Exhibit 4.3
AMERICAN SKIING COMPANY
10 1/2% Repriced Convertible Subordinated Debentures
due *
______________________________________
INDENTURE
Dated as of [date of issuance]
______________________________________
_______________
Trustee
______________________________________
_________________
* 5 years after date of issuance of 10 1/2% Repriced Convertible Preferred
Stock.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . .1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.2 Other Definitions . . . . . . . . . . . . . . . . . . . .4
Section 1.3 Trust Indenture Act Provisions. . . . . . . . . . . . . .5
Section 1.4 Rules of Construction . . . . . . . . . . . . . . . . . .5
ARTICLE II THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . .6
Section 2.1 Form and Dating . . . . . . . . . . . . . . . . . . . . .6
Section 2.2 Execution and Authentication. . . . . . . . . . . . . . .6
Section 2.3 Registrar, Paying Agent and Conversion Agent. . . . . . .7
Section 2.4 Paying Agent to Hold Money In Trust . . . . . . . . . . .7
Section 2.5 Securityholder Lists. . . . . . . . . . . . . . . . . . .8
Section 2.6 Transfer and Exchange . . . . . . . . . . . . . . . . . .8
Section 2.7 Replacement Securities. . . . . . . . . . . . . . . . . .9
Section 2.8 Outstanding Securities. . . . . . . . . . . . . . . . . .9
Section 2.9 Treasury Securities . . . . . . . . . . . . . . . . . . .10
Section 2.10 Temporary Securities . . . . . . . . . . . . . . . . . .10
Section 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE III REDEMPTION AND PURCHASES . . . . . . . . . . . . . . . . . .11
Section 3.1 Right to Redeem; Notice to Trustee. . . . . . . . . . . .11
Section 3.2 Selection of Securities to Be Redeemed. . . . . . . . . .11
Section 3.3 Notice of Redemption. . . . . . . . . . . . . . . . . . .11
Section 3.4 Effect of Notice of Redemption. . . . . . . . . . . . . .12
Section 3.5 Deposit of Redemption Price . . . . . . . . . . . . . . .12
Section 3.6 Securities Redeemed in Part . . . . . . . . . . . . . . .13
Section 3.7 Conversion Arrangement on Call for Redemption . . . . . .13
ARTICLE IV CONVERSION. . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 4.1 Conversion Privilege. . . . . . . . . . . . . . . . . . .14
Section 4.2 Conversion Procedure. . . . . . . . . . . . . . . . . . .14
Section 4.3 Fractional Shares . . . . . . . . . . . . . . . . . . . .15
Section 4.4 Taxes on Conversion . . . . . . . . . . . . . . . . . . .15
Section 4.5 Company to Provide Stock. . . . . . . . . . . . . . . . .15
Section 4.6 Adjustment of Conversion Price. . . . . . . . . . . . . .16
Section 4.7 No Adjustment . . . . . . . . . . . . . . . . . . . . . .19
Section 4.8 Adjustment for Tax Purposes . . . . . . . . . . . . . . .19
Section 4.9 Notice of Adjustment. . . . . . . . . . . . . . . . . . .19
Section 4.10 Notice of Certain Transactions . . . . . . . . . . . . .20
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Section 4.11 Effect of Reclassification, Consolidation,
Merger or Sale on Conversion Privilege. . . . . . 20
Section 4.12 Trustee's Disclaimer. . . . . . . . . . . . . . . . . . 21
ARTICLE V SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.1 Securities Subordinated to Senior Indebtedness . . . . . 21
Section 5.2 Securities Subordinated to Prior Payment of
All Senior Indebtedness on Dissolution,
Liquidation, Reorganization, Etc., of the
Company . . . . . . . . . . . . . . . . . . . . . 22
Section 5.3 Securityholders to Be Subrogated to Right of
Holders of Senior Indebtedness. . . . . . . . . . 23
Section 5.4 Obligations of the Company Unconditional . . . . . . . . 24
Section 5.5 Company Not to Make Payment With Respect to
Securities in Certain Circumstances . . . . . . . 24
Section 5.6 Notice to Trustee. . . . . . . . . . . . . . . . . . . . 25
Section 5.7 Application by Trustee of Monies Deposited
With It . . . . . . . . . . . . . . . . . . . . . 26
Section 5.8 Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . . . . 26
Section 5.9 Trustee to Effectuate Subordination. . . . . . . . . . . 27
Section 5.10 Right of Trustee to Hold Senior Indebtedness. . . . . . 27
Section 5.11 Article 5 Not to Prevent Events of Default. . . . . . . 27
Section 5.12 No Fiduciary Duty Created to Holders of
Senior Indebtedness . . . . . . . . . . . . . . . 27
Section 5.13 Article Applicable to Paying Agents . . . . . . . . . . 27
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.1 Payment of Securities. . . . . . . . . . . . . . . . . . 27
Section 6.2 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.3 Liquidation. . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.4 Compliance Certificates. . . . . . . . . . . . . . . . . 29
Section 6.5 Notice of Defaults . . . . . . . . . . . . . . . . . . . 29
Section 6.6 Further Instruments and Acts . . . . . . . . . . . . . . 29
ARTICLE VII SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . 30
Section 7.1 When Company May Merge, Etc. . . . . . . . . . . . . . . 30
Section 7.2 Successor Corporation Substituted. . . . . . . . . . . . 30
ARTICLE VIII DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . 31
Section 8.1 Events of Default. . . . . . . . . . . . . . . . . . . . 31
Section 8.2 Acceleration . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.3 Other Remedies . . . . . . . . . . . . . . . . . . . . . 33
Section 8.4 Waiver of Defaults and Events of Default . . . . . . . . 33
Section 8.5 Control by Majority. . . . . . . . . . . . . . . . . . . 34
Section 8.6 Limitations on Suits . . . . . . . . . . . . . . . . . . 34
Section 8.7 Rights of Holders to Receive Payment . . . . . . . . . . 34
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Section 8.8 Collection Suit by Trustee . . . . . . . . . . . . . . . 35
Section 8.9 Trustee May File Proofs of Claim . . . . . . . . . . . . 35
Section 8.10 Priorities. . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.11 Undertaking for Costs . . . . . . . . . . . . . . . . . 36
Section 8.12 Waiver of Usury, Stay or Extension Laws . . . . . . . . 36
ARTICLE IX TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.1 Duties of Trustee. . . . . . . . . . . . . . . . . . . . 36
Section 9.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . . 37
Section 9.3 Individual Rights of Trustee . . . . . . . . . . . . . . 38
Section 9.4 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . 38
Section 9.5 Notice of Default or Events of Default . . . . . . . . . 38
Section 9.6 Reports by Trustee to Holders. . . . . . . . . . . . . . 38
Section 9.7 Compensation and Indemnity . . . . . . . . . . . . . . . 39
Section 9.8 Replacement of Trustee . . . . . . . . . . . . . . . . . 39
Section 9.9 Successor Trustee by Xxxxxx, Etc.. . . . . . . . . . . . 40
Section 9.10 Eligibility; Disqualification . . . . . . . . . . . . . 40
Section 9.11 Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 10. SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . 41
Section 10.1 Termination of Company's Obligations. . . . . . . . . . 41
Section 10.2 Application of Trust Money. . . . . . . . . . . . . . . 42
Section 10.3 Repayment to Company. . . . . . . . . . . . . . . . . . 42
Section 10.4 Reinstatement . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XI AMENDMENTS, SUPPLEMENTS AND WAIVERS. . . . . . . . . . . . . 43
Section 11.1 Without Consent of Holders. . . . . . . . . . . . . . . 43
Section 11.2 With Consent of Holders . . . . . . . . . . . . . . . . 43
Section 11.3 Compliance With Trust Indenture Act . . . . . . . . . . 44
Section 11.4 Revocation and Effect of Consents . . . . . . . . . . . 44
Section 11.5 Notation on or Exchange of Securities . . . . . . . . . 44
Section 11.6 Trustee to Sign Amendments, etc.. . . . . . . . . . . . 45
ARTICLE XII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 45
Section 12.1 Trust Indenture Act Controls. . . . . . . . . . . . . . 45
Section 12.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 12.3 Communications by Holders With Other
Holders . . . . . . . . . . . . . . . . . . . . . 46
Section 12.4 Certificate and opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . 46
Section 12.5 Record Date for Vote or Consent of
Securityholders . . . . . . . . . . . . . . . . . 47
Section 12.6 Rules by Trustee, Paying Agent, Registrar,
Conversion Agent. . . . . . . . . . . . . . . . . 47
Section 12.7 Legal Holidays. . . . . . . . . . . . . . . . . . . . . 47
Section 12.8 Governing Law . . . . . . . . . . . . . . . . . . . . . 47
Section 12.9 No Adverse Interpretation of Other Agreements . . . . . 47
Section 12.10 No Recourse Against Others . . . . . . . . . . . . . . 47
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Section 12.11 Successors . . . . . . . . . . . . . . . . . . . . . . 48
Section 12.12 Multiple Counterparts. . . . . . . . . . . . . . . . . 48
Section 12.13 Separability . . . . . . . . . . . . . . . . . . . . . 48
Section 12.14 Table of Contents, Headings, etc.. . . . . . . . . . . 48
Exhibit A-1 Form of Face of Security
iv
CROSS-REFERENCE TABLE*
Indenture
TIA Section Section
----------- ---------
__________________
* This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
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INDENTURE dated as of _____________* between American Skiing Company,
a Maine corporation (the "Company"), and ______________**, a banking
corporation duly organized and existing under the laws of the state of New York,
as Trustee (the "Trustee").
Both parties agree as follows for the benefit of the other and for the
equal and ratable benefit of the registered holders of the Company's 10 1/2%
Convertible Subordinated Debentures due ______***.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 DEFINITIONS.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Adjusted IPO Price" means the IPO Price as adjusted for the events
specified in Section 4.6(a).
"Board of Directors" means the Board of Directors of the Company or
any authorized committee of the Board of Directors.
"Business Day" means a day that is not a Legal Holiday.
"Capitalized Lease Obligation" means indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with generally accepted accounting principles;
the amount of such indebtedness shall be the capitalized amount of such
obligations determined in accordance with such principles.
"Cash" or "cash" means such coin or currency of the United States as
at any time of payment is legal tender for the payment of public and private
debts.
"Certificated Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1.
_______________
* Date of Issuance.
