EXHIBIT 4.1.1
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LEASING SOLUTIONS, INC.
AND
BANKERS TRUST COMPANY,
AS TRUSTEE
Convertible Subordinated Notes due 2003
INDENTURE
Dated as of [ ] 1996
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS...................................................................... 1
Section 1.1 Definitions................................................................. 1
Affiliate........................................................................ 1
Agent............................................................................ 1
Board of Directors............................................................... 1
Change of Control................................................................ 1
Commission....................................................................... 2
Common Stock..................................................................... 2
Company.......................................................................... 2
consolidated subsidiary.......................................................... 2
Convertible Subordinated Notes................................................... 2
Conversion Price................................................................. 2
Default.......................................................................... 3
Designated Senior Debt........................................................... 3
Exchange Act..................................................................... 3
GAAP............................................................................. 3
Indebtedness..................................................................... 3
Indenture........................................................................ 4
Interest Payment Date............................................................ 4
Issue Date....................................................................... 4
Material Subsidiary.............................................................. 4
Maturity Date.................................................................... 4
Obligations...................................................................... 4
Officer.......................................................................... 4
Officers' Certificate............................................................ 4
Opinion of Counsel............................................................... 5
person........................................................................... 5
Redemption Date.................................................................. 5
Redemption Price................................................................. 5
Regular Record Date.............................................................. 5
Representative................................................................... 5
Securities Act................................................................... 5
Senior Debt...................................................................... 5
subsidiary....................................................................... 6
TIA.............................................................................. 6
Trustee.......................................................................... 6
Trust Officer.................................................................... 6
U.S. Government Obligations...................................................... 6
Section 1.2 Other Definitions........................................................... 6
Section 1.3 Incorporation by Reference of Trust Indenture Act........................... 7
Section 1.4 Rules of Construction....................................................... 7
i.
ARTICLE II THE CONVERTIBLE SUBORDINATED NOTES............................................... 8
Section 2.1 Form and Dating............................................................. 8
Section 2.2 Execution and Authentication................................................ 8
Section 2.3 Registrar, Paying Agent and Conversion Agent................................ 9
Section 2.4 Paying Agent to Hold Money in Trust......................................... 9
Section 2.5 Holder Lists................................................................ 10
Section 2.6 Transfer and Exchange....................................................... 10
Section 2.7 Replacement Convertible Subordinated Notes.................................. 11
Section 2.8 Outstanding Convertible Subordinated Notes.................................. 11
Section 2.9 When Treasury Convertible Subordinated Notes
Disregarded................................................................. 12
Section 2.10 Temporary Convertible Subordinated Notes.................................... 12
Section 2.11 Cancellation................................................................ 12
Section 2.12 Defaulted Interest.......................................................... 13
Section 2.13 Cusip Number................................................................ 13
ARTICLE III REDEMPTION....................................................................... 13
Section 3.1 Notices to Trustee.......................................................... 13
Section 3.2 Selection of Convertible Subordinated Notes to be
Redeemed.................................................................... 13
Section 3.3 Notice of Redemption........................................................ 14
Section 3.4 Effect of Notice of Redemption.............................................. 15
Section 3.5 Deposit of Redemption Price................................................. 15
Section 3.6 Convertible Subordinated Notes Redeemed in Part............................. 15
Section 3.7 Conversion Arrangement On Call For Redemption............................... 16
ARTICLE IV COVENANTS........................................................................ 16
Section 4.1 Payment of Convertible Subordinated Notes................................... 16
Section 4.2 Commission Reports.......................................................... 17
Section 4.3 Compliance Certificate...................................................... 17
Section 4.4 Maintenance of Office or Agency............................................. 17
Section 4.5 Continued Existence......................................................... 18
Section 4.6 Repurchase Upon a Change of Control......................................... 18
Section 4.7 Appointments to Fill Vacancies in Trustee's Office.......................... 19
Section 4.8 Stay, Extension and Usury Laws.............................................. 19
ARTICLE V SUCCESSORS....................................................................... 20
Section 5.1 When the Company May Merge, Etc............................................. 20
Section 5.2 Successor Corporation Substituted........................................... 21
Section 5.3 Purchase Option on Change of Control........................................ 21
ARTICLE VI DEFAULTS AND REMEDIES............................................................ 21
Section 6.1 Events of Default........................................................... 21
Section 6.2 Acceleration................................................................ 23
ii.
Section 6.3 Other Remedies.............................................................. 23
Section 6.4 Waiver of Past Defaults..................................................... 24
Section 6.5 Control by Majority......................................................... 24
Section 6.6 Limitation on Suits......................................................... 24
Section 6.7 Rights of Holders to Receive Payment........................................ 25
Section 6.8 Collection Suit by Trustee.................................................. 25
Section 6.9 Trustee May File Proofs of Claim............................................ 25
Section 6.10 Priorities.................................................................. 25
Section 6.11 Undertaking for Costs....................................................... 26
ARTICLE VII THE TRUSTEE...................................................................... 26
Section 7.1 Duties of the Trustee....................................................... 26
Section 7.2 Rights of the Trustee....................................................... 27
Section 7.3 Individual Rights of the Trustee............................................ 29
Section 7.4 Trustee's Disclaimer........................................................ 29
Section 7.5 Notice of Defaults.......................................................... 30
Section 7.6 Reports by the Trustee to Holders........................................... 30
Section 7.7 Compensation and Indemnity.................................................. 30
Section 7.8 Replacement of the Trustee.................................................. 31
Section 7.9 Successor Trustee by Merger, Etc............................................ 32
Section 7.10 Eligibility, Disqualification............................................... 32
Section 7.11 Preferential Collection of Claims Against Company........................... 33
ARTICLE VIII SATISFACTION AND DISCHARGE OF INDENTURE.......................................... 33
Section 8.1 Discharge of Indenture...................................................... 33
Section 8.2 Deposited Monies to be Held in Trust by Trustee............................. 33
Section 8.3 Paying Agent to Repay Monies Held........................................... 34
Section 8.4 Return of Unclaimed Monies.................................................. 34
Section 8.5 Reinstatement............................................................... 34
ARTICLE IX AMENDMENTS....................................................................... 34
Section 9.1 Without the Consent of Holders.............................................. 34
Section 9.2 With the Consent of Holders................................................. 35
Section 9.3 Compliance With The Trust Indenture Act..................................... 37
Section 9.4 Revocation and Effect of Consents........................................... 37
Section 9.5 Notation On Or Exchange Of Convertible Subordinated
Notes....................................................................... 37
Section 9.6 Trustee Protected........................................................... 38
ARTICLE X GENERAL PROVISIONS............................................................... 38
Section 10.1 Trust Indenture Act Controls................................................ 38
Section 10.2 Notices..................................................................... 38
Section 10.3 Communication by Holders With Other Holders................................. 39
Section 10.4 Certificate and Opinion as to Conditions Precedent.......................... 39
iii.
Section 10.5 Statements Required in Certificate or Opinion............................... 39
Section 10.6 Rules by Trustee and Agents................................................. 40
Section 10.7 Legal Holidays.............................................................. 40
Section 10.8 No Recourse Against Others.................................................. 40
Section 10.9 Counterparts................................................................ 40
Section 10.10 Other Provisions............................................................ 41
Section 10.11 Governing Law............................................................... 41
Section 10.12 No Adverse Interpretation of Other Agreements............................... 41
Section 10.13 Successors.................................................................. 41
Section 10.14 Severability................................................................ 41
Section 10.15 Table of Contents, Headings, Etc............................................ 41
ARTICLE XI SUBORDINATION.................................................................... 42
Section 11.1 Agreement to Subordinate.................................................... 42
Section 11.2 Liquidation; Dissolution; Bankruptcy........................................ 42
Section 11.3 Default on Senior Debt and/or Designated Senior Debt........................ 42
Section 11.4 Acceleration of Convertible Subordinated Notes.............................. 43
Section 11.5 When Distribution Must Be Paid Over......................................... 44
Section 11.6 Notice by Company........................................................... 44
Section 11.7 Subrogation................................................................. 44
Section 11.8 Relative Rights............................................................. 45
Section 11.9 Subordination May Not Be Impaired By Company................................ 45
Section 11.10 Distribution or Notice to Representative.................................... 45
Section 11.11 Rights of Trustee and Paying Agent.......................................... 46
Section 11.12 Authorization to Effect Subordination....................................... 46
Section 11.13 Article Applicable to Paying Agents......................................... 46
Section 11.14 Senior Debt Entitled to Rely................................................ 46
ARTICLE XII CONVERSION OF CONVERTIBLE SUBORDINATED
NOTES............................................................................ 47
Section 12.1 Right to Convert............................................................ 47
Section 12.2 Exercise of Conversion Privilege; Issuance of Common Stock
on Conversion; No Adjustment for Interest or Dividends...................... 47
Section 12.3 Cash Payments in Lieu of Fractional Shares.................................. 49
Section 12.4 Conversion Price............................................................ 49
Section 12.5 Adjustment of Conversion Price.............................................. 49
Section 12.6 Effect of Reclassification, Consolidation, Merger or Sale................... 58
Section 12.7 Taxes on Shares Issued...................................................... 59
Section 12.8 Reservation of Shares; Shares To Be Fully Paid; Listing of
Common Stock................................................................ 59
Section 12.9 Responsibility of Trustee................................................... 60
Section 12.10 Notice to Holders Prior to Certain Actions.................................. 60
iv.
