10. Securities Senior to Subordinated
Indebtedness.
The indebtedness represented by the Securities will be senior
and prior in right of payment to all Subordinated Indebtedness, to the extent
and in the manner provided in such Subordinated Indebtedness.
ARTICLE XII.
CHANGE IN CONTROL
SECTION 12.1. Right to Require Repurchase.
In the event that there shall occur a Change in Control (as
defined in Section 12.5), each Holder shall have the right, at such Holder's
option, to require the Company to purchase, and upon the exercise of such right,
the Company shall, subject to the provisions of
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Article XI, purchase, all or any part of such Xxxxxx's Securities on the date
(the "Repurchase Date") that is 75 days after the date the Company gives notice
of the Change in Control as contemplated in Section 12.2(1) at a price (the
"Repurchase Price") equal to 101% of the principal amount thereof, together with
accrued and unpaid interest to the Repurchase Date. In connection with the
exercise of the repurchase right by a Holder prior to a Redemption Date, a
Xxxxxx's right to exercise his repurchase right shall terminate at the close of
business on the Business Day prior to the Redemption Date.
SECTION 12.2. Notice; Method of Exercising Repurchase Right.
(1) On or before the 15th day after the occurrence of a Change
in Control, the Company or, at the written request of the Company, the Trustee
(in the name and at the expense of the Company), shall give notice of the
occurrence of the Change in Control and of the repurchase right set forth herein
arising as a result thereof by first-class mail, postage prepaid, to each Holder
at such Holder's address appearing in the Security Register. The Company shall
also deliver a copy of such notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(a) the event constituting the Change in Control and
the date thereof;
(b) the Repurchase Date;
(c) the date by which the repurchase right must be
exercised;
(d) the Repurchase Price; and
(e) the procedures a Holder must follow to exercise a
repurchase right.
No failure of the Company to give the foregoing notice shall
limit any Holder's right to exercise a repurchase right. The Trustee shall have
no affirmative obligation to determine if there shall have occurred a Change in
Control.
(2) To exercise a repurchase right, a Holder shall deliver to
the Company (or an agent designated by the Company for such purpose in the
notice referred to in (1) above) and to the Trustee on or before the tenth day
prior to the Repurchase Date (a) written notice of the Holder's exercise of such
right, which notice shall set forth the name of the Holder, the principal amount
of the Security or Securities (or portion of a Security) to be repurchased and a
statement that an election to exercise the repurchase right is being made
thereby and (b) the Security or Securities with respect to which the repurchase
right is being exercised, duly endorsed for transfer to the Company. Such
written notice shall be irrevocable. If the Repurchase Date falls between any
Regular Record Date and the next succeeding Interest Payment Date, Securities to
be repurchased must be accompanied by payment from the Holder of an amount equal
to the interest thereon which the registered Holder thereof is to receive on
such Interest Payment Date. A Holder that fails to exercise a repurchase right
in accordance with the terms hereof shall waive
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such repurchase right but the rights of such Holder to receive principal of and
interest on the Securities and all other rights of such Holder under this
Indenture shall not be affected thereby.
(3) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall on the Repurchase Date pay
or cause to be paid in cash to the Holder thereof the Repurchase Price of the
Security or Securities as to which the repurchase right has been exercised. In
the event that a repurchase right is exercised with respect to less than the
entire principal amount of a surrendered Security, the Company shall execute and
deliver to the Trustee and the Trustee shall authenticate for issuance in the
name of the Holder a new Security or new Securities in the aggregate principal
amount of the unrepurchased portion of such surrendered Security.
SECTION 12.3. Deposit Of Repurchase Price .
On or prior to the Repurchase Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 2.4) an amount
of money sufficient to pay the Repurchase Price of the Notes which are to be
repaid on the Repurchase Date.
SECTION 12.4. Securities Not Repurchased On Repurchase Date.
If any Security surrendered for repurchase shall not be so
paid on the Repurchase Date, the principal shall, until paid, bear interest to
the extent permitted by applicable law from the Repurchase Date at the rate per
annum borne by such Security.