** Insert name of trustee.
*** Five years from date of Issuance of the 10 1/2% Repriced Convertible
Preferred Stock.
"Common Stock" means the common stock, $.01 par value per share, of
the Company, as such Common Stock as it exists on the date of this Indenture or
as it may be constituted from time to time.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means the
successor.
"Conversion Price" has the meaning ascribed to such term in Section
4.1.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date of the execution of this Indenture is located at
____________________________________________,
____________________________________________ or at any other time at such other
address as the Trustee may designate from time to time by notice to the Company.
"Default" or "default" means any event which is, or after notice or
passage of time, or both, would be an Event of Default.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time pursuant to the terms of this Indenture.
"Officer" means the Chairman or any Co-Chairman of the Board, any Vice
Chairman of the Board, the President, any Vice President, the Chief Financial
Officer, the Secretary or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers;
provided, however, that for purposes of Section 6.4, "Officers' Certificate"
means a certificate signed by the principal executive officer, principal
financial officer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel. The
counsel may be an employee of or counsel to the Company or the Trustee.
"Person" or "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, or any other entity or organization, including a government or political
subdivision or instrumentality thereof.
"Principal" or "principal" of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.
"Redemption Date" or "redemption date," when used with respect to any
Security to be redeemed, means the date fixed for such redemption pursuant to
this Indenture.
2
"Redemption Price" or "redemption price," when used with respect to
any Security to be redeemed, means the price fixed for such redemption pursuant
to this Indenture, as set forth in the form of Security annexed as Exhibit A-1
hereto.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities" means the 10 1/2% Convertible Subordinated Debentures due
_______* or any of them (each, a "Security"), as amended or supplemented from
time to time, that are issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the following: (a) the principal of and
premium, if any, and interest (including, without limitation, any interest
accruing subsequent to the filing of a petition or other action concerning
bankruptcy or other similar proceedings, whether or not constituting an allowed
claim in any such proceedings) on, and fees, costs, enforcement expenses
(including legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations in respect of, the following,
whether presently outstanding or hereafter incurred or created: all indebtedness
or obligations of the Company to any person, including, but not limited to,
banks and other lending institutions, for money borrowed (other than that
evidenced by the Securities) or in respect of credit or other banking facilities
and which is evidenced by a note, bond, debenture, loan agreement, a lease
intended as security or similar instrument or agreement (including purchase
money obligations with an original maturity in excess of one year and
noncontingent obligations to reimburse any bank or other person in respect of
amounts paid under letters of credit); (b) commitment or standby fees due and
payable to lending institutions with respect to credit facilities available to
the Company; (c) all noncontingent obligations of the Company (i) for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, (ii) under interest rate swaps, caps, collars,
options and similar arrangements, and (iii) under any foreign exchange contract,
currency swap agreement, futures contract, currency option contract, or other
foreign currency hedge; (d) all obligations of the Company for the payment of
money relating to a Capitalized Lease Obligation; (e) any liabilities of others
described in the preceding clauses (a), (b), (c) and (d) which the Company has
guaranteed or which are otherwise its legal liability; and (f) renewals,
extensions, refundings, restructurings, amendments and modifications of any such
indebtedness or guarantee. Notwithstanding anything to the contrary in this
Indenture or the Securities, "Senior Indebtedness" shall not include (x) any
particular indebtedness, lease, fee, obligation, renewal, extension, refunding,
restructuring, amendment or modification if, under the express provisions of the
instrument creating or evidencing the same, or pursuant to which the same is
outstanding, such indebtedness, lease, fee, obligation, renewal, extension,
refunding, restructuring, amendment or modification thereof is stated to be not
superior in right of payment to the Securities, (y) indebtedness of the Company
(i) owing, directly or indirectly, to any person under or in respect of any
employee benefit plan of the Company, or (ii) owing, directly or
_______________
* Insert date five years from date of Issuance of the 10 1/2% Repriced
Convertible Preferred Stock.
3
indirectly, to any employee of the Company or any Affiliate of the Company, and
(z) the Securities.
"Subsidiary" means any corporation of which at least a majority of the
outstanding capital stock having voting power under ordinary circumstances to
elect directors of such corporation shall at the time be held, directly or
indirectly, by the Company, by the Company and one or more Subsidiaries, or by
one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 and as in effect on the date of this Indenture,
except as provided in Section 11.3, and except to the extent any amendment to
the Trust Indenture Act expressly provides for application of the Trust
Indenture Act as in effect on another date.
"Trading Day" means, with respect to any security, each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any day on which securities
are not generally traded on the exchange or market in which such security is
traded.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture, and
thereafter means the successor.
"Trust Officer" means, with respect to the Trustee, any officer
assigned to the Corporate Trust office, including any managing director, vice
president, assistant vice president, assistant treasurer, assistant secretary or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and having direct
responsibility for the administration of this Indenture, and also, with respect
to a particular matter, any other officer, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
Section 1.2 Other Definitions.
-----------------
Term Defined in Section
---- ------------------
"Agent Members" 2.1
"Bankruptcy Law" 8.1
"Company Order" 2.2
"Conversion Agent" 2.3
"Conversion Date" 4.2
"Conversion Price" 4.6
"Conversion Shares" 4.6
"Custodian" 8.1
"DTC" 2.1
"Default Notice" 5.5
"Depositary" 2.1
"Determination Date" 4.6
"Distribution Date" 4.6
4
"Event of Default" 8.1
"Exchange Act" 3.8
"Legal Holiday" 12.7
"Paying Agent" 2.3
"Registrar" 2.3
"Rights" 4.6
"Transfer Restricted Security" 2.12
"Triggering Distribution" 4.6
"Unissued Shares" 3.8
"U.S. Government Obligations" 10.1
Section 1.3 TRUST INDENTURE ACT PROVISIONS.
Whenever this Indenture refers to a provision of the TIA, that
provision is incorporated by reference in and made a part of this Indenture.
The Indenture shall also include those provisions of the TIA required to be
included herein by the provisions of the Trust Indenture Reform Act of 1990.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC;
"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;
and
"obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein 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 generally
accepted accounting principles in effect on the date
hereof, and any other reference in this Indenture to
"generally accepted accounting principles" refers to
generally accepted accounting principles in effect on
the date hereof;
5
(3) words in the singular include the plural, and words in
the plural include the singular;
(4) provisions apply to successive events and transactions;
and
(5) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE II
THE SECURITIES
Section 2.1 FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A-1, which is incorporated in and made
part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company shall
approve, with the consent of the Trustee, the form of the Securities and any
notation, legend or endorsement thereon. Each Security shall be dated the date
of its authentication.
Section 2.2 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities.
Typographic and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Security which has been authenticated and delivered by the Trustee.
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 be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$____________ upon a written order or orders of the Company signed by two
officers of the Company (a "Company Order"). The Company Order shall specify
the amount of Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $___________, except as
provided above and in Section 2.7.
The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An
6
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 of the Company.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the "Registrar"), an
office or agency where Securities may be presented for payment (the "Paying
Agent"), an office or agency where Securities may be presented for conversion
(the "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 and of their transfer and
exchange.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any Agent not a party to this
Indenture. If the Company 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 or any
Affiliate of the Company may act as Paying Agent (except for the purposes of
Section 6.1 and Article 10), Registrar or Conversion Agent.
The Company initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands in connection with
the Securities.
Section 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
On or prior to each due date of the principal of or interest on any
Securities, the Company shall deposit with the Paying Agent a sum sufficient to
pay such principal or interest so becoming due. Subject to Section 5.7, the
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal of or
interest on the Securities, and shall 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 an Affiliate of the Company acts as Paying Agent, it shall, on or
before each due date of the principal of 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 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 (other than the Company) shall have no further liability for the
money.
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Section 2.5 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. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before each semiannual interest payment date and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Securityholders.
Section 2.6 TRANSFER AND EXCHANGE.
(a) When a Security is presented to the Registrar with a request to
register a transfer thereof or to exchange such Security for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested; provided, however, that
every Security presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Registrar duly executed by the Holder thereof or his or
her attorney duly authorized in writing. To permit registration of transfers
and exchanges, upon surrender of any Security for registration of transfer or
exchange at the office or agency maintained pursuant to Section 2.3, the Company
shall execute and the Trustee shall authenticate Securities of a like aggregate
principal amount at the Registrar's request. Any exchange or transfer shall be
without charge, except that the Company or the Registrar may require payment of
a sum sufficient to cover any tax, assessment or other governmental charge that
may be imposed in relation thereto, and provided further that this sentence
shall not apply to any exchange pursuant to Section 2.10, 3.6, 3.11, 4.2 (last
paragraph) or 11.5.
Neither the Company, the Registrar nor the Trustee shall be required
to exchange or register a transfer of (a) any Securities for a period of 15 days
next preceding any selection of Securities to be redeemed, or (b) any Securities
or portions thereof selected or called for redemption (except, in the case of
redemption of a Security in part, the portion not to be redeemed).
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Company, evidencing the same debt and entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
(b) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(c) Any Registrar appointed pursuant to Section 2.3 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
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(d) No Registrar shall be required to make registrations of transfer
or exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
Section 2.7 REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Company, the Registrar
or the Trustee, or the Company, the Registrar and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company, the Registrar and the Trustee such Security
or indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Company, the Registrar or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute,
and upon its written request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be redeemed or
purchased by the Company pursuant to Article 3, the Company in its discretion
may, instead of issuing a new Security, pay, redeem or purchase such Security,
as the case may be.
Upon the issuance of any new Securities under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee or the Registrar)
in connection therewith.
Every new Security issued pursuant to this Section 2.7 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 benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.8 OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities authenticated by
the Trustee, except for those canceled by it, those delivered to it for
cancellation and those described in this Section 2.8 as not outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
9
If the Paying Agent (other than the Company) holds on a redemption
date or maturity date money sufficient to pay the principal of, and 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.
Subject to the restrictions contained in Section 2.9, a Security does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.
Section 2.9 TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that, for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to the Securities and that the pledgee is not the Company or any
other obligor on the Securities or any Affiliate of the Company or of such other
obligor.
Section 2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and execute, and, upon the order of the Company, the Trustee shall
authenticate and deliver, temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company with the consent of the Trustee considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and deliver definitive Securities in exchange for
temporary Securities.
Section 2.11 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 or its agent any Securities surrendered to them for
transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, redemption, payment, conversion or cancellation and
shall deliver the canceled Securities to the Company. The Company may not issue
new Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 4.