THIS INDENTURE, dated as of __________, 1996 is between Leasing
Solutions, Inc., a California corporation (the "Company"), and Bankers Trust, as
trustee (the "Trustee"). The Company has duly authorized the creation of its
[ ]% Convertible Subordinated Notes due 2003 (the "Convertible Subordinated
Notes") and to provide therefor the Company and the Trustee have duly authorized
the execution and delivery of this Indenture. Each party agrees as follows for
the benefit of the other party and for the equal and ratable benefit of the
holders from time to time of the Convertible Subordinated Notes.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
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"Affiliate" means, when used with reference to any person, any
other person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent person, as the case may be. For
the purposes of this definition, "control" when used with respect to any
specified person means the power to direct or cause the direction of management
or policies of the referent person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
coregistrar.
"Board of Directors" means the Board of Directors of the Company
or any authorized committee of the Board of Directors.
"Change of Control" means the occurrence of any of the following
events:
(i) the acquisition by any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of capital stock of the Company
entitling such person to exercise 50% or more of the total voting power of all
shares of capital stock of the Company entitled to vote generally in the
elections of directors (any shares of voting stock of which such person or group
is the beneficial owner that are not then outstanding being deemed outstanding
for purposes of calculating such percentage); or
(ii) any consolidation of the Company with, or merger of the Company
into, any other person, any merger of another person into the Company, or any
sales or transfer of all or substantially all of the assets of the Company to
another Person (other than a merger (x) which does not result in a material
reclassification, conversion, exchange or cancellation of outstanding shares of
Capital Stock, (y) which is effected solely to change the jurisdiction
1.
of incorporation of the Company and results in a reclassification, conversion or
exchange of outstanding shares of Common Stock into solely shares of common
stock, or (z) does not result in a substantial (i.e., over 50%) change in the
beneficial ownership of the Company);
(iii) the term "Capital Stock" shall mean capital stock of the Company
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, to shares of capital stock of any
other class of the Company; and
(iv) the term "beneficial owner" shall be determined in accordance with
Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the Commission pursuant to the Exchange Act.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to the
provisions of Section 12.6, however, shares issuable on conversion of
Convertible Subordinated Notes shall include only shares of the class designated
as Common Stock of the Company at the date of this Indenture or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"Company" means the party named as such above until a successor
replaces it in accordance with Article 5 and thereafter means the successor.
A "consolidated subsidiary" of any person means a subsidiary
which for financial reporting purposes is or, in accordance with GAAP, should
be, accounted for by such person as a consolidated subsidiary.
"Convertible Subordinated Notes" means the Convertible
Subordinated Notes due 2003 issued under this Indenture.
"Conversion Price" means the initial conversion price specified
in the form of Note in Section 17 of such form, as adjusted in accordance with
the provisions of Article 12.
2.
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time its corporate business shall principally
be administered; as of the date hereof, the office of the Corporate Trust Office
is located at [ ].
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Debt" means any particular Senior Debt with
respect to which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Indebtedness shall be
"Designated Senior Debt" for purposes of the Indenture (provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Debt to exercise the rights of Designated Senior Debt.)
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect from time to
time.
"Indebtedness" means, with respect to any person, all
obligations, whether or not contingent, of such person (i) (a) for borrowed
money (including, but not limited to, any indebtedness secured by a security
interest, mortgage or other lien on the assets of the Company which is (1) given
to secure all or part of the purchase price of property subject thereto, whether
given to the vendor of such property or to another, or (2) existing on property
at the time of acquisition thereof), (b) evidenced by a note, debenture, bond or
other written instrument, (c) under a lease required to be capitalized on the
balance sheet of the lessee under GAAP or under any lease or related document
(including a purchase agreement) which provides that the Company is
contractually obligated to purchase or cause a third party to purchase and
thereby guarantee a minimum residual value of the lease property to the lessor
and the obligations of the Company under such lease or related document to
purchase or to cause a third party to purchase such leased property, (d) in
respect of letters of credit, bank guarantees or bankers' acceptances (including
reimbursement obligations with respect to any of the foregoing), (e) with
respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance, charge
or adverse claim affecting title or resulting in an encumbrance to which the
property or assets of such person are subject, whether or not the obligation
secured thereby shall have been assumed by or shall otherwise be such person's
legal liability, (f) in respect of the balance of deferred and unpaid purchase
price of any property or assets, (g) under interest rate or currency swap
3.
agreements, cap, floor and collar agreements, spot and forward contracts and
similar agreements and arrangements; (ii) with respect to any obligation of
others of the type described in the preceding clause (i) or under clause (iii)
below assumed by or guaranteed in any manner by such person or in effect
guaranteed by such person through an agreement to purchase (including, without
limitation, "take or pay" and similar arrangements), contingent or otherwise
(and the obligations of such person under any such assumptions, guarantees or
other such arrangements); and (iii) any and all deferrals, renewals, extensions,
refinancings and refundings of, or amendments, modifications or supplements to,
any of the foregoing.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Interest Payment Date" means [ ] 1 and [ ] 1 of each year.
"Issue Date" means the date on which the Convertible
Subordinated Notes are originally issued under this Indenture.
"Material Subsidiary" means, at any date of determination, any
subsidiary of the Company that, together with its subsidiaries, as of the end of
such fiscal year, was the owner of more than 25% of the consolidated assets of
the Company, after eliminating any inter-company receivables of such subsidiary,
all as set forth on the most recently available consolidated financial
statements of the Company and its consolidated subsidiaries for such fiscal year
prepared in conformity with GAAP.
"Maturity Date" means _________, 2003.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, the Chief Accounting
Officer, any Executive Vice President, Senior Vice President or Vice President
(whether or not designated by a number or numbers or word or words before or
after the title "Vice President"), the Treasurer, any other executive officer,
the Secretary and any Assistant Treasurer or any Assistant Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the principal executive officer, principal
financial officer or principal accounting officer of the Company.
4.
"Opinion of Counsel" means a written opinion from legal counsel
who may be an employee of or counsel to the Company or the Trustee except to the
extent otherwise indicated in this Indenture.
A "person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Redemption Date" when used with respect to any of the
Convertible Subordinated Notes to be redeemed, means the date fixed by the
Company for such redemption pursuant to Article 3 of this Indenture and the
Convertible Subordinated Notes.
"Redemption Price" when used with respect to any of the
Convertible Subordinated Notes to be redeemed, means the price fixed for such
redemption pursuant to Article 3 of this Indenture and the Convertible
Subordinated Notes.
"Regular Record Date" means the [ ] 15 or [ ] 15 immediately
preceding each Interest Payment Date.
"Representative" means the (a) Indenture trustee or other
trustee, agent or representative for any Senior Debt or (b) with respect to any
Senior Debt that does not have any such trustee, agent or other representative,
(i) in the case of such Senior Debt issued pursuant to an agreement providing
for voting arrangements as among the holders or owners of such Senior Debt, any
holder or owner of such Senior Debt acting with the consent of the required
persons necessary to bind such holders or owners of such Senior Debt and (ii) in
the case of all other such Senior Debt, the holder or owner of such Senior Debt.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Debt" means the principal of, premium, if any, and
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with Indebtedness of the Company, whether outstanding on the date
of this Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company (including all deferrals, renewals, extensions
or refundings of, or amendments, modifications or supplements to the foregoing);
provided, however, that Senior Debt does not include (v) Indebtedness evidenced
by the holders of Convertible Subordinated Notes, (w) any liability for federal,
state, local or other taxes owed or owing by the Company, (x) Indebtedness of
the Company to any subsidiary of the Company except to the extent such
Indebtedness is of a type described in clause (ii) of the definition of
Indebtedness, (y) trade payables of the Company (other than, to the extent they
may otherwise constitute trade payables, any obligations of the type described
5.
in clause (ii) of the definition of Indebtedness), and (z) any particular
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that such Indebtedness shall not be
senior in right of payment to, or is pari passu with, or is subordinated or
junior to, the Convertible Subordinated Notes.
A "subsidiary" means with respect to any person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such person or one or more of the other subsidiaries of that person (or a
combination thereof) and (ii) any partnership (a) the sole general partners of
which are such person or of one or more subsidiaries of such person or (b) the
only general partners of which are such person or of one or more subsidiaries of
such person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (IS U.S. Code
Sections 77aaa 77bbbb) as in effect on the date of execution of this Indenture,
except as provided in Sections 9.3 and 12.6.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporation trust matters.
"U.S. Government Obligations" means direct obligation of the
United States of America for the payment of which the full faith and credit of
the United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Convertible Subordinated Notes,
the U.S. Government Obligations shall be payable as to principal or interest on
or before such payment date in such amounts as will provide the necessary money.
U.S. Government Obligations shall not be callable at the issuer's option.
Section 1.2 Other Definitions.
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Term Defined in Section
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"Bankruptcy Law".................................................... 6.1
"business day"...................................................... 10.7
"Current Market Price".............................................. 12.5
"closing price"..................................................... 12.5
6.
"Conversion Agent".................................................. 2.3
"Custodian"......................................................... 6.1
"Event of Default".................................................. 6.1
"Expiration Time"................................................... 12.5
"fair market value"................................................. 12.5
"Legal Holiday".................................................... 10.7
"non electing share"............................................... 12.6
"Paying Agent"..................................................... 2.3
"Payment Blockage Notice".......................................... 10.4
"Purchased Shares"................................................. 12.5
"Record Date"...................................................... 12.5
"Registrar"........................................................ 2.3
"Rights"........................................................... 12.5
"Securities"....................................................... 12.5
"trading day"...................................................... 12.5
Section 1.3 Incorporation by Reference of Trust Indenture Act.
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Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission means the Commission;
"indenture securities" means the Convertible Subordinated Notes;
"indenture security holder" means a holder of a Convertible
Subordinated Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Convertible Subordinated Notes means the
Company or any other obligor on the Convertible Subordinated Notes.
All other terms in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
Section 1.4 Rules of Construction. Unless the context
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otherwise requires:
(1) a term has the meaning assigned to it;
7.
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) the male, female and neuter genders include one
another.