SECTION 12.5 "Change In Control" Defined
For purposes of this Article, "Change In Control" means any of
the following events that occur after the date of this Indenture and on or prior
to such date as no Securities remain outstanding:
(1) all or substantially all of the Company's assets are sold
as an entirety to any person or related group of persons;
(2) there shall be consummated any consolidation or merger of
the Company (a) in which the Company is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly-owned subsidiary
of the Company in which all Common Stock outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same consideration)
or (b) pursuant to which the Common Stock are converted into cash, securities
or other property, in each case other than a consolidation or merger of the
Company in which the holders of the Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority of the
common stock of the continuing or surviving corporation immediately after such
consolidation or merger; or
(3) any person, or any persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Securities Exchange
Act of 1934 (a "Group"), together with
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any Affiliates thereof, shall acquire beneficial ownership (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of at least 50% of the total
voting power of all classes of Capital Stock of the Company entitled to vote
generally in the election of directors of the Company.
Notwithstanding anything to the contrary set forth in this
definition, a Change in Control shall not be deemed to have occurred:
(A) under paragraph (3) above, solely by virtue of the
Company, any Subsidiary, any employee share purchase plan, share option plan or
other share incentive plan or program, retirement plan or automatic dividend
reinvestment plan or any substantially similar plan of the Company or any
Subsidiary or any Person holding securities of the Company for or pursuant to
the terms of any such employee benefit plan, filing or becoming obligated to
file a report under or in response to Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report) under the Securities Exchange Act of 1934
disclosing beneficial ownership by it of Capital Stock of the Company, whether
at least 50% of the total voting power referred to in paragraph (3) above, or
otherwise; or
(B) under paragraphs (1), (2) or (3) above if:
(i) the Current Market Price of the Common Stock
on the date the Change in Control shall have occurred is at least equal to 105%
of the conversion price in effect immediately preceding the time of such Change
in Control; or
(ii) all of the consideration (excluding cash
payments for fractional shares) in the transaction giving rise to such Change in
Control to the holders of Common Stock consists of common stock that is, or
immediately upon issuance will be, listed on a national securities exchange or
quoted on the Nasdaq National Market, and as a result of such transaction the
Securities become convertible solely into such common stock; or
(iii) the consideration in the transaction giving
rise to such Change in Control to the holders of Common Stock consists of cash,
securities that are, or immediately upon issuance will be, listed on a national
securities exchange or quoted on the Nasdaq National Market, or a combination of
cash and such securities, and the aggregate fair market value of such
consideration (which, in the case of such securities, shall be equal to the
average of the daily Closing Prices of such securities during the ten
consecutive Trading Days commencing with the sixth Trading Day following
consummation of such transaction) is at least 105% of the conversion price in
effect on the date immediately preceding the closing date of such transaction.
If a Change in Control shall have occurred under paragraph (2)
above, the Company shall deliver the Officers' Certificate and Opinion of
Counsel called for under Section 13.4 as well as the notices called for under
Section 10.5.
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For purposes of this definition of Change of Control, "Current
Market Price" on any date means the average daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more than ten
Trading Days before, and ending not later than, the date in question; and
"Trading Day", with respect to any stock exchange or securities market, means
any Monday, Tuesday, Wednesday, Thursday or Friday on which such stock exchange
or securities market is open for business.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provisions shall control. The provisions of
TIA Sections 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
SECTION 13.2. Notices.
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, or first class mail, postage prepaid (except that any notice by the
Trustee to the Company of a default or an Event of Default under this Indenture
shall be by registered or certified mail, postage prepaid, return receipt
requested), or by a nationally-recognized overnight express courier service
(which notices or communications shall be deemed received, in the case of the
Company, the business day after the receipt thereof by such service and, in the
case of the Trustee, upon receipt), addressed as follows:
if to the Company:
American Retirement Corporation
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
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Telephone: 000-000-0000
Telecopier: 000-000-0000
if to the Trustee:
IBJ Xxxxxxxx Bank & Trust Company
Corporate Trust Office
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
The Company or the Trustee by notice to the other may designate additional or
different addresses as shall be furnished in writing by either party. Any notice
or communication to the Company or the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered, and five (5)
calendar days after mailing if sent by registered or certified mail (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall
be mailed to the address of such Securityholder as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice, as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
If the Company mails any notice or communication to
Securityholders, it shall mail a copy to the Trustee and all Agents at the same
time.