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ARTICLE III
REDEMPTION AND PURCHASES
Section 3.1 RIGHT TO REDEEM; NOTICE TO TRUSTEE.
The Securities may be redeemed at the election of the Company, as a
whole or from time to time in part, at the redemption prices specified in
paragraph 5 of the form of Security attached hereto as Exhibit A-1, together
with accrued interest up to but not including the Redemption Date; provided that
the Securities may not be so redeemed prior to the fifth anniversary of their
issuance unless the closing price per share of the Common Stock for any 45
consecutive trading days ending no more than 30 calendar days prior to the date
notice of redemption is first mailed is at least 140% of the Adjusted IPO Price
then in effect.
If the Company elects to redeem Securities pursuant to this Section
3.1 and paragraph 5 of the Securities, it shall notify the Trustee at least 100
days prior to the redemption date as fixed by the Company of the redemption date
and the principal amount of Securities to be redeemed. If fewer than all of the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall not
be less than five days after the date of notice to the Trustee.
Section 3.2 SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed, the Trustee
shall, not more than 100 days prior to the redemption date, select the
Securities to be redeemed by lot. The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption. Securities in
denominations of $1,000 may only be redeemed in whole. The Trustee may select
for redemption portions (equal to $1,000 or any multiple thereof) of the
principal of Securities that have denominations larger than $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
Section 3.3 NOTICE OF REDEMPTION.
At least 90 days but not more than 120 days before a redemption date,
the Company shall mail or cause to be mailed a notice of redemption by
first-class mail to each Holder of Securities to be redeemed at such Xxxxxx's
address as it appears on the Registrar's books.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the then current Conversion Price;
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(4) the name and address of the Paying Agent and the Conversion
Agent;
(5) that Securities called for redemption must be presented and
surrendered to the Paying Agent to collect the redemption
price;
(6) that the Securities called for redemption may be converted
at any time before the close of business on the redemption
date; provided that at the option of the Company, upon
conversion any accrued and unpaid interest on the Securities
shall be paid to the Holder thereof, at the option of the
Company, either (i) in freely tradeable shares of Common
Stock at the Conversion Price or (ii) in cash.
(7) that Holders who wish to convert Securities must satisfy the
requirements in paragraph 8 of the Securities;
(8) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption shall
cease accruing on and after the redemption date and the only
remaining right of the Holder shall be to receive payment of
the redemption price upon presentation and surrender to the
Paying Agent of the Securities; 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 presentation and
surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion
thereof will be issued.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice, except for Securities that are converted in accordance with the
provisions of Section 4.1. Upon presentation and surrender to the Paying Agent,
Securities called for redemption shall be paid at the redemption price, plus
accrued interest up to but not including the redemption date.
Section 3.5 DEPOSIT OF REDEMPTION PRICE.
On or prior to 12:00 noon New York time on the redemption date, the
Company shall deposit with the Paying Agent (or, if the Company acts as Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest on all
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Securities to be redeemed on that date, other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation or have been converted. The Paying
Agent shall return to the Company any money not required for that purpose
because of the conversion of securities pursuant to Article 4 or otherwise. If
such money is then held by the Company in trust and is not required for such
purpose, it shall be discharged from the trust.
Section 3.6 SECURITIES REDEEMED IN PART.
Upon presentation and surrender of a Security that is redeemed in
part, the Company shall execute and the Trustee shall authenticate for and
deliver to the Holder a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.
Section 3.7 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities called for redemption
by an agreement with one or more investment bankers or other purchasers to
purchase such Securities by paying to the Paying Agent in trust for the
Securityholders, on or before the close of business on the Redemption Date, an
amount that, together with any amounts deposited with the Paying Agent by the
Company for the redemption of such Securities, is not less than the Redemption
Price, together with interest, if any, accrued to, but not including, the
Redemption Date, of such Securities. Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the Redemption
Price of such Securities, including all accrued interest, if any, shall be
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 4) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid. The Paying Agent shall hold and pay
to the Holders whose Securities are selected for redemption any such amount paid
to it for purchase and conversion in the same manner as it would moneys
deposited with it by the Company for the redemption of Securities. Without the
Paying Agent's prior written consent, no arrangement between the Company and
such purchasers for the purchase and conversion of any Securities shall increase
or otherwise affect any of the powers, duties, responsibilities or obligations
of the Paying Agent as set forth in this Indenture, and the Company agrees to
indemnify the Paying Agent from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Paying Agent in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
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ARTICLE IV
CONVERSION
Section 4.1 CONVERSION PRIVILEGE.
Subject to the further provisions of this Section 4.1, a Holder of a
Security may convert such Security into Common Stock at any time prior to
maturity, at the Conversion Price then in effect; provided, however, that, if
such Security is called for redemption pursuant to Article 3, such conversion
right shall terminate at the close of business on the redemption date for such
Security (unless the Company shall default in making the redemption payment when
due, in which case the conversion right shall terminate at the close of business
on the date such default is cured and such Security is redeemed). The number of
shares of Common Stock issuable upon conversion of a Security shall be
determined by dividing the principal amount of the Security or portion thereof
surrendered for conversion by the Conversion Price in effect on the Conversion
Date. The initial Conversion Price is set forth in paragraph 7 of the
Securities and is subject to adjustment as provided in this Article 4.
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to
conversion of all of a Security also apply to conversion of a portion of a
Security. Upon conversion any accrued and unpaid interest on the Securities
shall be paid to the Holder thereof, at the option of the Company, either (i) in
freely tradeable shares of Common Stock at the Conversion Price or (ii) in cash.
A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted his or her Securities to Common
Stock, and only to the extent such Securities are deemed to have been converted
into Common Stock pursuant to this Article 4.
Section 4.2 CONVERSION PROCEDURE.
To convert a Security, a Holder must (a) complete and manually sign
the conversion notice on the back of the Security and deliver such notice to the
Conversion Agent, (b) surrender the Security to the Conversion Agent, (c)
furnish appropriate endorsements and transfer documents if required by the
Registrar or the Conversion Agent, and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is
the "Conversion Date." As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder through the Conversion Agent a certificate
for the number of whole shares of Common Stock issuable upon the conversion and
cash in lieu of any fractional shares pursuant to Section 4.3.
The person in whose name the certificate is registered shall be deemed
to be a shareholder of record on the Conversion Date; provided, however, that no
surrender of a Security 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
14
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 for all
purposes at the close of business on the next succeeding day on which such stock
transfer books are open; provided, further, that such conversion shall be at the
Conversion Price in effect on the Conversion Date as if the stock transfer books
of the Company had not been closed. Upon conversion of a Security, such person
shall no longer be a Holder of such Security. No payment or adjustment will be
made for dividends or distributions on shares of Common Stock issued upon
conversion of a Security.
Upon conversion of a Security, the Holder shall be paid, in cash, an
amount equal to accrued interest on the converted Security.
If a Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Securities converted.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security equal in principal amount to the unconverted portion of the
Security surrendered.
Section 4.3 FRACTIONAL SHARES.
The Company will not issue fractional shares of Common Stock upon
conversion of Securities. In lieu thereof, the Company will pay an amount in
cash based upon the closing sale price of the Common Stock on the Trading Day
immediately prior to the date of conversion.
Section 4.4 TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon such conversion. However, the Holder shall pay any such
tax which is due because the Holder requests the shares to be issued in a name
other than the Holder's name. The Conversion Agent may refuse to deliver the
certificate representing the Common Stock being issued in a name other than the
Holder's name until the Conversion Agent receives a sum sufficient to pay any
tax which will be due because the shares are to be issued in a name other than
the Holder's name. Nothing herein shall preclude any tax withholding required
by law or regulation.
Section 4.5 COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Securities hereunder, and
from time to time as it may be necessary, reserve, out of its authorized but
unissued Common Stock, a sufficient number of shares of Common Stock to permit
the conversion of all outstanding Securities into shares of Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly authorized,
validly issued, fully paid and nonassessable and shall be free from preemptive
rights and free of any lien or adverse claim.
15
The Company will endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then listed or quoted.
Section 4.6 ADJUSTMENT OF CONVERSION PRICE.
The conversion price as stated in paragraph 8 of the Securities (the
"Conversion Price") shall be adjusted from time to time by the Company as
follows:
(a) In case the Company shall (i) pay a dividend in shares of Common
Stock to all holders of Common Stock, (ii) make a distribution in shares of
Common Stock to all holders of Common Stock, (iii) subdivide its outstanding
Common Stock into a greater number of shares, or (iv) combine its outstanding
Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be entitled to receive that number
of shares of Common Stock which he or she would have owned had such Security
been converted immediately prior to the happening of such event. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend in shares or distribution and shall
become effective immediately after the effective date in the case of subdivision
or combination.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share of Common Stock (as determined in
accordance with subsection (e) of this Section 4.6) at the record date for the
determination of shareholders entitled to receive such rights or warrants, the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on such
record date, plus the number of shares which the aggregate offering price of the
total number of shares of Common Stock so offered (or the aggregate Conversion
Price of the convertible securities so offered) would purchase at such current
market price, and of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock offered (or into which the convertible securities so
offered are convertible). Such adjustment shall be made successively whenever
any such rights or warrants are issued, and shall become effective immediately
after such record date. If at the end of the period during which such rights or
warrants are exercisable not all rights or warrants shall have been exercised,
the adjusted Conversion Price shall be immediately readjusted to what it would
have been based upon the number of additional shares of Common Stock actually
issued (or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
16
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of capital stock of the Company (other
than Common Stock), evidences of indebtedness or other non-cash assets
(including securities of any company other than the Company), or shall
distribute to all or substantially all holders of its Common Stock rights or
warrants to subscribe for or purchase any of its securities (excluding those
referred to in subsection (b) of this Section 4.6), then in each such case 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 date of such distribution by a fraction of which the numerator shall be the
current market price per share (as defined in subsection (e) of this Section
4.6) of the Common Stock on the record date mentioned below less the fair market
value on such record date (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value) of the
portion of the capital stock or assets or evidences of indebtedness so
distributed or of such rights or warrants applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the record date), and of which the denominator shall be the
current market price per share (as defined in subsection (e) of this Section
4.6) of the Common Stock on such record date. Such adjustment shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the Company shall distribute rights or warrants
(other than those referred to in subsection (b) of this Section 4.6) ("Rights")
pro rata to holders of Common Stock, the Company may, in lieu of making any
adjustment pursuant to this Section 4.6, make proper provision so that each
holder of a Security who converts such Security (or any portion thereof) after
the record date for such distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such conversion, in addition to
the shares of Common Stock issuable upon such conversion (the "Conversion
Shares"), a number of Rights to be determined as follows: (i) if such
conversion occurs on or prior to the date for the distribution to the holders of
Rights of separate certificates evidencing such Rights (the "Distribution
Date"), the same number of Rights to which a holder of a number of shares of
Common Stock equal to the number of Conversion Shares is entitled at the time of
such conversion in accordance with the terms and provisions of and applicable to
the Rights and (ii) if such conversion occurs after the Distribution Date, the
same number of Rights to which a holder of the number of shares of Common Stock
into which the principal amount of the Security so converted was convertible
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the terms and provisions of and applicable
to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute (a "Triggering Distribution") to all or substantially all holders of
its Common Stock cash in an aggregate amount that, together with the aggregate
amount of any other cash distributions to all or substantially all holders of
its Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.6 has been made, exceeds 15% of the product of the
current market price per share of Common Stock (as determined in accordance with
subsection (e) of this Section 4.6) on the Business Day (the "Determination
Date") immediately preceding the day on which such Triggering Distribution is
declared by the Company multiplied by the number of shares of Common Stock
outstanding on such date (excluding shares held in the Treasury of the
17
Company), the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying such Conversion Price in effect immediately
prior to the Determination Date by a fraction of which the numerator shall be
the current market price per share of the Common Stock (as determined in
accordance with subsection (e) of this Section 4.6) on the Determination Date
less the amount of cash so distributed within such 12 months (including, without
limitation, the Triggering Distribution) applicable to one share of Common Stock
(determined on the basis of the number of shares of Common Stock outstanding on
the Determination Date) and the denominator shall be such current market price
per share of the Common Stock (as determined in accordance with subsection (e)
of this Section 4.6) on the Determination Date, such reduction to become
effective immediately prior to the opening of business on the day following the
date on which the Triggering Distribution is paid.