ARTICLE II
THE CONVERTIBLE SUBORDINATED NOTES
Section 2.1 Form and Dating. The Convertible Subordinated Notes and
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the Trustee's certificate of authentication relating thereto shall be
substantially in the form set forth in Exhibit A, which is part of this
---------
Indenture, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture. The Convertible
Subordinated Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. The Company shall approve the form of the
Convertible Subordinated Notes and any notation, legend or endorsement on them.
Each Convertible Subordinated Note shall be dated the date of its
authentication.
The terms and provisions contained in the Convertible Subordinated Notes
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Section 2.2 Execution and Authentication. Two Officers shall sign
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the Convertible Subordinated Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Convertible
Subordinated Notes.
If an Officer whose signature is on a Convertible Subordinated Note no
longer holds that office at the time the Convertible Subordinated Note is
authenticated, the Convertible Subordinated Note shall nevertheless be valid.
A Convertible Subordinated Note shall not be valid until authenticated
by the manual signature of the Trustee. The signature shall be conclusive
evidence that the Convertible Subordinated Note has been authenticated under
this Indenture.
Upon a written order of the Company signed by an Officer of the Company,
the Trustee shall authenticate Convertible Subordinated Notes for original issue
up to an aggregate principal amount of $62,500,000 (plus up to $9,375,000
aggregate principal amount
8.
of Convertible Subordinated Notes that may be sold by the Company pursuant to
the over allotment option granted pursuant to the Underwriting Agreement, dated
as of [ ], 1996, among the Company and Prudential Securities Incorporated).
The aggregate principal amount of Convertible Subordinated Notes outstanding at
any time may not exceed that amount except as provided in Section 2.7.
The Convertible Subordinated Notes shall be issuable only in registered
form, without coupons, and only in denominations of $1,000 or any integral
multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Convertible Subordinated Notes. An authenticating agent
may authenticate Convertible Subordinated Notes 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 right as an
Agent to deal with the Company or an Affiliate of the Company.
Section 2.3 Registrar, Paying Agent and Conversion Agent. The
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Company shall maintain or cause to be maintained in such locations as it shall
determine, which may be the Corporate Trust Office, an office or agency: (i)
where securities may be presented for registration of transfer or for exchange
("Registrar"); (ii) where Convertible Subordinated Notes may be presented for
payment ("Paying Agent"); (iii) an office or agency where Convertible
Subordinated Notes may be presented for conversion (the "Conversion Agent"); and
(iv) where notices and demands to or upon the Company in respect of Convertible
Subordinated Notes and this Indenture may be served by the holders of the
Convertible Subordinated Notes. The Registrar shall keep a register of the
Convertible Subordinated Notes and of their transfer and exchange. The Company
may appoint one or more coregistrars, one or more additional paying agents and
one or more additional conversion agents. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
Conversion Agent. The Company may change any Paying Agent, Registrar, Conversion
Agent or coregistrar without prior notice. The Company shall notify the Trustee
of the name and address of any Agent not a party to this Indenture and shall
enter into an appropriate agency agreement with any Registrar, Paying Agent,
Conversion Agent or coregistrar not a party to this Indenture. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Company or any of its subsidiaries may act as Paying Agent, Registrar,
Conversion Agent or coregistrar, except that for purposes of Articles 3 and 8
and Section 4.6, neither the Company nor any of its subsidiaries shall act as
Paying Agent. If the Company fails to appoint or maintain another entity as
Registrar, or Paying Agent or Conversion Agent, the Trustee shall act as such,
and the Trustee shall initially act as such.
Section 2.4 Paying Agent to Hold Money in Trust. The Company shall
-----------------------------------
require each Paying Agent (other than the Trustee, who hereby so agrees), to
agree in writing that the paying Agent will hold in trust for the benefit of
holders of the Convertible Subordinated Notes or the Trustee all money held by
the Paying Agent for the payment of
9.
principal or interest on the Convertible Subordinated Notes, and will notify the
Trustee of any default by the Company in respect of making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a subsidiary of the
Company) shall have no further liability for the money. If the Company or a
subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the holders of the Convertible
Subordinated Notes all money held by it as Paying Agent.
Section 2.5 Holder 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 holders of Convertible Subordinated Notes and shall
otherwise comply with TIA Section 312(a). If the Trustee is Registrar, the
Company shall furnish to the Trustee at least seven business days before each
Interest Payment Date and as the Trustee may request in writing within fifteen
(15) days after receipt by the Company of any such request (or such lesser time
as the Trustee may reasonably request in order to enable it to timely provide
any notice to be provided by it hereunder) a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of holders
of Convertible Subordinated Notes.
Section 2.6 Transfer and Exchange. When Convertible Subordinated
---------------------
Notes are presented to the Registrar or a coregistrar with a request to register
a transfer or to exchange them for an equal principal amount of Convertible
Subordinated Notes for other denominations, the Registrar shall register the
transfer or make the exchange if its requirements for such transactions are met.
To permit registrations of transfers and exchanges, the Company shall issue and
the Trustee shall authenticate Convertible Subordinated Notes at the Registrar's
request, bearing registration numbers not contemporaneously outstanding. No
service charge shall be made for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable upon exchanges pursuant to Sections 2.10, 3.6, 9.5 or 12.2.
The Company shall not be required (i) to issue, register the transfer of
or exchange Convertible Subordinated Notes during a period beginning at the
opening of business 15 days before the day of any selection of Convertible
Subordinated Notes for redemption under Section 3.2 and ending at the close of
business on the day of selection, (ii) to register the transfer or exchange of
any Convertible Subordinated Note so selected for redemption in whole or in
part, except the unredeemed portion of any Convertible Subordinated Note being
redeemed in part or (iii) to register the transfer of any Convertible
Subordinated Notes surrendered for repurchase pursuant to Section 4.6.
All Convertible Subordinated Notes issued upon any transfer or exchange
of Convertible Subordinated Notes in accordance with this Indenture shall be the
valid
10.
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture as the Convertible Subordinated Notes surrendered
upon such registration of transfer or exchange.
Section 2.7 Replacement Convertible Subordinated Notes. If the
------------------------------------------
holder of a Convertible Subordinated Note claims that the Convertible
Subordinated Note has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Convertible
Subordinated Note if the Trustee's requirements are met. If required by the
Trustee or the Company as a condition of receiving a replacement Convertible
Subordinated Note, the holder of a Convertible Subordinated Note must provide a
certificate of loss and an indemnity and/or an indemnity bond sufficient, in the
judgment of both the Company and the Trustee, to fully protect the Company, the
Trustee, any Agent and any authenticating agent from any loss, liability, cost
or expense which any of them may suffer or incur if the Convertible Subordinated
Note is replaced. The Company and the Trustee may charge the relevant holder for
their expenses in replacing any Convertible Subordinated Note.
The Trustee or any authenticating agent may authenticate any such
substituted Convertible Subordinated Note, and deliver the same upon the receipt
of such security or indemnity as the Trustee, the Company and, if applicable,
such authenticating agent may require. Upon the issuance of any substituted
Convertible Subordinated Note, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any
Convertible Subordinated Note which has matured or is about to mature, or has
been called for redemption pursuant to Section 4.6 or is about to be converted
into Common Stock shall become mutilated, lost or stolen, the Company may,
instead of issuing a substitute Convertible Subordinated Note, pay or authorize
the payment of or convert or authorize the conversion of the same (without
surrender thereof except in the case of a mutilated Convertible Subordinated
Note), as the case may be, if the applicant for such payment or conversion shall
furnish to the Company, to the Trustee and, if applicable, to the authenticating
agent such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or connected with
such substitution, and, in case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction, loss or theft of such Convertible
Subordinated Note and of the ownership thereof.
Every replacement Convertible Subordinated Note is an additional
obligation of the Company.
Section 2.8 Outstanding Convertible Subordinated Notes. The
------------------------------------------
Convertible Subordinated Notes outstanding at any time are all the Convertible
Subordinated Notes properly authenticated by the Trustee except for those
cancelled by the Trustee, those delivered to it for cancellation, and those
described in this Section as not outstanding.
11.
If a Convertible Subordinated Note is replaced pursuant to Section 2.7,
it ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Convertible Subordinated Note is held by a bona fide
purchaser.
If Convertible Subordinated Notes are considered paid under Section 4.1
or converted under Article 12, they cease to be outstanding and interest on them
ceases to accrue.
Subject to Section 2.9 hereof, a Convertible Subordinated Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Convertible Subordinated Note.
Section 2.9 When Treasury Convertible Subordinated Notes
--------------------------------------------
Disregarded. In determining whether the holders of the required principal amount
-----------
of Convertible Subordinated Notes have concurred in any direction, waiver or
consent, Convertible Subordinated Notes owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Convertible Subordinated
Notes which the Trustee knows are so owned shall be so disregarded.
Section 2.10 Temporary Convertible Subordinated Notes. Until
----------------------------------------
definitive Convertible Subordinated Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be
substantially in the form of definitive Convertible Subordinated Notes but may
have variations that the Company considers appropriate for temporary Convertible
Subordinated Notes. If temporary Convertible Subordinated Notes are issued, the
Company will cause definitive Convertible Subordinated Notes to be prepared
without unreasonable delay. After the preparation of definitive Convertible
Subordinated Notes, the temporary Convertible Subordinated Notes shall be
exchangeable for definitive Convertible Subordinated Notes upon surrender of the
temporary Convertible Subordinated Notes at any office or agency of the Company
designated pursuant to Section 2.3 without charge to the holder of the
Convertible Subordinated Note. Upon surrender for cancellation of any one or
more temporary Convertible Subordinated Notes the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Convertible Subordinated Notes of authorized denominations.
Until so exchanged, the temporary Convertible Subordinated Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Convertible Subordinated Notes.
Section 2.11 Cancellation. The Company at any time may deliver
------------
Convertible Subordinated Notes to the Trustee for cancellation. The Registrar
and Paying Agent shall forward to the Trustee any Convertible Subordinated Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel
12.