SECTION 13.3. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, or upon the request of the Trustee with
respect to any matter relating to the
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performance of its rights, duties or obligations hereunder, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 13.5) stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel (which shall include the
statements set forth in Section 13.5) stating that, in the
opinion of such counsel, all such conditions precedent have
been complied with.
SECTION 13.5. Statements Required in Certificate and Opinion.
Each Certificate and Opinion 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 statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of such Person, such covenant or condition has been complied
with.
SECTION 13.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Registrar, Paying Agent or Conversion Agent may
make reasonable rules for its functions.
SECTION 13.7. Record Date.
Whenever the Company or the Trustee solicits an act of
Securityholders, the Company or the Trustee may fix in advance of the
solicitation of such act a date as the record date for determining
Securityholders entitled to perform said act. The record date shall be not more
than 15 days prior to the date fixed for the solicitation of said act.
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SECTION 13.8. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banks or trust companies in the city in which either the Trustee or the Company
is located are not required to be open. If a payment date is a Legal Holiday at
a place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
SECTION 13.9. Governing Law.
The laws of the State of New York shall govern this Indenture
and the Securities without regard to principles of conflicts of law. Each of the
parties hereto agrees to submit to the jurisdiction of the Courts of the State
of New York and the U.S. Federal Courts, in each case sitting in the Borough of
Manhattan, and waives any objection as to venue or forum non conveniens.
SECTION 13.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 13.11. No Recourse Against Others.
No shareholder, director or officer, as such, past, present or
future, of the Company or of any successor corporation or trust shall have any
liability for any obligation of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 13.12. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.13. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 13.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet 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.
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SECTION 13.15. Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
(Signature page follows.)
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
AMERICAN RETIREMENT CORPORATION,
a Tennessee corporation
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY,
----------------------------,
as Trustee
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EXHIBIT A
FORM OF SECURITY
[Attached]
62
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
AMERICAN RETIREMENT CORPORATION
___% Convertible Subordinated Debenture Due 2002
AMERICAN RETIREMENT CORPORATION, a Tennessee corporation,
promises to pay to ________________________________ or registered assigns, the
principal sum of _____________ Dollars, on _______, 2002.
Interest Payment Dates: _________ and ___________
Record Dates: __________ and ___________
Additional provisions of this Security are set forth on other
side of this Security.
Dated:
CERTIFICATE OF AUTHENTICATION AMERICAN RETIREMENT CORPORATION
IBJ XXXXXXXX BANK & TRUST
COMPANY
as Trustee, certifies that this
is one of the Securities referred By:
to in the within mentioned -----------------------------
Indenture.
By: By:
------------------------------ -----------------------------
Authorized Signatory
63
[FORM OF REVERSE OF SECURITY]
AMERICAN RETIREMENT CORPORATION
___% Convertible Subordinated Debenture Due 2002
1. Interest. American Retirement Corporation, a Tennessee
corporation (the "Company"), promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Company will pay interest
semiannually on _________ and _________ of each year beginning __________, 1998.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from ___________, 1997;
provided that, if there is no existing Default in the payment of interest, and
if this Security is authenticated between a record date referred to on the face
hereof and the next succeeding interest payment date, interest shall accrue from
such interest payment date. Interest will be computed on the basis of a 360 day
year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the persons who are the registered
Holders of the Securities at the close of business on the ________ or __________
immediately preceding the interest payment date. Holders must surrender
Securities to a Paying Agent to collect final principal and premium payments.
The Company will pay principal, premium and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay principal, premium and interest by
its check payable in such money. It may mail an interest check to a Holder's
registered address.
The payment of principal of and premium, if any, on this
Security shall be payable only upon surrender of this Security at the office or
agency of the Paying Agent in the Borough of Manhattan, City and State of New
York. Payments of principal of, premium, if any, and interest on this Security
shall be made at the office or agency of the Trustee maintained in the Borough
of Manhattan, City and State of New York, or, in the case of any such payments
other than the payment of principal and premium, if any, at the Company's
option, by check mailed to the Person entitled thereto at such Person's address
last appearing on the Company's register.