(e) For the purpose of any computation under subsections (b), (c) and
(d) of this Section 4.6, the current market price per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices for the
30 consecutive Trading Days commencing 45 Trading Days before (i) the
Determination Date with respect to distributions under subsection (d) of this
Section 4.6 or (ii) the record date with respect to distributions, issuances or
other events requiring such computation under subsection (b) or (c) of this
Section 4.6. The closing price for each day shall be the last reported sales
price or, in case no such reported sale takes place on such date, the average of
the reported closing bid and asked prices in either case on the NASDAQ National
Market System or, if the Common Stock is not listed or admitted to trading on
the NASDAQ National Market System, on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, the closing sales price
of the Common Stock as quoted by NASDAQ or, in case no reported sales takes
place, the average of the closing bid and asked prices as quoted by NASDAQ or
any comparable system or, if the Common Stock is not quoted on NASDAQ or any
comparable system, the closing sales price or, in case no reported sale takes
place, the average of the closing bid and asked prices, as furnished by any two
members of the National Association of Securities Dealers, Inc. selected from
time to time by the Company for that purpose. If no such prices are available,
the current market price per share shall be the fair value of a share of Common
Stock as determined by the Board of Directors of the Company.
(f) In any case in which this Section 4.6 shall require that an
adjustment be made following a record date or a Determination Date, as the case
may be, established for purposes of this Section 4.6, the Company may elect to
defer (but only until five Business Days following the filing by the Company
with the Trustee of the certificate described in Section 4.9) issuing to the
holder of any Security converted after such record date or Determination Date
the shares of Common Stock and other capital stock of the Company issuable upon
such conversion over and above the shares of Common Stock and other capital
stock of the Company issuable upon such conversion only on the basis of the
Conversion Price prior to adjustment; and, in lieu of the shares the issuance of
which is so deferred, the Company shall issue or cause its transfer agents to
issue due bills or other appropriate evidence prepared by the Company of the
right to receive such shares. If any distribution in respect of which an
adjustment to the Conversion Price is required to be made as of the record date,
effective date or Determination Date therefor is
18
not thereafter made or paid by the Company for any reason, the Conversion Price
shall be readjusted to the Conversion Price which would then be in effect if
such record date had not been fixed or such effective date or Determination Date
had not occurred.
Section 4.7 NO ADJUSTMENT.
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 4.7 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section
4.6 if all Securityholders are entitled to participate in the transaction on a
basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction. The Company shall give 30 days prior notice to
the Trustee and to the Holders of the Securities of any such determination.
No adjustment need be made for rights to purchase Common Stock or
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.
No adjustment need be made for a change in the par value or a change
to no par value of the Common Stock.
To the extent that the Securities become convertible into the right to
receive cash, no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash.
Section 4.8 ADJUSTMENT FOR TAX PURPOSES.
The Company shall be entitled to make such reductions in the
Conversion Price, in addition to those required by Section 4.6, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exchangeable for stock
hereafter made by the Company to its shareholders shall not be taxable; provided
that no such reduction shall give rise to a right of the Company to optionally
redeem the securities pursuant to Section 3.1.
Section 4.9 NOTICE OF ADJUSTMENT.
Whenever the Conversion Price is adjusted, the Company shall promptly
mail to Securityholders a notice of the adjustment and file with the Trustee an
Officers' Certificate briefly stating the facts requiring the adjustment and the
manner of computing it. The certificate shall be conclusive evidence of the
correctness of such adjustment.
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Section 4.10 NOTICE OF CERTAIN TRANSACTIONS.
In the event that:
(1) the Company takes any action which would require an
adjustment in the Conversion Price;
(2) the Company consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation and
shareholders of the Company must approve the transaction; or
(3) there is a dissolution or liquidation of the Company,
the Company shall mail to Securityholders and file with the Trustee a notice
stating the proposed record or effective date, as the case may be. The Company
shall mail the notice at least ten days before such date. Failure to mail such
notice or any defect therein shall not affect the validity of any transaction
referred to in clause (1), (2) or (3) of this Section 4.10.
Section 4.11 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (a) any reclassification
or change of shares of Common Stock issuable upon conversion of the Securities
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination, or any
other change for which an adjustment is provided in Section 4.6); (b) any
consolidation or merger to which the Company is a party other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of Common Stock;
or (c) any sale or conveyance of all or substantially all of the assets of the
Company as an entirety, then the Company, or such successor or purchasing
corporation, as the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of stock and other securities and property
(including cash) receivable upon such reclassification, change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance. Such
supplemental indenture shall provide for adjustments of the Conversion Price
which shall be as nearly equivalent as may be practicable to the adjustments of
the Conversion Price provided for in this Article 4. If, in the case of any
such consolidation, merger, sale or conveyance, the stock or other securities
and property (including cash) receivable thereupon by a holder of Common Stock
include shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the
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interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing. The provisions of
this Section 4.11 shall similarly apply to successive consolidations, mergers,
sales or conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 4.11, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or securities or property (including cash) receivable
by Holders of the Securities upon the conversion of their Securities after any
such reclassification, change, consolidation, merger, sale or conveyance, any
adjustment to be made with respect thereto and that all conditions precedent
have been complied with and (y) an Opinion of Counsel that all conditions
precedent have been complied with.
Section 4.12 TRUSTEE'S DISCLAIMER.
The Trustee has no duty to determine if the conditions precedent to
the Company's redemption rights under Section 3 have been satisfied and to
determine when an adjustment under this Article 4 should be made, how it should
be made or what such adjustment should be, but may accept as conclusive evidence
of that fact or the correctness of any such adjustment, and shall be protected
in relying upon, an Officers' Certificate including the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 4.9. The Trustee makes no representation as to the validity
or value of any securities or assets issued upon conversion of Securities, and
the Trustee shall not be responsible for the Company's failure to comply with
any provisions of this Article 4.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.11, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.11.
ARTICLE V
SUBORDINATION
Section 5.1 SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each holder of Securities issued
hereunder by his or her acceptance thereof likewise covenants and agrees, that
all Securities shall be issued subject to the provisions of this Article 5; and
each person holding any Security, whether upon original issue or upon transfer
or assignment thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of and interest on all Securities issued
hereunder (including, without limitation, in connection with any redemption of
Securities) shall, to the extent and in the manner hereinafter set forth, be
subordinated and subject in right of payment to
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the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter created, assumed or guaranteed.
Section 5.2 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION, REORGANIZATION, ETC., OF THE COMPANY.
Upon the payment or distribution of the assets of the Company of any
kind or character, whether in cash, property or securities (including any
collateral at any time securing the Securities), to creditors upon any
dissolution, winding-up, total or partial liquidation or reorganization of the
Company (whether voluntary or involuntary, or in bankruptcy, insolvency,
reorganization, liquidation, receivership proceedings, or upon an assignment for
the benefit of creditors, or any other marshalling of the assets and liabilities
of the Company, or otherwise), then in such event:
(a) all Senior Indebtedness (including principal thereof, interest
thereon and fees and expenses relating thereto) and the reasonable fees and
expenses of the Trustee shall first be paid in full, in cash, or have provision
made for such payment, before any payment is made on account of the principal of
or interest on the indebtedness evidenced by the Securities or any deposit is
made pursuant to Section 6.3;
(b) any payment 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, junior, or the payment of which is otherwise subordinate, at least
to the extent provided in this Article 5, with respect to the Securities, to the
payment of all Senior Indebtedness at that time outstanding and to the payment
of all securities issued in exchange therefor to the holders of the Senior
Indebtedness at the time outstanding), to which the Holders or the Trustee on
behalf of the Holders would be entitled except for the provisions of this
Article 5, including any such payment or distribution which may be payable or
deliverable by reason of the payment of another debt of the Company being
subordinated to the payment of the Securities, shall be paid or delivered by any
debtor, Custodian or other person making such payment or distribution, directly
to the holders of the Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness have been
issued, ratably according to the aggregate amounts remaining unpaid on account
of the principal of, interest on and fees and expenses relating to the Senior
Indebtedness held or represented by each, for application to payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior
Indebtedness in full after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of such Senior Indebtedness;
and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 5.2, any payment 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, junior, or the payment of which is otherwise subordinate, at least
22
to the extent provided for in this Article 5, 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 thereof to the holders of Senior
Indebtedness at the time outstanding), shall be received by the Trustee or the
Holders before all Senior Indebtedness is paid in full, or provision made for
its payment, such payment or distribution (subject to the provisions of Sections
5.6 and 5.7) shall be held in trust for the benefit of, and shall be immediately
paid or delivered by the Trustee or such Holders, as the case may be, to, the
holders of Senior Indebtedness remaining unpaid or unprovided for, or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the principal of, interest on and fees and
expenses relating to the Senior Indebtedness held or represented by each, for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full after giving effect to
any concurrent payment or distribution, or provision therefor, to the holders of
such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of the Company.