Convertible Subordinated Notes surrendered for registration of transfer,
exchange, payment, replacement, conversion, redemption, repurchase or
cancellation and shall dispose of cancelled Convertible Subordinated Notes as
the Company directs, provided that the Trustee shall not be required to destroy
such Convertible Subordinated Notes. The Company may not issue new Convertible
Subordinated Notes to replace Convertible Subordinated Notes that it has paid,
or that have been delivered to the Trustee for cancellation or that any holder
has converted pursuant to Article 12 hereof, redeemed pursuant to Article 3 or
repurchased pursuant to Section 4.6.
Section 2.12 Defaulted Interest. If the Company fails to make a
------------------
payment of interest on the Convertible Subordinated Notes, it shall pay such
defaulted interest plus, to the extent lawful, any interest payable on the
defaulted interest. It may pay such defaulted interest, plus any such interest
payable on it, to the persons who are holders of Convertible Subordinated Notes
on a subsequent special record date. The Company shall fix any such record date
and payment date. At least 15 days before any such record date, the Company
shall mail to holders of the Convertible Subordinated Notes a notice that states
the record date, payment date and amount of such interest to be paid.
Section 2.13 Cusip Number. The Company in issuing the Convertible
------------
Subordinated Notes may use a "CUSIP" number, and if so, such CUSIP number shall
be included in notices of redemption or exchange as a convenience to holders of
Convertible Subordinated Notes; provided, however, that any such notice may
state that no representation is made as to the correctness or accuracy of the
CUSIP number printed in the notice or on the Convertible Subordinated Notes and
that reliance may be placed only on the other identification numbers printed on
the Convertible Subordinated Notes. The Company will promptly notify the Trustee
of any change in the CUSIP number.
ARTICLE III
REDEMPTION
Section 3.1 Notices to Trustee. If the Company elects to redeem
------------------
Convertible Subordinated Notes pursuant to the optional redemption provisions of
paragraph 5 of the Convertible Subordinated Notes, it shall furnish to the
Trustee, at least 20 but not more than 60 days before a redemption date (unless
a shorter period shall be satisfactory to the Trustee), an Officers' Certificate
setting forth (i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Convertible
Subordinated Notes to be redeemed (if less than all) and (iv) the redemption
price.
Section 3.2 Selection of Convertible Subordinated Notes to be
-------------------------------------------------
Redeemed. If less than all the Convertible Subordinated Notes are to be
--------
redeemed, the Trustee shall select the Convertible Subordinated Notes to be
redeemed by lot or pro rata or by a method that
13.
complies with the requirements of any exchange on which the Convertible
Subordinated Notes are listed or quoted that the Trustee considers fair and
appropriate. The Trustee shall make the selection not more than 60 days and not
less than 15 days before the redemption date from Convertible Subordinated Notes
outstanding not previously called for redemption. The Trustee may select for
redemption portions of the principal of Convertible Subordinated Notes that have
a denomination larger than $1,000 or integral multiple thereof. Convertible
Subordinated Notes and portions thereof will be redeemed in the amount of $1,000
or integral multiples of $1,000. Provisions of this Indenture that apply to
Convertible Subordinated Notes called for redemption also apply to portions of
Convertible Subordinated Notes called for redemption. The Trustee shall notify
the Company promptly of the Convertible Subordinated Notes or portions of
Convertible Subordinated Notes to be called for redemption.
Section 3.3 Notice of Redemption. At least 20 days but not more
--------------------
than 60 days before a redemption date, the Company shall mail a notice of
redemption to each holder whose Convertible Subordinated Notes are to be
redeemed.
The notice shall identify the Convertible Subordinated Notes to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Convertible Subordinated Note is being redeemed
in part, the portion of the principal amount of such
Convertible Subordinated Note to be redeemed and that,
after the redemption date, upon surrender of such
Convertible Subordinated Note, a new Convertible
Subordinated Note or Convertible Subordinated Notes in
principal amount equal to the unredeemed portion will
be issued;
(4) that Convertible Subordinated Notes called for
redemption must be surrendered to the Paying Agent to
collect the redemption price;
(5) that interest on Convertible Subordinated Notes called
for redemption and for which funds have been set apart
for payment, ceases to accrue on and after the
redemption date (unless the Company defaults in the
payment of the redemption price);
(6) the Paragraph of the Convertible Subordinated Notes
pursuant to which the Convertible Subordinated Notes
are being redeemed;
(7) the aggregate principal amount of Convertible
Subordinated Notes (if less than all) that are being
redeemed;
14.
(8) the CUSIP number of the Convertible Subordinated Notes
(provided that the disclaimer permitted by Section 2.13
may be made);
(9) the name and address of the Paying Agent;
(10) that Convertible Subordinated Notes called for
redemption may be converted at any time prior to the
close of business on the last trading day immediately
preceding the redemption date and if not converted
prior to the close of business on such date, the right
of conversion will be lost; and
(11) that in the case of Convertible Subordinated Notes or
portions thereof called for redemption on a date that
is also an Interest Payment Date, the interest payment
due on such date shall be paid to the person in whose
name the Convertible Subordinated Note is registered at
the close of business on the relevant Regular Record
Date.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at its expense.
Section 3.4 Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Convertible Subordinated Notes called for redemption
become due and payable on the redemption date at the redemption price set forth
in the Convertible Subordinated Note.
Section 3.5 Deposit of Redemption Price. On or before the
---------------------------
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money in immediately available funds sufficient to pay the redemption
price of and accrued interest on all Convertible Subordinated Notes to be
redeemed on that date. The Trustee or the Paying Agent shall return to the
Company any money not required for that purpose.
On and after the redemption date, unless the Company shall default in
the payment of the redemption price, interest will cease to accrue on the
principal amount of the Convertible Subordinated Notes or portions thereof
called for redemption and for which funds have been set apart for payment. In
the case of Convertible Subordinated Notes or portions thereof redeemed on a
redemption date which is also an Interest Payment Date, the interest payment due
on such date shall be paid to the person in whose name the Convertible
Subordinated Note is registered at the close of business on the relevant Regular
Record Date.
Section 3.6 Convertible Subordinated Notes Redeemed in Part. Upon
-----------------------------------------------
surrender of a Convertible Subordinated Note that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the holder of a
Convertible Subordinated Note at the
15.
expense of the Company a new Convertible Subordinated Note equal in principal
amount to the unredeemed portion of the Convertible Subordinated Note
surrendered.
Section 3.7 Conversion Arrangement On Call For Redemption. In
---------------------------------------------
connection with any redemption of Convertible Subordinated Notes, the Company
may arrange for the purchase and conversion of any Convertible Subordinated
Notes by an arrangement with one or more investment bankers or other purchasers
to purchase such Convertible Subordinated Notes by paying to the Trustee in
trust for the holders, on or before the date fixed for redemption, an amount not
less than the applicable redemption price, together with interest accrued to the
date fixed for redemption, of such Convertible Subordinated Notes.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the redemption price of such Convertible
Subordinated Notes, together with interest accrued to the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by the purchasers. If such an agreement is entered into, a
copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Convertible Subordinated Notes 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 12)
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the date fixed for redemption (and the right to convert
any such Convertible Subordinated Notes shall be deemed to have been extended
through such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Convertible Subordinated Notes. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion of any Convertible Subordinated Notes
shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in conversion of any Convertible
Subordinated Notes between the Company and such purchasers to which the Trustee
has not consented in writing, including the costs and expenses incurred by the
Trustee 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.
ARTICLE IV
COVENANTS
Section 4.1 Payment of Convertible Subordinated Notes. The Company
-----------------------------------------
shall pay the principal of and premium, if any, and interest on the Convertible
Subordinated Notes on the dates and in the manner provided in the Convertible
Subordinated Notes. All payments so due shall be considered paid on the date due
if the Trustee or Paying Agent
16.
(other than the Company or a subsidiary of the Company) holds as of 10:00 a.m.
New York City time on that date immediately available funds designated for and
sufficient to pay all such payments. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, presentations, surrenders, notices and demands with
respect to the Convertible Subordinated Notes may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Convertible Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designation.
Section 4.2 Commission Reports. The Company shall comply with
------------------
Section 314(a) of the TIA.
Section 4.3 Compliance Certificate. The Company shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that a review of the activities of the Company and
its subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has fully performed its obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company is not in default in the performance or
observance of any of the terms and conditions hereof (or, if any Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge) and, that to the best of his or
her knowledge, no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Convertible
Subordinated Notes are prohibited.
The Company shall, so long as any of the Convertible Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default.
Section 4.4 Maintenance of Office or Agency. The Company shall
-------------------------------
maintain or cause to be maintained the office or agency required under Section
2.3. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or to
furnish the Trustee with the address thereof, all presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in this Indenture.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency pursuant to Section
2.3 The Company will give prompt written
17.
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
Section 4.5 Continued Existence. Subject to Article 5, the Company
-------------------
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 4.6 Repurchase Upon a Change of Control. In the event of a
-----------------------------------
Change of Control, the Company shall make an offer to purchase (the "Change of
Control Offer") the Notes then outstanding at a purchase price equal to one
hundred percent (100%) of the principal amount (excluding any premium) thereof
plus accrued and unpaid interest up to but not including the Change of Control
Purchase Date (as defined below) on the terms set forth in this Section. The
date on which the Company shall purchase the Securities pursuant to this Section
(the "Change of Control Purchase Date") shall be no earlier than 30 days, nor
later than 60 days, after the notice referred to below is mailed, unless a
longer period shall be required by law. The Company shall notify the Trustee in
writing promptly after the occurrence of any Change of Control of the Company's
obligation to offer to purchase all of the Securities.