3. Registrar and Agents. Initially, IBJ Xxxxxxxx Bank & Trust
Company ("IBJ") will act as Registrar, Paying Agent, Conversion Agent and agent
for service of notices and demands. The Company may change any Registrar,
co-registrar, Paying Agent, Conversion Agent and agent for service of notices
and demands without notice. The Company or any of its Subsidiaries may act as
Paying Agent or Conversion Agent. The address of IBJ is Xxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
4. Indenture; Limitations. The Company issued the Securities
under an Indenture, dated as of ___________, 1997 (the "Indenture"), between the
Company and IBJ (the "Trustee"). Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code xx.xx. 77aaa-
64
77bbbb) as in effect on the date of the Indenture. The Securities are subject to
all such terms, and the Holders of the Securities are referred to the Indenture
and said Act for a statement of them.
The Securities are general unsecured obligations of the Company
limited to $_____________ principal amount. The Indenture imposes certain
limitations on the ability of the Company to, among other things, make payments
in respect of its Capital Stock, merge or consolidate with any other Person or
transfer substantially all of its assets.
5. Optional Redemption by the Company. The Company may, at its
option, redeem the Securities at any time or from time to time, in whole or in
part, together with accrued and unpaid interest to the Redemption Date, on or
after _________, 2000 at a redemption price equal to 100% of the principal
amount thereof.
6. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 principal amount may be redeemed in part, but
only in whole multiples thereof. On and after the Redemption Date interest
ceases to accrue on Securities or portions of them called for redemption.
7. Conversion. A Holder of a Security may convert such Security
into shares of common stock of the Company at any time on or after December 31,
1997 until the close of business on _________, 2002. If the Security is called
for redemption, the Holder may convert it at any time before the close of
business on the date fixed for such redemption. The initial conversion price is
$_____ per share, subject to adjustment in certain events. To determine the
number of shares issuable upon conversion of a Security, divide the principal
amount to be converted by the conversion price in effect on the conversion date.
The Company will deliver a check for any fractional share.
To convert a Security, a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to the
Conversion Agent, (3) furnish appropriate endorsements and transfer documents if
required by the Registrar or Conversion Agent, and (4) pay any transfer or
similar tax if required. No payment or adjustment is to be made on conversion
for interest accrued hereon or for dividends on shares of common stock issued on
conversion; provided, however, that if a Security is surrendered for conversion
after the record date for a payment of interest and on or before the interest
payment date, then, notwithstanding such conversion, the interest falling due to
such interest payment date will be paid to the Person in whose name the Security
is registered at the close of business on such record date and any Security
surrendered for conversion during the period from the close of business on any
regular record date to the opening of business on the corresponding interest
payment date must be accompanied by payment of an amount equal to the interest
payable on such interest payment date. A Holder may convert a portion of a
Security if the portion is $1,000 principal amount or an integral multiple
thereof.
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If the Company is a party to a consolidation or merger or a
transfer or lease of all or substantially all of its assets, the right to
convert a Security into shares of common stock may be changed into a right to
convert it into securities, cash or other assets of the Company or another
Person.
8. Subordination. This Security is subordinated to all Senior
Indebtedness of the Company. To the extent and in the manner provided in the
Indenture, Senior Indebtedness must be paid before any payment may be made to
any Holders of Securities. Any Securityholder by accepting this Security agrees
to such subordination and authorizes the Trustee to give it effect.
In addition to all other rights of Senior Indebtedness described
in the Indenture, the Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to the Senior Indebtedness or extension or renewal of the
Senior Indebtedness.
9. Right to Require Repurchase. In certain circumstances
involving the occurrence of a Change in Control (as defined in the Indenture),
the Holder hereof shall have the right to require the Company to repurchase this
Security at 101% of the principal amount hereof, together with accrued
interest to the Repurchase Date, or as provided in the Indenture. In connection
with the exercise of the repurchase right by a Holder prior to a Redemption
Date, a Holder's right to exercise such repurchase right shall terminate at the
close of business on the Business Day prior to the Redemption Date.