Upon any distribution of assets of the Company referred to in this
Article 5, the Trustee, subject to the provisions of Sections 9.1 and 9.2, and
the Holders shall be entitled to rely conclusively upon any order or decree by
any court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceeding is pending, or a certificate of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 5.
Section 5.3 SECURITYHOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS OF
SENIOR INDEBTEDNESS.
Subject to the prior payment in full of all Senior Indebtedness then
due, the Holders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until the principal of and interest on the
Securities shall be paid in full, and, for purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of assets,
whether in cash, property or securities, distributable to the holders of Senior
Indebtedness under the provisions hereof to which the Holders would be entitled
except for the provisions of this Article 5, and no payment pursuant to the
provisions of this Article 5 to the holders of Senior Indebtedness by the
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 5 are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
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Section 5.4 OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article 5 or elsewhere in this Indenture or
in any Security is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Securities, as and when the same
shall become due and payable in accordance with the terms of the Securities, or
to affect the relative rights of the Holders and other creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon the happening of an Event of Default under this
Indenture, subject to the provisions of Article 8, and the rights, if any, under
this Article 5 of the holders of Senior Indebtedness in respect of assets,
whether in cash, property or securities of the Company received upon the
exercise of any such remedy.
Section 5.5 COMPANY NOT TO MAKE PAYMENT WITH RESPECT TO SECURITIES
IN CERTAIN CIRCUMSTANCES.
(a) Upon the happening of a default in payment (whether at maturity
or at a date fixed for prepayment or by acceleration or otherwise) of the
principal of or interest on any Senior Indebtedness, as such default is defined
under or in respect of such Senior Indebtedness or in any agreement pursuant to
which such Senior Indebtedness has been incurred, then, unless and until the
amount of such Senior Indebtedness then due shall have been paid in full or
provision made therefor in a manner satisfactory to the holders of such Senior
Indebtedness, or such default shall have been cured or waived or shall have
ceased to exist, the Company shall not pay principal of or interest on the
Securities or make any deposit pursuant to Section 6.3 or 10.1 and shall not
repurchase, redeem or otherwise retire any Securities (collectively, "pay the
Securities").
(b) Upon the happening of an event of default with respect to any
Senior Indebtedness (other than under circumstances when the terms of subsection
(a) of this Section 5.5 are applicable), as such event of default is defined
under or in respect of such Senior Indebtedness or in any agreement pursuant to
which such Senior Indebtedness has been incurred, permitting the holders thereof
to accelerate the maturity thereof, and upon written notice thereof given to the
Company and the Trustee by any holders of such Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior
Indebtedness have been issued (a "Default Notice"), then, unless and until such
event of default shall have been cured or waived in writing by the holders of
such Senior Indebtedness or shall have ceased to exist, no direct or indirect
payment shall be made with respect to the principal of or interest on the
Securities or to acquire any of the Securities or on account of the redemption
or mandatory repurchase provisions of the Securities; provided, however, that
this subsection (b) shall not prevent the making of any such payment (which is
not otherwise prohibited by subsection (a) of this Section 5.5) for more than
120 days after the Default Notice shall have been given unless the Senior
Indebtedness in respect of which such event of default exists has been declared
due and payable in its entirety, in which
24
case no such payment may be made until such acceleration has been waived,
rescinded or annulled, or such Senior Indebtedness shall have been paid in full,
or payment thereof shall be duly provided for in cash or in any other manner
satisfactory to the holders of such Senior Indebtedness. Notwithstanding the
foregoing, not more than one Default Notice shall be given with respect to the
same issue of Senior Indebtedness within a period of 360 consecutive days, and
no event of default which existed or was continuing on the date of any Default
Notice and was known to the holders of such issue of Senior Indebtedness shall
be made the basis for the giving of a subsequent Default Notice by the holders
of such issue of Senior Indebtedness.
(c) In the event that, notwithstanding the foregoing provisions of
this Section 5.5, any payment on account of the principal of or interest on the
Securities shall be made by or on behalf of the Company and received by the
Trustee, any Holder or any Paying Agent (or, if the Company is acting as its own
Paying Agent, money for any such payment shall be segregated and held in trust),
after the happening of a default under any Senior Indebtedness of the type
specified in subsections (a) and (b) of this Section 5.5, then, unless and until
the amount of such Senior Indebtedness then due shall have been paid in full, or
provision made therefor or such default shall have been cured or waived, such
payment (subject, in each case, to the provisions of Sections 5.6 and 5.7 and
the proviso contained in subsection (b) of this Section 5.5) shall be held in
trust for the benefit of, and shall be immediately paid over to, the holders of
Senior Indebtedness or their representative or representatives or the trustee or
trustees under any indenture under which any instruments evidencing any of the
Senior Indebtedness may have been issued ratably according to the aggregate
amounts remaining unpaid on account of the principal of and interest on, and
fees and other charges in respect of, the Senior Indebtedness held or
represented by each, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of Senior Indebtedness.
Section 5.6 NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article 5 or any other provision of this Indenture, the Trustee shall not
at any time be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee, unless and until the
Trustee shall have received written notice thereof from the Company or from the
holder or holders of Senior Indebtedness or from their representative or
representatives or from the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Indebtedness have been
issued; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Sections 9.1 and 9.2, shall be entitled to assume
conclusively that such facts do not exist.
The Trustee shall be entitled to rely conclusively on the delivery to
it of a written notice by a person representing himself or herself to be a
holder of Senior Indebtedness (or a representative of such holder or the trustee
under any indenture pursuant to which any instruments evidencing any of such
Senior Indebtedness have been issued) to establish that such
25
notice has been given by a holder of Senior Indebtedness or a representative 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 5, 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
each person under this Article 5, 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 5.7 APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Money or U.S. Government Obligations deposited in trust with the
Trustee pursuant to Sections 6.3 and 10.1 and not in violation of this Article 5
shall be for the sole benefit of Securityholders and shall thereafter not be
subject to the subordination provisions of this Article 5. Otherwise, any
deposit of monies by the Company with the Trustee or any Paying Agent (whether
or not in trust) for the payment of the principal of or interest on any
Securities shall be subject to the provisions of Sections 5.1, 5.2, 5.3 and 5.5;
except that, if two Business Days prior to the date on which by the terms of
this Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of either the principal of or interest on any
Security) the Trustee shall not have received with respect to such monies the
notice provided for in Section 5.6, then the Trustee or any Paying Agent shall
have full power and authority to receive such monies and to apply such monies to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such date. This
Section 5.7 shall be construed solely for the benefit of the Trustee and the
Paying Agent and shall not otherwise affect the rights that holders of Senior
Indebtedness may have to recover any such payments from the Holders in
accordance with the provisions of this Article 5.
Section 5.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. The holders of any Senior Indebtedness may extend,
renew, modify or amend the terms of such Senior Indebtedness or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company, all without affecting the liabilities and obligations of the
parties to this Indenture or the Holders. No provision in any supplemental
indenture which affects the superior position of the holders of the Senior
Indebtedness shall be effective against the holders of the Senior Indebtedness
unless the holders of such Senior Indebtedness (required pursuant to the terms
of such Senior Indebtedness to give such consent) have consented thereto.
26
Section 5.9 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 5 and appoints the Trustee his or her attorney-in-fact for any and all
such purposes.
Section 5.10 RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article 5 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 this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 9.7.
Section 5.11 ARTICLE 5 NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of the principal of or
interest on the Securities by reason of any provision in this Article 5 shall
not be construed as preventing the occurrence of an Event of Default under
Section 8.1.
Section 5.12 NO FIDUCIARY DUTY CREATED TO HOLDERS OF SENIOR
INDEBTEDNESS.
Notwithstanding any other provision in this Article 5, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article 5.
Section 5.13 ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 5 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 5 in addition to or in place of the Trustee; provided, however,
that Sections 5.6, 5.10 and 5.12 shall not apply to the Company if it acts as
Paying Agent.
ARTICLE VI
COVENANTS
Section 6.1 PAYMENT OF SECURITIES.
The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities and this
Indenture. An installment of
27
principal or interest shall be considered paid on the date it is due if the
Paying Agent (other than the Company or any Affiliate thereof) holds on that
date money, deposited by the Company or an Affiliate thereof, sufficient to pay
the installment. The Company shall pay interest on overdue principal at the
rate borne by the Securities per annum; it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Section 6.2 SEC REPORTS.
The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and within 15 days after it files them with the SEC, the Company
shall file copies of all such reports, information and other documents with the
Trustee. The Company will cause any quarterly and annual reports which it mails
to its shareholders to be mailed to the Holders of the Securities.
In the event the Company is at any time not subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will
prepare, for the first three quarters of each fiscal year, quarterly financial
statements substantially equivalent to the financial statements required to be
included in a report on Form 10-Q under the Exchange Act. The Company will also
prepare, on an annual basis, complete audited consolidated financial statements,
including, but not limited to, a balance sheet, a statement of operations, a
statement of cash flows and all appropriate notes. All such financial
statements will be prepared in accordance with generally accepted accounting
principles. The Company will cause a copy of such financial statements to be
filed with the Trustee and mailed to the Holders of the Securities within 50
days after the end of each of the first three quarters of each fiscal year and
within 95 days after the close of each fiscal year. The Company will also
comply with the other provisions of TIA Section 314(a).
Section 6.3 LIQUIDATION.