Notice of a Change of Control Offer shall be mailed by the
Company to the holders of the Notes at their last registered address (with a
copy to the Trustee) within twenty (20) business days after a Change of Control
has occurred. The Change of Control Offer shall remain open from the time of
mailing until a date not more than five (5) Business Days before the Change of
Control Purchase Date. The notice shall contain all instructions and materials
necessary to enable such holders to tender Convertible Subordinated Notes (in
whole or in part) pursuant to the Change of Control Offer. The notice, which
shall govern the terms of the Change of Control Offer, shall state:
a. that the Change of Control Offer is being made pursuant
to this Section;
b. the purchase price and the Change of Control Purchase
Date;
c. that any Convertible Subordinated Note not surrendered
or accepted for payment will continue to accrue interest;
d. that any Convertible Subordinated Note accepted for
payment pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Purchase Date;
e. that any holder electing to have a Convertible
Subordinated Note purchased (in whole or in part) pursuant to a Change
of Control Offer will be required to surrender the Convertible
Subordinated Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Convertible
18.
Subordinated Note completed, to the Paying Agent at the address
specified in the notice (or otherwise make effective delivery of the
Convertible Subordinated Note pursuant to book-entry procedures and the
related rules of the applicable depositories) at least five (5) Business
Days before the Change of Control Purchase Date; and
f. that any holder will be entitled to withdraw his or her
election if the Paying Agent receives, not later than three (3) Business
Days prior to the Change of Control Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the holder,
the principal amount of the Convertible Subordinated Note the holder
delivered for purchase and a statement that such holder is withdrawing
his or her election to have the Convertible Subordinated Note purchased.
On the Change of Control Purchase Date, the Company shall (i)
accept for payment Convertible Subordinated Notes or portions thereof
surrendered and properly tendered, and not withdrawn, pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent, no later than 11:00 a.m.
eastern standard time, money, in immediately available funds, sufficient to pay
the purchase price of all Convertible Subordinated Notes or portions thereof so
accepted and (iii) deliver to the Trustee, no later than 11:00 a.m. eastern
standard time, Convertible Subordinated Notes so accepted together with an
Officers' Certificate stating that such Convertible Subordinated Notes have been
accepted for payment by the Company. The Paying Agent shall promptly, and in any
event within one (1) Business Day following the deposit and delivery specified
in clauses (ii) and (iii) of the immediately preceding sentence, mail or deliver
to holders of Convertible Subordinated Notes so accepted payment in an amount
equal to the purchase price. Holders whose Convertible Subordinated Notes are
purchased only in part will be issued new Convertible Subordinated Notes equal
in principal amount to the unpurchased portion of the Convertible Subordinated
Notes surrendered.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Convertible Subordinated
Notes pursuant to this Section. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.
Section 4.7 Appointments to Fill Vacancies in Trustee's Office. The
--------------------------------------------------
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.8, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 4.8 Stay, Extension and Usury Laws. The Company covenants
------------------------------
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead or in any
19.
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter enforced, that may
affect the Company's obligation to pay the Convertible Subordinated Notes; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law insofar as such law applies to the
Convertible Subordinated Notes, and covenants that it shall not, by resort to
any such law, hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power as
though no such law has been enacted.
ARTICLE V
SUCCESSORS
Section 5.1 When the Company May Merge, Etc. The Company will not,
-------------------------------
in a single transaction or series of related transactions, consolidate or merge
with or into, or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets to, any person as an
entirety or substantially as an entirety unless:
(a) either (i) the Company shall be the surviving or
continuing corporation or (ii) the person (if other than the Company)
formed by or surviving any such consolidation or into which the Company
is merged or the person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the
Company substantially as an entirety (1) shall be a corporation
organized and validly existing under the laws of the United States or
any State thereof or the District of Columbia and (2) shall expressly
assume, by supplemental indenture in form reasonably satisfactory to the
Trustee, executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of
the Convertible Subordinated Notes and the performance of every covenant
of the Convertible Subordinated Notes and this Indenture on the part of
the Company to be performed or observed;
(b) immediately after giving effect to such transaction no
Default and no Event of Default shall have occurred and be continuing;
and the Company or such person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this provision of this
Indenture and that all conditions precedent in this Indenture relating
to such transaction have been satisfied.
For purposes of this Section 5.1, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more subsidiaries of the
Company, the capital stock of which constitutes
20.
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
Section 5.2 Successor Corporation Substituted. Upon any such
---------------------------------
consolidation, merger, sale, assignment or other disposition in accordance with
Section 5.1, the successor person formed by such consolidation or into which the
Company is merged or to which such sale, conveyance, lease or transfer or other
disposition is made will 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 had been named as the Company therein, and thereafter
(except in the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Convertible Subordinated
Notes.
Section 5.3 Purchase Option on Change of Control. This Article 5
------------------------------------
does not affect the obligations of the Company (including without limitation any
successor to the Company) under Section 4.6.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. An "Event of Default" with respect
-----------------
to any Convertible Subordinated Notes occurs if:
(a) the Company defaults in the payment (whether or not
such payment is prohibited by the subordination provisions of Article 11
of this Indenture) of principal of, or premium, if any, on the
Convertible Subordinated Notes when due at maturity, upon repurchase,
upon acceleration or otherwise, including, without limitation, failure
of the Company to repurchase the Convertible Subordinated Notes on the
date required pursuant to Section 4.6 or of the Company to make any
optional redemption payment when required pursuant to Article 3; or
(b) the Company defaults in the payment (whether or not
such payment is prohibited by the subordination provisions of Article 11
of this Indenture) of any installment of interest on the Convertible
Subordinated Notes when due (including any interest payable in
connection with a repurchase pursuant to Section 4.6 or in connection
with any optional redemption payment pursuant to Article 3) and
continuance of such default for more than 30 days; or
(c) the Company defaults (other than a default set forth in
clauses (a) and (b) above) in the performance of, or breach of, any
other covenant or warranty of the Company set forth in this Indenture or
the Convertible Subordinated Notes and fails to remedy such default or
breach within a period of 90 days after the receipt of
21.
written notice from the Trustee or the holders of at least 25% in aggregate
principal amount of the then outstanding Convertible Subordinated Notes; or
(d) the Company fails to provide notice of any Change of Control in
accordance with Section 4.6; or
(e) the Company or any Material Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
(iv) makes a general assignment for the benefit of its
creditors; or
(f) a court of competent jurisdiction enters a judgment, order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
90 days.
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
90 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
In the case of any Event of Default pursuant to the provisions of this
Section 6.1 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 the Company would have had to pay if the Company then had
elected to redeem the Convertible Subordinated Notes pursuant to Paragraph 5 of
the Convertible Subordinated Notes of this Indenture, an equivalent premium
shall also become and be immediately due and payable
22.
to the extent permitted by law, anything in this Indenture or in the Convertible
Subordinated Notes contained to the contrary notwithstanding.
If an Event of Default occurs prior to any date on which the Company is
prohibited from redeeming the Convertible Subordinated Notes pursuant to the
optional redemption provisions of Article 3 of this Indenture by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Convertible
Subordinated Notes prior to such date, then the premium specified in this
Indenture shall also become immediately due and payable to the extent permitted
by law upon the acceleration of the Convertible Subordinated Notes.
Section 6.2 Acceleration. If an Event of Default (other than an Event of
------------
Default specified in clauses (e) and (f) of Section 6.1) occurs and is
continuing, then and in every such case the Trustee, by written notice to the
Company, or the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes, by written notice to the
Company and the Trustee, may declare the unpaid principal of and accrued
interest on all the Convertible Subordinated Notes to be due and payable. Upon
such declaration such principal amount, premium, if any, and accrued and unpaid
interest shall become immediately due and payable, notwithstanding anything
contained in this Indenture or the Convertible Subordinated Notes to the
contrary but subject to the provisions of Article 11 hereof. If any Event of
Default with respect to the Company specified in clauses (g) or (h) of Section
6.1 occurs, all unpaid principal of and premium, if any, and accrued and unpaid
interest on the Convertible Subordinated Notes then outstanding shall become
automatically due and payable subject to the provisions of Article 11 hereof,
without any declaration or other act on the part of the Trustee or any holder of
Convertible Subordinated Notes.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Subordinated Notes by notice to the Trustee may rescind
an acceleration of the Convertible Subordinated Notes and its consequences if
all existing Events of Default (other than nonpayment of principal of or
premium, if any, and interest on the Convertible Subordinated Notes which has
become due solely by virtue of such acceleration) have been cured or waived and
if the rescission would not conflict with any judgment or decree of any court of
competent jurisdiction. No such rescission shall affect any subsequent Default
or Event of Default or impair any right consequent thereto.
Section 6.3 Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on the Convertible
Subordinated Notes or to enforce the performance of any provision of the
Convertible Subordinated Notes or this Indenture. The Trustee may maintain a
proceeding even if it does not possess any of the Convertible Subordinated Notes
or does not produce any of them in the proceeding. A delay or omission by the
Trustee or any holder of a Convertible Subordinated Note in exercising any right
or remedy occurring upon an Event of Default shall not impair the right or
remedy or
23.
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults. The holders of a majority in
-----------------------
aggregate principal amount of the Convertible Subordinated Notes then
outstanding may, on behalf of the holders of all the Convertible Subordinated
Notes waive an existing Default or Event of Default and its consequences, except
a Default or Event of Default in the payment of the principal of or interest on
the Convertible Subordinated Notes (other than the non payment of principal of
and premium, if any, and interest on the Convertible Subordinated Notes which
has become due solely by virtue of an acceleration which has been duly rescinded
as provided above), or in respect of a covenant or provision of this Indenture
which cannot be modified or amended without the consent of all holders of
Convertible Subordinated Notes. When a Default is waived, it is cured and stops
continuing. No waiver shall extend to any subsequent or other Default or impair
any right consequent thereon.