10. Denominations, Transfer, Exchange. The Securities issued
under the Indenture are in the aggregate principal amount of up to
$100,000,000. The Securities are in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. A
Holder may register the transfer of or exchange Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption or
register the transfer of or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
11. Persons Deemed Owners. The registered Holder of a Security
may be treated as its owner for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest on any Securities remains unclaimed for two years, the Trustee and the
Paying Agent will pay the money back to the Company at its written request.
After that, Holders may look only to the Company for payment.
13. Discharge Prior to Redemption or Maturity. The Indenture
will be discharged and canceled except for certain sections thereof upon payment
of all the Securities, or upon the irrevocable deposit with the Trustee of funds
or U.S. Government Obligations maturing
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66
on or before such payment date or Redemption Date, sufficient to pay principal,
premium, if any, and interest on such payment or redemption.
14. Amendment and Waiver. Subject to certain exceptions, without
notice to the Holders of the Securities, the Indenture or the Securities may be
amended with the consent of the Holders of at least 66-2/3% in principal amount
of the Securities then outstanding and any existing default or compliance with
any provision may be waived with the consent of the Holders of a majority in
principal amount of the Securities then outstanding. Without the consent of or
notice to any Securityholder, the Company may amend or supplement the Indenture
or the Securities to, among other things, provide for uncertificated Securities,
to cure any ambiguity, defect or inconsistency or make any other change that
does not adversely affect the rights of any Securityholder.
15. Successors. When a successor assumes all the obligations of
its predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
16. Defaults and Remedies. If an Event of Default, as defined in
the Indenture (other than a Event of Default relating to bankruptcy of the
Company), occurs and is continuing, the Trustee or the Holders of a majority in
principal amount of Securities may declare all the Securities to be due and
payable immediately in the manner and with the effect provided in the Indenture.
If an Event of Default relating to bankruptcy of the Company occurs, then all
Securities shall become immediately due and payable without any declaration or
act on the part of the Trustee or any Holder. Holders of Securities may not
enforce the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it, subject to the provisions of
the TIA, before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company is required to file
periodic reports with the Trustee as to the absence of any Default or Event of
Default.
17. Trustee Dealings with the Company. IBJ Xxxxxxxx Bank & Trust
Company, the Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not Trustee.
18. No Recourse Against Others. No shareholder, director,
officer or incorporator, as such, past, present or future, of the Company or any
successor corporation shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
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67
19. Authentication. This Security shall not be valid until the
Trustee signs the certificate of authentication on the other side of this
Security.
20. Abbreviations. Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as: TEN COM (=tenants in common),
TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture. It also will furnish the
text of this Security in larger type. Requests may be made to: American
Retirement Corporation, 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000. Attention: Chief Financial Officer.
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TRANSFER NOTICE
If you, the Holder, want to assign this Security, fill in the form below and
have your signature guaranteed:
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For value received, I or we assign and transfer this Security to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
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(Print or type assignee's name, address and zip code)
agent
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to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:
--------------------------------------------------------------------------
Your signature:
----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed by*:
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* Signature must be guaranteed by an eligible guarantor institution within the
meaning of Securities and Exchange Commission Rule 17Ad-15 (including banks,
stock brokers, savings and loan associations, national securities exchanges,
registered securities associations, clearing agencies and credit unions) with
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guarantee medallion program as may be approved
by the Registrar in addition to, or substitution for, STAMP, if this Security is
to be delivered other than to and in the name of the registered holder.
69
CONVERSION NOTICE
To convert this Security into shares of common stock of the
Company, check the box:
[ ]
To convert only part of this Security, state the principal amount to be
converted (which must be a minimum of $1,000 or any multiple thereof):
[$ ]
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If you want the Security certificate, if any, made out in another person's name,
fill in the form below:
(INSERT OTHER PERSON'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
[ ]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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(Print or type assignee's name, address and zip code)
Date:
---------------------------------------------------------------------------
Your signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed By*:_______________________________________________________
*Signature must be guaranteed by an eligible guarantor institution within the
meaning of Securities and Exchange Commission Rule 17Ad-15 (including banks,
stock brokers, savings and loan associations, national securities exchanges,
registered securities associations, clearing agencies and credit unions) with
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guarantee medallion program as may be approved
by the Registrar in addition to, or substitution for, STAMP, if this Security is
to be delivered other than to and in the name of the registered holder.