Subject to the provisions of Article 5, so far as they may be
applicable hereto, the Board of Directors or the shareholders of the Company may
not adopt a plan of liquidation, which plan provides for, contemplates or the
effectuation of which is preceded by (a) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company otherwise
than substantially as an entirety (any such sale, lease, conveyance or other
disposition substantially as an entirety being governed by Article 7) and (b)
the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and of the remaining assets of the
Company to the holders of the capital stock of the Company, unless the Company
shall in connection with the adoption of such plan make provision for, or agree
that prior to making any liquidating distributions it will make provision for,
the satisfaction of the Company's obligations hereunder and under the Securities
as to the payment of the principal and interest thereof. The Company shall be
deemed to make provision for such payments only if (1) the Company irrevocably
deposits in trust with the Trustee money or U.S. Government Obligations maturing
as to principal and interest in such amounts and at such times as are
sufficient, without consideration of any reinvestment of such interest, to pay
the principal of and interest on the Securities then outstanding to maturity and
to pay all other sums payable by it
28
hereunder or (2) there is an express assumption of the due and punctual payment
of the Company's obligations hereunder and under the Securities and the
performance and observance of all covenants and conditions to be performed by
the Company hereunder, by the execution and delivery of a supplemental indenture
in form satisfactory to the Trustee by a person who acquires, or will acquire
(otherwise than pursuant to a lease), a portion of the assets of the Company,
and which person will have assets (immediately after the acquisition) and
aggregate earnings (for such person's four full fiscal quarters immediately
preceding the acquisition) equal to not less than the assets of the Company
(immediately preceding such acquisition) and the aggregate earnings of the
Company (for its four full fiscal quarters immediately preceding the
acquisition), respectively, and which is a corporation organized under the laws
of the United States, any State thereof or the District of Columbia; provided,
however, that the Company shall not make any liquidating distribution until
after the Company (x) has certified to the Trustee with an Officers' Certificate
at least five days prior to the making of any liquidating distribution that it
has complied with the provisions of this Section 6.3 and (y) delivered to the
Trustee an Opinion of Counsel that all conditions precedent to such liquidation
have been complied with.
Section 6.4 COMPLIANCE CERTIFICATES.
The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate as to the signer's
knowledge of the Company's compliance with all conditions and covenants on its
part contained in this Indenture and stating whether or not the signer knows of
any default or Event of Default. If such signer knows of such a default or
Event of Default, the Officers' Certificate shall describe the default or Event
of Default and the efforts to remedy the same. For the purposes of this Section
6.4, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture. The
Officers' Certificate need not comply with Section 12.4 hereof.
Section 6.5 NOTICE OF DEFAULTS.
In the event (a) that indebtedness of the Company in an aggregate
amount in excess of $5,000,000 is declared due and payable before its maturity
because of the occurrence of any default under such indebtedness, or (b) of the
occurrence of any event which entitles the holder or holders of such
indebtedness to declare such indebtedness due and payable before its maturity
and with respect to which any applicable grace period has lapsed or expired, the
Company will promptly give written notice to the Trustee of such declaration or
event.
Section 6.6 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
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ARTICLE VII
SUCCESSOR CORPORATION
Section 7.1 WHEN COMPANY MAY MERGE, ETC.
The Company shall not consolidate with or merge with or into, or
transfer all or substantially all of its assets to, any person unless:
(a) either the Company shall be the resulting or surviving entity or
such person is a corporation organized and existing under the laws of the United
States, a State thereof or the District of Columbia, and such person expressly
assumes by supplemental indenture executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture (in which case all such obligations of the Company
shall terminate); and
(b) immediately before and immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company as a result of such transaction as having been incurred by the Company
at the time of such transaction, no default or Event of Default shall have
occurred and be continuing.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officers' Certificate and an Opinion of Counsel, each of which
shall comply with Section 12.4 and shall state that such consolidation, merger
or transfer and such supplemental indenture comply with this Article 7 and that
all conditions precedent herein provided for relating to such transaction have
been complied with; provided, however, that such Opinion of Counsel shall not
address Events of Default, except where such counsel has actual knowledge of any
such Event of Default.
Section 7.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 7.1,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named as the
Company herein.
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ARTICLE VIII
DEFAULT AND REMEDIES
Section 8.1 EVENTS OF DEFAULT.
An "Event of Default" shall occur if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable and the
default continues for a period of 10 business days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity,
upon redemption or otherwise;
(3) the Company fails to comply with any of its other agreements
contained in the Securities or this Indenture and the
default continues for the period and after the notice
specified below;
(4) a default shall occur under any bond, debenture, note or
other evidence of Indebtedness for money borrowed by the
Company or any Restricted Subsidiary, which default shall
have resulted in such Indebtedness becoming or being
declared payable prior to the date on which it would
otherwise have been due and payable (provided that the
aggregate amount of such Indebtedness subject to
acceleration exceeds $5 million), without such Indebtedness
having been discharged, such acceleration having been
rescinded or annulled or there having been deposited in
trust a sum of money sufficient to discharge in full such
Indebtedness;
(5) the Company or any of its Subsidiaries fails to pay any
principal or interest when due under any bond, debenture,
note or other evidence of Indebtedness for money (whether by
scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after
the applicable grace period, if any, specified in the
agreement or instrument evidencing or governing such
Indebtedness, has expired (provided that the amount of such
Indebtedness, and any interest or premium thereon, exceeds
$5 million);
(6) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
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(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 that:
(A) is for relief against the Company in an involuntary
case or proceeding;
(B) appoints a Custodian of the Company or for all or
substantially all of its property; or
(C) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in
effect for 60 days.
The term "Bankruptcy Law" means Title 11 of the United States Code or
any similar federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A default under clause (3) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in principal amount
of the Securities then outstanding notify the Company and the Trustee, of the
default, and the Company does not cure the default within 30 days after receipt
of such notice. The notice given pursuant to this Section 8.1 must specify the
default, demand that it be remedied and state that the notice is a "Notice of
Default." When a default is cured, it ceases.
Subject to the provisions of Sections 9.1 and 9.2, the Trustee shall
not be charged with knowledge of any Event of Default unless written notice
thereof shall have been given to a Trust Officer at the Corporate Trust Office
of the Trustee by the Company, the Paying Agent, any Holder or any agent of any
Holder.
Section 8.2 ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (5) or (6) of Section 8.1) occurs and is continuing, the Trustee may, by
notice to the Company, or the Holders of at least 25% in principal amount of the
Securities then outstanding may, by notice to the Company and the Trustee, and
the Trustee shall, upon the request of such Holders, declare all unpaid
principal of and accrued interest to the date of acceleration on the Securities
then outstanding (if not then due and payable) to be due and payable upon any
such declaration, and
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the same shall become and be immediately due and payable. If an Event of
Default specified in clause (5) or (6) of Section 8.1 occurs, all unpaid
principal of and accrued interest on the Securities then outstanding shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholder. The Holders of a majority
in principal amount of the Securities then outstanding by notice to the Trustee
may rescind an acceleration and its consequences if (a) all existing Events of
Default, other than the nonpayment of the principal of and accrued interest on
the Securities which has become due solely by such declaration of acceleration,
have been cured or waived; (b) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; (c) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction; and (d) all payments due to the Trustee and
any predecessor Trustee under Section 9.7 have been made. Anything herein
contained to the contrary notwithstanding, in the event of any acceleration
pursuant to this Section 8.2, the Company shall not be obligated to pay any
premium which it would have had to pay if it had then elected to redeem the
Securities pursuant to paragraph 5 of the Securities, except in the case of any
Event of Default occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium which it would have had to pay if it had then elected to
redeem the Securities pursuant to paragraph 5 of the Securities, in which case
an equivalent premium shall also become and be immediately due and payable to
the extent permitted by law.
Section 8.3 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 the principal of 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 to the
extent permitted by law.
Section 8.4 WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 8.7 and 11.2, the Holders of a majority in
principal amount of the Securities then outstanding by notice to the Trustee may
waive an existing default or Event of Default and its consequence, except a
default in the payment of the principal of or interest on any Security as
specified in clauses (1) and (2) of Section 8.1. When a default or Event of
Default is waived, it is cured and ceases.
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Section 8.5 CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the Securities then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee 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 another Securityholder or the Trustee, or that may
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
Section 8.6 LIMITATIONS ON SUITS.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities (except actions for payment of overdue principal or
interest or for the conversion of the Securities pursuant to Article 4) unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Securities
then outstanding.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
Section 8.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of the principal of 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.
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Section 8.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in the payment of principal or interest
specified in clause (1) or (2) of Section 8.1 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or another obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
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 8.9 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
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor on 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, and 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
Securityholders, 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 9.7, and to the
extent that such payment of the reasonable compensation, expenses, disbursements
and advances in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
Securityholders may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to, or, on behalf of any Securityholder, to authorize, accept or
adopt 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
proceeding.
Section 8.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 8, it shall
pay out the money in the following order:
First, to the Trustee for amounts due under Section 9.7;
Second, to the holders of Senior Indebtedness to the extent required
by Article 5;
35
Third, to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Fourth, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10.
Section 8.11 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
attorneys' 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 8.11 does not apply to a suit made by the Trustee, a suit by a
Holder pursuant to Section 8.7, or a suit by Holders of more than 10% in
principal amount of the Securities then outstanding.
Section 8.12 WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE IX
TRUSTEE
Section 9.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no others; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. The
Trustee, however, shall examine any certificates and
opinions which by any provision hereof are specifically
required to be delivered to the Trustee to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of subsection (b)
of this Section 9.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 8.5.
(d) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability, expense or fee.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b), (c) and (d) of this Section 9.1.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 9.2 RIGHTS OF TRUSTEE.
Subject to Section 9.1:
(a) The Trustee may rely conclusively on 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.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 12.4(b). The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Certificate or Opinion.
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(c) The Trustee may act through its agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) 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.
(e) The Trustee may consult with counsel, and the advice or opinion
of such counsel as to matters of law shall be full and complete authorization
and protection in respect of any such action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
Section 9.3 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 an
affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 9.10 and 9.11.
Section 9.4 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, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
Section 9.5 NOTICE OF DEFAULT OR EVENTS OF DEFAULT.
If a default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the default or Event of Default within 90 days after it occurs. Except in the
case of a default or an Event of Default in payment of the principal of 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
notice is in the interest of Securityholders.
Section 9.6 REPORTS BY TRUSTEE TO HOLDERS.
If such report is required by TIA Section 313, within 60 days after
each April 15, beginning with the April 15 following the date of this Indenture,
the Trustee shall mail to each Securityholder a brief report dated as of such
April 15 that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b)(2) and (c).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed. The Company shall notify the
Trustee whenever the Securities become listed on any stock exchange and any
changes in the stock exchanges on which the Securities are listed.