Section 6.5 Control by Majority. The holders of a majority in aggregate
-------------------
principal amount of the then outstanding Convertible Subordinated Notes 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 other holders of Convertible Subordinated Notes or that may involve
the Trustee in personal liability; provided, that the Trustee shall have no duty
or obligation (subject to Section 7.1) to ascertain whether or not such actions
of forbearances are unduly prejudicial to such holders; provided, further, that
the Trustee may take any other action the Trustee deems proper that is not
inconsistent with such directions.
Section 6.6 Limitation on Suits. A holder of a Convertible Subordinated
-------------------
Note may not pursue any remedy with respect to this Indenture or the Convertible
Subordinated Notes unless:
(1) the holder gives to the Trustee notice of a continuing Event of
Default;
(2) the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes make a request to the
Trustee to pursue the remedy;
(3) such holder or holders offer and, if requested, provide 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 and, if requested, the provision of
indemnity; and
24.
(5) during such 60 day period the holders of a majority in principal
amount of the then outstanding Convertible Subordinated Notes do not give
the Trustee a direction inconsistent with the request.
A holder of a Convertible Subordinated Note may not use this Indenture to
prejudice the rights of another holder or to obtain a preference or priority
over another holder.
Section 6.7 Rights of Holders to Receive Payment. Subject to the
------------------------------------
provisions of Article 11 hereof, notwithstanding any other provision of this
Indenture, the right of any holder of a Convertible Subordinated Note to receive
payment of principal, premium, if any, and interest on the Convertible
Subordinated Note, on or after the respective due dates expressed in the
Convertible Subordinated Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, or to bring suit for the enforcement
of the right to convert the Convertible Subordinated Note shall not be impaired
or affected without the consent of the holder of a Convertible Subordinated
Note.
Section 6.8 Collection Suit by Trustee. If an Event of Default specified
--------------------------
in Section 6.1(a) or (b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid on the
Convertible Subordinated Notes and interest on overdue principal and interest
and such further amount as shall be sufficient to cover the costs and, to the
extent lawful, expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.9 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 and the holders of Convertible
Subordinated Notes allowed in any judicial proceedings relative to the Company,
its creditors or its property. Nothing contained herein shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any holder of a Convertible Subordinated Note any plan of reorganization,
arrangement, adjustment or composition affecting the Convertible Subordinated
Notes or the rights of any holder thereof, or to authorize the Trustee to vote
in respect of the claim of any holder in any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money pursuant to
----------
this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7, including
payment of all compensation, expenses and liabilities incurred, and all
advances made, by the Trustee, and the costs and expenses of collection;
Second: to holders of Senior Debt to the extent required by Article
11;
25.
Third: to holders of Convertible Subordinated Notes for amounts due
and unpaid on the Convertible Subordinated Notes for principal, premium, if
any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Convertible Subordinated
Notes for principal, premium, if any, and interest, respectively; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a record
date and payment date for any payment to holders of Convertible Subordinated
Notes.
Section 6.11 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 a Trustee, a court in its discretion may
require the filing by any party litigant in the suit, other than the Trustee, 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 does not apply to a
suit by the Trustee, a suit by a holder pursuant to Section 6.7 or a suit by
holders of more than 10% in principal amount of the then outstanding Convertible
Subordinated Notes.
ARTICLE VII
THE TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed. Whether or not
herein expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Article 7.
Section 7.1 Duties of the Trustee.
---------------------
(a) If an Event of Default known to the Trustee 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
their 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 known to
the Trustee:
26.
(1) The duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(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 any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the form required by
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 paragraph (b) of this
Section;
(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 6.5.
(d) whether or not therein expressly so provided, every provision of this
Indenture that is in any way related to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability in the performance of any of its
duties or the exercise of any of its rights and powers hereunder.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree 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 7.2 Rights of the Trustee.
---------------------
27.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, security or other 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 contained therein.
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof is herein specifically prescribed). In
addition, before the Trustee acts or refrains from acting, it may require
an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through its attorneys
and agents and other persons not regularly in its employ and shall not be
responsible for the misconduct or negligence of any attorney or 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
discretion, rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by Officers of the Company.
(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(g) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
discretion of any of the holders of Convertible Subordinated Notes pursuant
to the provisions of this Indenture, unless such holders have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred therein or thereby.
(h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, security or
other document unless requested
28.
in writing to do so by the holders of not less than a majority in aggregate
principal amount of the Convertible Subordinated Notes then outstanding,
provided that if the Trustee determines in its sole and absolute discretion
to make any such investigation, then it shall be entitled, upon reasonable
prior notice and during normal business hours, to examine the books and
records and the premises of the Company, personally or by agent or
attorney, and the reasonable expenses of every such examination shall be
paid by the Company or, if paid by the Trustee or any predecessor Trustee,
shall be reimbursed by the Company upon demand.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not
be answerable for other than its negligence or willful misconduct.
(j) Except for (i) a default under Sections 5.1(a) or (b) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not
be deemed to have notice of an default or event unless specifically
notified in writing of such event by the Company or the holders of not less
than 25% in aggregate principal amount of the Convertible Subordinated
Notes then outstanding; as used herein, the term "actual knowledge" means
the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
(k) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether
an adjustment is required.
Section 7.3 Individual Rights of the Trustee. Subject to Sections 7.10
--------------------------------
and 7.11, the Trustee in its individual or any other capacity may become the
owner or pledgee of Convertible Subordinated Notes with the same rights it would
have if it were not the Trustee and may otherwise deal with the Company or an
Affiliate and receive, collect, hold and retain collections from the Company
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be responsible
--------------------
for and makes no representation as to the validity or adequacy of this Indenture
or the Convertible Subordinated Notes. It shall not be accountable for the
Company's use of the proceeds from the Convertible Subordinated Notes or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture. It shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the
Convertible Subordinated Notes or any other document in connection with the sale
of the Convertible Subordinated Notes or pursuant to this Indenture other than
its certificate of authentication.
29.
Section 7.5 Notice of Defaults. If a Default or Event of Default
------------------
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to each holder of a Convertible Subordinated Note a notice of the Default
or Event of Default within 60 days after it occurs. A Default or an Event of
Default shall not be considered known to the Trustee unless it is a Default or
Event of Default in the payment of principal or interest when due under Section
6.1(a) or (b) or the Trustee shall have received notice thereof, in accordance
with this Indenture, from the Company or from the holders of a majority in
principal amount of the outstanding Convertible Subordinated Notes. Except in
the case of a Default or Event of Default in payment of principal of, premium,
if any, or interest on any Convertible Subordinated Note, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of the holders
of the Convertible Subordinated Notes.
Section 7.6 Reports by the Trustee to Holders. Within 60 days after
---------------------------------
the reporting date stated in Section 10.10, the Trustee shall mail to holders of
Convertible Subordinated Notes a brief report not the dated as of such reporting
date that complies with TIA Section 313(a) described in TIA Section 313(a) has
occurred within twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply (but if no event with TIA Section
313 (b) (2). The Trustee shall also transmit by required by TIA Section 313(c).
A copy of each report at the time of its mailing to holders of
Convertible Subordinated Notes shall be filed, at the expense of the Company, by
the Trustee with the Commission and each stock exchange or securities market, if
any, on which the Convertible Subordinated Notes are listed. The Company shall
timely notify the Trustee when the Convertible Subordinated Notes are listed or
quoted on any stock exchange or securities market.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
--------------------------
Trustee from time to time and the Trustee shall be entitled to reasonable
compensation for its acceptance of this Indenture and its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by or on behalf of it in addition to the compensation for its services.
Such expenses may include the reasonable compensation, disbursements and
expenses of the Trustee's agents, counsel and other persons not regularly in its
employ.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture and the trusts hereunder,
including the costs and expenses of defending itself against or investigating
any claim of liability in the premises, except as set forth in the next
paragraph. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
30.
relieve the Company of its obligations hereunder. The Company shall defend the
claim with counsel designated by the Company, who may be outside counsel to the
Company but shall in all events be reasonably satisfactory to the Trustee, and
the Trustee shall cooperate in the defense. In addition, the Trustee may retain
one separate counsel and, if deemed advisable by such counsel, local counsel,
and the Company shall pay the reasonable fees and expenses of such separate
counsel and local counsel. The indemnification herein extends to any settlement,
provided that the Company will not be liable for any settlement made without its
consent, provided, further, that such consent will not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through its own negligence or willful
misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Convertible Subordinated Notes on all
money or property held or collected by the Trustee, except that held in trust to
pay principal and interest on Convertible Subordinated Notes. Such Liens and the
Company's obligations under this Section 7.7 shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1 (g) or (h) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.8 Replacement of the Trustee. A resignation or removal of
--------------------------
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.8.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company. The holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes may
remove the Trustee by so notifying the Trustee and the Company in writing and
may appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
31.
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. Within one year after the successor Trustee takes office, the holders
of a majority in principal amount of the then outstanding Convertible
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
holders of at least 10% in principal amount of the then outstanding Convertible
Subordinated Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any holder of a Convertible
Subordinated Note who has been a holder for at least six months fails to comply
with Section 7.10, such holder 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. Thereupon 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. The successor Trustee shall mail a notice of its
succession to holders of Convertible Subordinated Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided that all sums owing to the retiring Trustee hereunder have
been paid and subject to the lien provided for in Section 7.7. Notwithstanding
the replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 shall continue for the benefit of the retiring
Trustee.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
Section 7.9 Successor Trustee by Merger, Etc. If the Trustee
---------------------------------
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
Section 7.10 Eligibility, Disqualification. This Indenture shall always
-----------------------------
have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The
Trustee shall always have a combined capital and surplus as stated in Section
10.10. The Trustee is subject to TIA Section 310 (b) regarding the
disqualification of a trustee upon acquiring a conflicting interest.
32.
Section 7.11 Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship set forth 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 VIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.1 Discharge of Indenture. When (a) the Company delivers to
----------------------
the Trustee for cancellation all Convertible Subordinated Notes theretofore
authenticated (other than any other Convertible Subordinated Notes which have
been destroyed, lost or stolen and in lieu of or in substitution for which other
Convertible Subordinated Notes have been authenticated and delivered) and not
theretofore canceled, or (b) all the Convertible Subordinated Notes not
theretofore canceled or delivered to the Trustee for cancellation have become
due and payable, or are by their terms to become due and payable within one year
or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company deposits with the Trustee, in trust, cash and/or U.S. Government
Obligations sufficient to pay at maturity or upon redemption of all of the
Convertible Subordinated Notes (other than any Convertible Subordinated Notes
which have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Convertible Subordinated Notes have been
authenticated and delivered) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case
may be, and if in either case the Company also pays, or causes to be paid, all
other sums payable hereunder by the Company, than this Indenture shall cease to
be of further effect (except as to (i) rights of registration of transfer,
substitution, replacement and exchange and conversion of Convertible
Subordinated Notes, (ii) rights hereunder of holders of Convertible Subordinated
Notes to receive payments of principal of and premium, if any, and interest on,
the Convertible Subordinated Notes (iii) the obligations under Sections 2.3 and
8.5 hereof and (iv) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel as required by Section 10.4 and
at the Company's cost and expense, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Convertible Subordinated Notes.
Section 8.2 Deposited Monies to be Held in Trust by Trustee. Subject
-----------------------------------------------
to Section 8.4, all monies deposited with the Trustee pursuant to Section 8.1
shall be held in trust and applied by it to the payment, notwithstanding the
provisions of Article 11, either
33.
directly or through the Paying Agent, to the holders of the particular
Convertible Subordinated Notes for the payment or redemption of which such
monies have been deposited with the Trustee, of all sums due and to become due
thereon for principal and interest and premium, if any.
Section 8.3 Paying Agent to Repay Monies Held. Upon the satisfaction
---------------------------------
and discharge of this Indenture, all monies then held by any Paying Agent (other
than the Trustee) shall, upon the Company's demand, be repaid to it or paid to
the Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
Section 8.4 Return of Unclaimed Monies. Subject to the requirements of
--------------------------
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of premium, if any, or interest on Convertible Subordinated Notes
and not applied but remaining unclaimed by the holders thereof for two years
after the date upon which the principal of, premium, if any, or interest on such
Convertible Subordinated Notes as the case may be, have become due and payable,
shall be repaid to the Company by the Trustee on demand and all liability of the
Trustee shall thereupon cease with respect to such monies; and the holder of any
of the Convertible Subordinated Notes shall thereafter look only to the Company
for any payment which such holder may be entitled to collect unless an
applicable abandoned property law designates another person.
Section 8.5 Reinstatement. If the Trustee or the Paying Agent is
-------------
unable to apply any money in accordance with Section 8.2 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 Convertible Subordinated Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.1 until such time as the
Trustee or the Paying Agent is permitted to apply all such money in accordance
with Section 8.2; provided, however, that if the Company makes any payment of
interest on or principal of any Convertible Subordinated Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the holders thereof to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
Section 9.1 Without the Consent of Holders. The Company and the
------------------------------
Trustee may amend this Indenture or the Convertible Subordinated Notes without
notice to or the consent of any holder of a Convertible Subordinated Note for
the purposes of:
(a) curing any ambiguity or correcting or supplementing any
defective or inconsistent provision contained in this Indenture, or
making any other changes in
34.
the provisions of this Indenture which the Company and the Trustee may
deem necessary or desirable and which will not adversely affect the
legal rights under the Indenture of the holders of Convertible
Subordinated Notes.
(b) providing for uncertificated Convertible Subordinated
Notes in addition to or in place of certificated Convertible
Subordinated Notes;
(c) evidencing the succession of another person to the Company
and the assumption by such successor of the covenants and obligations of
the Company thereunder and in the Convertible Subordinated Notes as
permitted by Section 5.1;
(d) providing for conversion rights of holders of Convertible
Subordinated Notes in the event of consolidation, merger or sale of all
or substantially all of the assets of the Company and to otherwise
comply with Section 5.1;
(e) reducing the Conversion Price;
(f) making any changes or adding to the covenants of the
Company for the benefit of the holders of Convertible Subordinated
Notes;
(g) complying with the requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the TIA;
or
(h) evidencing and providing for the acceptance of appointment
here-under by a successor Trustee with respect to the Convertible
Subordinated Notes.
Section 9.2 With the Consent of Holders. Subject to Section 6.7, the
---------------------------
Company and the Trustee may amend this Indenture or the Convertible Subordinated
Notes with the written consent of the holders of the holders of 66 2/3% in
aggregate principal amount of the then outstanding Convertible Subordinated
Notes (including consents obtained in connection with a tender offer or exchange
offer for Convertible Subordinated Notes).
Subject to Sections 6.4 and 6.7, the holders of 66 2/3% in aggregate
principal amount of the Convertible Subordinated Notes then outstanding may also
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Convertible Subordinated Notes.
However, without the consent of each holder of a Convertible
Subordinated Note affected, an amendment or waiver under this Section may not:
(a) reduce the principal amount of Convertible Subordinated
Notes whose holders must consent to an amendment, supplement or waiver;
35.
(b) reduce the principal of or premium on or change the fixed
maturity of any Convertible Subordinated Note or except as permitted
pursuant to Section 9.1, alter the redemption provisions with respect
thereto;
(c) reduce the rate of, or extend the time for payment of,
interest, including defaulted interest, on any Convertible Subordinated
Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Convertible
Subordinated Notes (except a rescission of acceleration of the
Convertible Subordinated Notes by the holders of at least a majority in
aggregate principal amount of the Convertible Subordinated Notes then
outstanding and a waiver of the payment default that resulted from such
acceleration);
(e) make the principal of, or premium, if any, or interest on,
any Convertible Subordinated Note payable in money other than as
provided for herein and in the Convertible Subordinated Notes;
(f) waive a redemption payment with respect to any Convertible
Subordinated
(g) except as permitted herein, increase the Conversion Price
or except as permitted pursuant to Section 9.1, modify the provisions
contained herein relating to conversion of the Convertible Subordinated
Notes in a manner adverse to the holders thereof; or
(h) make any change in provisions relating to waivers of
defaults, or the rights of holders of Convertible Subordinated Notes to
receive payments of principal of, premium, if any, or interest on the
Convertible Subordinated Notes or the abilities of holders of
Convertible Subordinated Notes to enforce their rights hereunder or the
provisions of clauses (a) through (h) of this Section 9.2.
To secure a consent of the holders of Convertible Subordinated Notes
under this Section, it shall not be necessary for such holders to approve the
particular form of any proposed amendment or waiver, but it shall be sufficient
if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to holders of Convertible Subordinated Notes a notice briefly
describing the amendment or waiver.
In order to amend any provisions of Article 11, holders of at least 75
principal amount of Convertible Subordinated Notes then outstanding must consent
to such
36.
amendment if such amendment would adversely the rights of holders of Convertible
Subordinated Notes.
Section 9.3 Compliance With The Trust Indenture Act. Every amendment
---------------------------------------
to this Indenture or the Convertible Subordinated Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents. Until an amendment or
---------------------------------
waiver becomes effective, a consent to it by a holder of a Convertible
Subordinated Note is a continuing consent by the holder and every subsequent
holder of a Convertible Subordinated Note or portion of a Convertible
Subordinated Note that evidences the same debt as the consenting holder's
Convertible Subordinated Note, even if notation of the consent is not made on
any Convertible Subordinated Note. However, any such holder or subsequent holder
may revoke the consent as to his or her Convertible Subordinated Note or portion
of a Convertible Subordinated Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the holders of the requisite principal amount of
Convertible Subordinated Notes have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the holders of Convertible Subordinated Notes
entitled to consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
persons who were holders of Convertible Subordinated Notes at such record date
(or their duly designated proxies), and only those persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such record date. No
consent shall be valid or effective for more than 90 days after such record date
unless consents from holders of the principal amount of Convertible Subordinated
Notes required here under for such amendment or waiver to be effective shall
have also been given and not revoked within such 90 day period.
After an amendment or waiver becomes effective it shall bind every
holder of a Convertible Subordinated Note, unless it is of the type described in
clauses (a)-(h) of Section 9.2. In such case, the amendment or waiver shall bind
each holder of a Convertible Subordinated Note who has consented to it.
Section 9.5 Notation On Or Exchange Of Convertible Subordinated Notes.
---------------------------------------------------------
Con-vertible Subordinated Notes authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article 9 may, and shall if
required by the Trustee, bear a notation in the form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Convertible Subordinated Notes so modified as to conform, in
the opinion of the Company and the Trustee, to any such supplemental indenture
may be prepared and executed by the Company and
37.
authenticated and delivered by the Trustee in exchange for outstanding
Convertible Subordinated Notes.
Section 9.6 Trustee Protected. The Trustee shall sign any amendment or
-----------------
supplemental indenture authorized pursuant to this Article 9 if such amendment
or supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing such amendment or supplemental indenture, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that such
amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Trust Indenture Act Controls. If any provision of this
----------------------------
Indenture limits, qualifies or conflicts with the duties imposed by TIA Section
318(c), such imposed duties shall control. If any provision of this Indenture
expressly modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed to apply to this Indenture as
so modified or to be excluded, as the case may be.
Section 10.2 Notices. Any notice or communication by the Company or the
-------
Trustee to the other is duly given if in writing and delivered in person or
mailed by first class mail, with postage prepaid (registered or certified,
return receipt requested), facsimile or overnight air couriers guaranteeing next
day delivery, to the other's address stated in Section 10.10. The Company or the
Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.