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Section 9.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time 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 the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense (including reasonable legal fees and
expenses) incurred by it in connection with its duties under this Indenture or
any action or failure to act as authorized or within the discretion or rights or
powers conferred upon the Trustee hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. The Trustee shall have the option of undertaking the defense of such
claims; provided, however, that if the Trustee opts not to defend itself, the
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement
without its written consent, which shall not be unreasonably withheld.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it resulting from its
negligence or bad faith.
To secure the Company's payment obligations in this Section 9.7, the
Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of and interest on
particular Securities. The obligations of the Company under this Section 9.7 to
compensate or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that of
the Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities. The obligations of the Company under this Section 9.7 shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (5) or (6) of Section 8.1 occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 9.8 REPLACEMENT OF TRUSTEE.
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, with the Company's written consent,
appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 9.10;
39
(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
(4) the Trustee 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 10% 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 9.10, 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 transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities that the retiring Trustee may have incurred while acting as Trustee)
hereunder, 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. A successor Trustee shall mail
notice of its succession to each Securityholder.
A retiring Trustee shall not be liable for the acts or omissions of
any successor Trustee after its succession.
Notwithstanding replacement of the Trustee pursuant to this Section
9.8, the Company's obligations under Section 9.7 shall continue for the benefit
of the retiring Trustee.
Section 9.9 SUCCESSOR TRUSTEE BY MERGER, 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 resulting, surviving or transferee corporation, without any
further act, shall be the successor Trustee, provided such transferee
corporation shall qualify and be eligible under Section 9.10.
Section 9.10 ELIGIBILITY; DISQUALIFICATION.
The Trustee shall always satisfy the requirements of paragraphs (1),
(2) and (5) of TIA Section 310(a). If at any time the Trustee shall cease to
satisfy any such requirements, it shall resign immediately in the manner and
with the effect specified in this Article 9. The Trustee shall be subject to
the provisions of TIA Section 310(b). Nothing herein shall prevent
40
the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).
Section 9.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE
Section 10.1 TERMINATION OF COMPANY'S OBLIGATIONS.
Subject to applicable rules of any stock exchange or system on which
the Securities are listed or quoted, the Company may terminate all of its
obligations under the Securities and this Indenture (excepting those obligations
referred to in the immediately succeeding paragraph) if all Securities
previously authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid or Securities for whose payment
money has theretofore been held in trust and thereafter repaid to the Company,
as provided in Section 10.3) have been delivered to the Trustee or the Paying
Agent for cancellation and the Company has paid all sums payable by it
hereunder, or if the Company irrevocably deposits in trust with the Trustee or
the Paying Agent, pursuant to a written trust agreement satisfactory to the
Trustee, money or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as are sufficient, without
consideration of any reinvestment of such interest, to pay the principal of and
interest on the Securities then outstanding to maturity or to the date fixed for
redemption and to pay all other sums payable by it hereunder. The Company may
make an irrevocable deposit pursuant to this Section 10.1 only if at such time
it is not prohibited from doing so under the provisions of Article 5 and the
Company shall have delivered to the Trustee and any such Paying Agent an
Officers' Certificate and an Opinion of Counsel to that effect and that all
other conditions to such deposit have been complied with.
The Company's obligations in paragraph 13 of the Securities and in
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.11, 2.12, 6.1, 9.7, 9.8, 10.4 and Article 4
shall survive until the Securities are no longer outstanding. Thereafter, the
Company's obligations in such paragraph 13 and in Section 9.7 shall survive.
After such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture, except for those surviving obligations specified
above.
"U.S. Government Obligations" means direct non-callable obligations
of, or non-callable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States is pledged.
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Section 10.2 APPLICATION OF TRUST MONEY.
The Trustee or the Paying Agent shall hold in trust, for the benefit
of the Holders, money or U.S. Government Obligations deposited with it pursuant
to Section 10.1, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Securities. Money and U.S. Government
Obligations so held in trust shall not be subject to the subordination
provisions of Article 5.
Section 10.3 REPAYMENT TO COMPANY.
Subject to Section 10.1, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S. Government
Obligations held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years after a right to such money has matured; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such payment, may at the expense of the Company cause to be published once
in a newspaper of general circulation in The City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and that
after a date specified therein, which shall be at least 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company. After payment to the Company, Securityholders
entitled to money must look to the Company for payment as general creditors
unless otherwise prohibited by law.
Section 10.4 REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 10.1 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 10.1 until such time as the Trustee or the Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
10.1; provided, however, that if the Company has made any payment of the
principal of or interest on any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive any such payment from the money or U.S. Government
Obligations held by the Trustee or the Paying Agent.
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ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.1 WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.11, 6.3 and 7.1;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not adversely affect the rights of any Securityholder;
(d) to comply with the provisions of the TIA; or
(e) to appoint a successor Trustee.
Section 11.2 WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to any Securityholder with the written consent of
the Holders of a majority in principal amount of the Securities then
outstanding. 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 11.4, without the written consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 8.4, may not:
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or premium on or change the fixed
maturity of any Security or alter the redemption provisions
with respect thereto in a manner adverse to the Holder
thereof;
(4) alter the conversion provisions with respect to any Security
in a manner adverse to the Holder thereof;
(5) waive a default in the payment of the principal of or
premium or interest on any Security;
43
(6) make any changes in Section 8.4 or 8.7 or in this sentence;
(7) modify the provisions of Article 5 in a manner adverse to
the Holders; or
(8) make any Security payable in money other than that stated in
the Security.
It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 11.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
An amendment under this Section 11.2 may not make any change that
adversely affects the rights under Article 5 of any holder of an issue of Senior
Indebtedness unless the holders of that issue, pursuant to its terms, consent to
the change.
Section 11.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as in effect at the date of such amendment or
supplement.
Section 11.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his or her Security or portion of a Security if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (8) of Section 11.2. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Xxxxxx's Security.
Section 11.5 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may
44
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 determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
Section 11.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article 11 if the amendment or supplement does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, in its sole discretion, but need not sign it. In signing or
refusing to sign such amendment or supplement, the Trustee shall be entitled to
receive and, subject to Section 9.1, shall be fully protected in relying upon,
an opinion of Counsel stating that such amendment or supplement is authorized or
permitted by this Indenture. The Company may not sign an amendment or
supplement until the Board of Directors approves it.
ARTICLE XII
MISCELLANEOUS
Section 12.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall control.
Section 12.2 NOTICES.
Any notice, request or communication shall be given in writing and
delivered in person or mailed by first-class mail, postage prepaid, addressed as
follows:
If to the Company:
If to the Trustee:
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
by first-class mail to him or her at his or her address shown on the register
kept by the Registrar.
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
45
communication to a Securityholder is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
Section 12.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
Section 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
(a) Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
at the request of the Trustee:
(1) an Officer's Certificate stating that, in the opinion of the
signers, all conditions precedent (including any covenants,
compliance with which constitutes a condition precedent), if
any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent (including any
covenants, compliance with which constitutes a condition
precedent) have been complied with.
(b) Each Officers' Certificate and opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture (other
than annual certificates provided pursuant to Section 6.4) 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 or she
has made such examination or investigation as is necessary
to enable him or her to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an
Opinion of Counsel
46
may rely on an Officers' Certificate or certificates of
public officials.
Section 12.5 RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS.
The Company (or, in the event deposits have been made pursuant to
Section 6.3 or 10.1, the Trustee) may set a record date for purposes of
determining the identity of Securityholders entitled to vote or consent to any
action by vote or consent authorized or permitted under this Indenture, which
record date shall be the later of ten days prior to the first solicitation of
such vote or consent or the date of the most recent list of Securityholders
furnished to the Trustee pursuant to Section 2.5 prior to such solicitation.
Notwithstanding the provisions of Section 11.4, if a record date is fixed, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Holders after such record date.
Section 12.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR, CONVERSION
AGENT.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar, Paying Agent or Conversion Agent may make reasonable
rules for its functions.
Section 12.7 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, Sunday or a day on which state or
federally chartered banking institutions in New York, New York (or such other
city and state where the Trustee's corporate trust operations are then 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 12.8 GOVERNING LAW.
Except as specifically provided in Section 3.8(a), the laws of the
State of New York shall govern this Indenture and the Securities without regard
to principles of conflicts of law.
Section 12.9 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 12.10 NO RECOURSE AGAINST OTHERS.
All liability described in paragraph 18 of the Securities of any
director, officer, employee or shareholder, as such, of the Company is waived
and released.
47
Section 12.11 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 12.12 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 12.13 SEPARABILITY.
In case any provisions in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 12.14 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.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
as of ________________________.
AMERICAN SKIING COMPANY
By:
-------------------------------
Name:
Title:
{SEAL}
Attest:
By:
-------------------------------
Name:
Title:
48
[TRUSTEE]
By:
-------------------------------
Name:
Title:
{SEAL}
Attest:
By:
-------------------------------
Name:
Title:
49
EXHIBIT A-1
[FORM OF FACE OF SECURITY]
10 1/2% Convertible Subordinated Debentures due _______(1)
AMERICAN SKIING COMPANY
INCORPORATED UNDER THE
LAWS OF THE STATE OF MAINE
CUSIP: __________ R-__________
10 1/2% Repriced Convertible Subordinated Debentures due _______(2)
American Skiing Company promises to pay to _______________, or
registered assigns, the principal sum of __________________ Dollars on
_______(2).
Interest Payment Dates (subject to paragraph 1 appearing on the other side of
this Debenture): January 15, April 15, July 15 and October 15
Record Dates (subject to paragraph 1 appearing on the other side of this
Debenture): December 30, March 30, June 30, and September 30
This Debenture is convertible as specified on the other side of this
Debenture. Additional provisions of this Debenture are set forth on the other
side of this Debenture.
__________________
1. Insert five years from date of issuance of the 10 1/2% Repriced Convertible
Preferred Stock.
2. Insert fifth anniversary of the date of issuance of the 10 1/2% Repriced
Convertible Preferred Stock.
50
IN WITNESS WHEREOF, American Skiing Company has caused this instrument
to be duly executed in its corporate name and the facsimile of its corporate
seal to be affixed hereunto or imprinted hereon.
AMERICAN SKIING COMPANY
By:
-------------------------------
President and Chief Executive Officer
[SEAL]
Attest:
Dated:
Trustee's Certificate of Authentication:
This is one of the Securities referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By:
-------------------------------
Authorized Signatory
1
[FORM OF REVERSE SIDE OF SECURITY]
AMERICAN SKIING COMPANY
10 1/2% Repriced Convertible Subordinated Debentures due _______(1)
1. INTEREST.
American Skiing Company, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Debenture at the rate
per annum shown above. The Company shall accrue and compound quarterly on
January 15, April 15, July 15 and October 15 of each year, commencing
_____________;(2) provided that (i) all accrued interest shall be payable in
cash on ___________(2) or if earlier upon the Redemption Date. Interest on the
Debentures shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of first issuance of the
Debentures under the Indenture (as defined below). The Company at its option
may pay accrued and unpaid interest in cash on any interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT.
Subject to the provisions of paragraph 1, above, the Company shall
pay interest on this Debenture (except defaulted interest) to the person who
is the Holder of this Debenture at the close of business on the December 30,
March 30, June 30 or September 30 next preceding the related interest payment
date. The Holder must surrender this Debenture to the Paying Agent to collect
payment of principal. The Company will pay principal 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 may, however, pay principal and
interest by its check or wire payable in such money. It may mail an interest
check to the Holder's registered address.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT.
Initially, [Insert Name of Trustee] (the "Trustee") will act as Paying
Agent, Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to the Holder. The Company or any
of its Subsidiaries may act as Paying Agent, Registrar or Conversion Agent.
___________________
1. Insert five years from date of issuance of 10 1/2% Repriced Convertible
Preferred Stock.
2. Insert first quarterly payment date after issuance.
2
4. INDENTURE, LIMITATIONS.
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its 10 1/2% Convertible Subordinated Debentures due
_______(1) (the "Debentures"), issued under an Indenture dated as of [insert
date of issuance] (the "Indenture"), between the Company and the Trustee. The
terms of this Debenture include those stated in the Indenture and those required
by or made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended, and as in effect on the date of the Indenture. This Debenture
is subject to all such terms and the Holder of this Debenture is referred to the
Indenture and said Act for a statement of them.
The Debentures are subordinated unsecured obligations of the Company
limited to up to $40,000,000(2) aggregate principal amount, subject to Section
2.2 of the Indenture. The Indenture does not limit other debt of the Company,
secured or unsecured, including Senior Indebtedness.
5. OPTIONAL REDEMPTION.
The Debentures are subject to redemption, at any time as a whole or in
part, at the election of the Company; provided that the Debentures may not be so
redeemed prior to [insert the fifth anniversary of date of issuance of the 10
1/2% Repriced Convertible Preferred Stock] unless the closing price per share of
the Common Stock for 45 consecutive trading days ending no more than 30 calendar
days prior to the date notice of redemption is first mailed is at least 140% of
the Adjusted IPO Price then in effect. The Redemption Price shall equal 100% of
the principal amount thereof, in each case together with accrued interest
through the Redemption Date.
6. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first-class mail at least 90
days before the Redemption Date to each Holder of Debentures to be redeemed at
his or her registered address. Debentures in denominations larger than $1,000
may be redeemed in part, but only in whole multiples of $1,000. On and after
the Redemption Date, subject to the deposit with the Paying Agent of funds
sufficient to pay the Redemption Price interest ceases to accrue on Debentures
or portions of them called for redemption.
___________________
1. Insert five years from date of issuance of 10 1/2% Repriced Convertible
Preferred Stock.
2. Plus accrued dividends on the 10 1/2% Repriced Convertible Preferred Stock.
3
7. CONVERSION.
A Holder of a Debenture may convert such Debenture into shares of
Common Stock of the Company at any time prior to maturity; provided, however,
that if the Debenture is called for redemption, the conversion right will
terminate at the close of business on the redemption date for such Debenture
(unless the Company shall default in making the redemption payment when due, in
which case the conversion right shall terminate at the close of business on the
date such default is cured and such Debenture is redeemed); provided, further,
that if the Holder of a Debenture presents such Debenture for redemption prior
to the close of business on the redemption date for such Debenture, the right of
conversion shall terminate upon presentation of the Debenture to the Trustee
(unless the Company shall default in making the redemption payment when due, in
which case the conversion right shall terminate on the close of business on the
date such default is cured and such Debenture is redeemed). The initial
conversion price is ________* per share, subject to adjustment under certain
circumstances. The number of shares issuable upon conversion of a Debenture is
determined by dividing the principal amount converted by the conversion price in
effect on the Conversion Date. Upon conversion any accrued and unpaid interest
on the Securities shall be paid to the Holder thereof, at the option of the
Company, either (i) in freely tradeable shares of Common Stock at the Conversion
Price or (ii) in cash. No fractional shares will be issued upon conversion; in
lieu thereof, an amount will be paid in cash based upon the closing sale price
of the Common Stock on the last Trading Day prior to the Conversion Date.
To convert a Debenture, a Holder must (a) complete and manually sign
the conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Debenture to the Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Registrar or
the Conversion Agent, and (d) pay any transfer or similar tax, if required. If
a Holder surrenders a Debenture for conversion after the close of business on
the record date for the payment of an installment of interest and before the
close of business on the related interest payment date then, notwithstanding
such conversion, the interest payable on such interest payment date shall be
paid to the Holder of such Debenture on such record date. In such event, the
Debenture must be accompanied by payment of an amount equal to the interest
payable on such interest payment date on the principal amount of the Debenture
or portion thereof then converted. A Holder may convert a portion of a
Debenture equal to $1,000 or any integral multiple thereof.
8. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such Securities at an amount not less than the
Redemption Price, together with accrued interest, if any, to, but not including,
the Redemption Date, by one or more investment bankers or other purchasers who
may agree with the Company to purchase such Securities from the Holders, to
_________________
* Insert the then applicable conversion price for the 10 1/2% Repriced
Convertible Preferred Stock.
4
convert them into Common Stock of the Company and to make payment for such
Securities to the Paying Agent in Trust for such Holders.
9. SUBORDINATION.
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Company. Any
Holder by accepting this Xxxxxxxxx agrees to and shall be bound by such
subordination provisions and authorizes the Trustee to give them effect. Such
subordination provisions include certain rights of the holders of Senior
Indebtedness to block the payment of principal and interest on the Debentures
during the pendency of certain defaults in respect of such Senior Indebtedness.
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 terms of any instrument relating to the
Senior Indebtedness or any extension or renewal of the Senior Indebtedness.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Debentures are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. A Holder may register the transfer
of or exchange Debentures 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 or other governmental charges that may
be imposed by law or permitted by the Indenture.
11. PERSONS DEEMED OWNERS.
The Holder of a Debenture may be treated as the owner of it for all
purposes.
12. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent will pay the money back to the
Company at its written request. After that, Holders entitled to money must look
to the Company or payment.
13. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented with the consent of the Holders of a majority in
principal amount of the Debentures then outstanding and any past default or
compliance with any provision may be
5
waived in a particular instance with the consent of the Holders of a majority in
principal amount of the Debentures then outstanding. Without the consent of or
notice to any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Debentures to, among other things, provide for uncertificated
Debentures in addition to or in place of certificated Debentures, or to cure any
ambiguity, defect or inconsistency or make any other change that does not
adversely affect the rights of any Holder.
14. SUCCESSOR CORPORATION.
When a successor corporation assumes all the obligations of its
predecessor under the Debentures and the Indenture in accordance with the terms
and conditions of the Indenture, the predecessor corporation will be released
from those obligations.
15. DEFAULTS AND REMEDIES.
An Event of Default is: default for 10 business days in payment of
interest on the Debentures; default in payment of principal on the Debentures
when due; failure by the Company for 30 days after notice to it to comply with
any of its other agreements contained in the Indenture or the Debentures;
certain events of bankruptcy, insolvency or reorganization of the Company; and
defaults in respect of certain other indebtedness. If an Event of Default
(other than as a result of certain events of bankruptcy, insolvency or
reorganization) occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the Debentures then outstanding may declare all
unpaid principal of and accrued interest to the date of acceleration on the
Debentures then outstanding to be due and payable immediately, all as and to the
extent provided in the Indenture. If an Event of Default occurs as a result of
certain events of insolvency or reorganization, unpaid principal of and accrued
interest on the Debentures then outstanding shall become due and payable without
any declaration or other act on the part of the Trustee, or all as and to the
extent provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Debentures. Subject
to certain limitations, Holders of a majority in principal amount of the
Debentures then outstanding may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders 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 default.
16. TRUSTEE DEALINGS WITH THE COMPANY.
[Insert name of Trustee], 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 an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
6
17. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Debentures or the Indenture nor for any claim based on, in respect of or by
reason of such obligations or their creation. The Holder of this Debenture by
accepting this Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Debenture.
18. DISCHARGE PRIOR TO MATURITY.
If the Company deposits with the Trustee or the Paying Agent money or
U.S. Government Obligations sufficient to pay the principal of and interest on
the Debentures to maturity, the Company will be discharged from the Indenture
except for certain sections thereof.
19. AUTHENTICATION.
This Debenture shall not be valid until the Trustee or an
authenticating agent signs the certificate of authentication on the other side
of this Debenture.
20. ABBREVIATIONS AND DEFINITIONS.
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
All capitalized terms used in this Debenture and not specifically
defined herein are defined in the Indenture and are used herein as so defined.
21. INDENTURE TO CONTROL.
In the case of any conflict between the provisions of this Debenture
and the Indenture, the provisions of the Indenture shall control.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: [Insert name
and address].
7
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
I or we assign and transfer this Debenture to
___________________________________________________________
___________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
___________________________________________________________
agent to transfer this Debenture on the books of the
Company. The Agent may substitute another to act for him or
her.
Date: ____________________________________________________
Your signature: ___________________________________________
(Sign exactly as your name appears on the
other side of this Debenture)
___________________________________________________________
(Sign exactly as your name appears on the other side of this
Debenture)
**/Signature guaranteed by:________________________________________
By: ___________________________________
___________________
** The signature must be guaranteed by a bank, a trust company or a member
firm of the New York Stock Exchange.
8
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Company, check the box:
/ /
To convert only part of this Debenture, state the amount to be converted:
$_________________
If you want the stock certificate made out in another person's name, fill in the
form below:
___________________________________________________________
___________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
(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 Debenture)
___________________________________________________________
(Sign exactly as your name appears on the
other side of this Debenture)
*/Signature guaranteed by: _______________________________
By: _______________________________________________________
_______________
* The signature must be guaranteed by a bank, a trust company or a member
firm of the New York Stock Exchange.
9