All notices and communications (other than those sent to holders of
Convertible Subordinated Notes) shall be deemed to have been duly given at the
time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when transmission confirmed,
if transmitted by facsimile; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a holder of a Convertible Subordinated
Note shall be mailed by first class mail, with postage prepaid, to his or her
address shown on the register kept by the Registrar. Failure to mail a notice or
communication to a holder or any defect in it shall not affect its sufficiency
with respect to other holders.
38.
If a notice or communication is sent in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company sends a notice or communication to holders of Convertible
Subordinated Notes, it shall send a copy to the Trustee and each Agent at the
same time.
All other notices or communications shall be in writing.
Section 10.3 Communication by Holders With Other Holders. Holders may
-------------------------------------------
communicate pursuant to TIA Section 312(b) respect to their rights under this
Indenture or the Convertible Subordinated Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
Section 10.4 Certificate and Opinion as to Conditions Precedent. Upon
--------------------------------------------------
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 10.5) stating that, in the opinion of such person, all
conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 10.5) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
Section 10.5 Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314 (a)(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
39.
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the opinion
with respect to the matters upon which his or her certificate may be based as
aforesaid is erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, upon certificates, statements or opinions of, or
representations by an officer or officers of the Company, or other persons or
firms deemed appropriate by such counsel, unless such counsel knows that the
certificates, statements or opinions or representations with respect to the
matters upon which his or her certificate, statement or opinion may be based as
aforesaid are erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of or
representation by an accountant (who may be an employee of the Company), or firm
of accountants, unless such Officer or counsel, as the case may be, knows that
the certificate or opinion or representation with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid is erroneous.
Section 10.6 Rules by Trustee and Agents. The Trustee may make
---------------------------
reasonable rules for action by or a meeting of holders of Convertible
Subordinated Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 10.7 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday
--------------
or a day on which banking institutions in the City of New York or the City of
San Jose, California are not required to be open, and a "business day" is any
day that is not a Legal Holiday. 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. If
any date specified in this Indenture, including, without limitation, a
redemption date under Paragraph 5 of Convertible Subordinated Notes, is a Legal
Holiday, then such date shall be the next succeeding business day.
Section 10.8 No Recourse Against Others. No director, officer, employee
--------------------------
or stockholder, as such, of the Company from time to time shall have any
liability for any obligations of the Company under the Convertible Subordinated
Notes or this Indenture or for any claim based on, in respect of, or by reason
of such obligations or their creation. Each holder by accepting a Convertible
Subordinated Note waives and releases all such liability. This waiver and
release are part of the consideration for the Convertible Subordinated Notes.
Each of such directors, officers, employees and stockholders is a third party
beneficiary of this Section 10.8.
Section 10.9 Counterparts. This Indenture may be executed in any number
------------
of counterparts and by the parties hereto in separate counterparts, each of
which when so
40.
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
Section 10.10 Other Provisions. The Company initially appoints the
----------------
Trustee as Paying Agent, Registrar and authenticating agent.
The reporting date for Section 7.6 is [ ] 15 of each year. The first
reporting date is the first [ ] 15 following the issuance of Convertible
Subordinated Notes hereunder.
The Trustee shall always have, or shall be a subsidiary of a bank or
bank holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is: Leasing Solutions, Inc., 00 Xxxxxxx Xxxxxxxxx,
Xxxxx 0000, Xxx Xxxx, XX 00000-0000, Attention: Corporate Counsel, Facsimile:
(000) 000-0000, Telephone: (000) 000-0000.
The Trustee's address is:[ ], Attention: , Facsimile: , Telephone: .
Section 10.11 Governing Law. The internal laws of the State of New York
-------------
shall govern this Indenture and the Convertible Subordinated Notes, without
regard to the conflict of laws provisions thereof.
Section 10.12 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 other indenture, loan or debt agreement
may not be used to interpret this Indenture.
Section 10.13 Successors. All agreements of the Company in this
----------
Indenture and the Convertible Subordinated Notes shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 10.14 Severability. In case any provision in this Indenture or
------------
in the Convertible Subordinated Notes 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 10.15 Table of Contents, Headings, Etc. The Table of Contents,
---------------------------------
Cross Reference Table 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.
41.
ARTICLE XI
SUBORDINATION
Section 11.1 Agreement to Subordinate. The Company agrees, and each
------------------------
holder of Convertible Subordinated Notes by accepting a Convertible Subordinated
Note agrees, that the indebtedness evidenced by the Convertible Subordinated
Note is subordinated in right of payment, to the extent and in the manner
provided in this Article 11, to the prior payment in full of all Senior Debt
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
Section 11.2 Liquidation; Dissolution; Bankruptcy. Upon any
------------------------------------
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, in an assignment for the
benefit of creditors or any marshalling of the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the
rate specified in the applicable Senior Debt) in cash or U.S. Government
Obligations or other payment satisfactory to the holders of the Senior
Debt before holders of Convertible Subordinated Notes shall be entitled
to receive any payment with respect to the Convertible Subordinated
Notes (except that the holders of Convertible Subordinated Notes may
receive (i) securities that are subordinated to at least the same extent
as the Convertible Subordinated Notes to (a) Senior Debt and (b) any
securities issued in exchange for Senior Debt and (ii) payments and
other distributions made from any trust created pursuant to Section 8.1
hereof); and
(2) until all Senior Debt is paid in full in cash or U.S.
Government Obligations or other payment satisfactory to the holders of
the Senior Debt, any distribution to which holders of Convertible
Subordinated Notes would be entitled but for this Article 11 shall be
made to holders of Senior Debt (except that holders of Convertible
Subordinated Notes may receive securities that are subordinated to at
least the same extent as the Convertible Subordinated Notes to (a)
Senior Debt and (b) any securities issued in exchange for Senior Debt),
as their interests may appear.
Section 11.3 Default on Senior Debt and/or Designated Senior Debt. The
----------------------------------------------------
Company may not make any payment or distribution to the Trustee or any holder of
Convertible Subordinated Notes in respect of Obligations with respect to the
Convertible Subordinated Notes and may not acquire from the Trustee or any
holder of Convertible Subordinated Notes any Convertible Subordinated Notes
(other than, in each case, (i)
42.
securities that are subordinated to at least the same extent as the Convertible
Subordinated Notes to (a) Senior Debt and (b) any securities issued in exchange
for Senior Debt and (ii) payments and other distributions made from any trust
created pursuant to Section 8.1 hereof) until all Senior Debt has been paid in
full in cash or U.S. Government Obligations or other payment satisfactory to the
holders of Senior Debt if:
(i) a default in the payment of any principal of, premium, if
any, interest, rent or other Obligations in respect of Senior Debt
occurs and is continuing beyond any applicable grace period in the
agreement, indenture or other document governing such Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of such
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
person who may give it pursuant to Section 11.11 hereof.
If the Trustee receives any Payment Blockage Notice pursuant to Section
11.3 (ii) hereof, no subsequent Payment Blockage Notice shall be effective for
purposes of such Section unless and until (i) at least 365 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage Notice
and (ii) all scheduled payments of principal, premium, if any, and interest on
the Convertible Subordinated Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Convertible Subordinated Notes and may acquire them upon the
earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 11.3 (ii)
hereof, the earlier of the date on which such nonpayment default is
cured or waived or 179 days pass after notice is received if the
maturity of such Senior Debt has not been accelerated, if this Article
otherwise permits the payment, distribution or acquisition at the time
of such payment or acquisition.
Section 11.4 Acceleration of Convertible Subordinated Notes. In the
----------------------------------------------
event of the acceleration of the Convertible Subordinated Notes because of an
Event of Default, the Company may not make any payment or distribution to the
Trustee or any holder of Convertible Subordinated Notes in respect of
Obligations with respect to Convertible Subordinated Notes and may not acquire
or purchase from the Trustee or any holder of any Convertible Subordinated Notes
(other than, in each case, (i) securities that are subordinated to at least the
same extent as the Convertible Subordinated Notes to (a)
43.
Senior Debt and (b) any securities issued in exchange for Senior Debt, and (ii)
payments and other distributions made from any trust created pursuant to Section
8.1 until all Senior Debt has been paid in full in cash or U.S. Government
Obligations or other payment satisfactory to the holders of the Senior Debt or
such acceleration is rescinded in accordance with the terms of this Indenture.
If payment of the Convertible Subordinated Notes is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.
Section 11.5 When Distribution Must Be Paid Over. In the event that
-----------------------------------
the Trustee or any holder of Convertible Subordinated Notes receives any payment
or any distributions of assets of the Company of any kind with respect to the
Convertible Subordinated Notes, whether in cash, property or securities,
including without limitation by way of set off or otherwise, at a time when
payment or distribution is prohibited by this Indenture, such payment shall be
held by the Trustee or such holder, in trust for the benefit of, and shall be
paid forthwith over and delivered, to the extent necessary to make payment in
full of any Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt; provided that the
foregoing shall apply to the Trustee only if the Trustee has actual knowledge
(as determined in accordance with Section 11.11) that such payment or
distribution is prohibited by this Indenture.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 11, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of holders of Convertible
Subordinated Notes or the Company or any other person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this Article 11,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
Section 11.6 Notice by Company. The Company shall promptly notify the
-----------------
Trustee of any facts known to the Company that would cause a payment of any
Obligations with respect to the Convertible Subordinated Notes or to the
purchase of any Convertible Subordinated Notes by the Company to violate this
Article, but failure to give such notice shall not affect the subordination of
the Convertible Subordinated Notes to the Senior Debt as provided in this
Article.
Section 11.7 Subrogation. After all Senior Debt is paid in full and
-----------
until the Convertible Subordinated Notes are paid in full, holders of
Convertible Subordinated Notes shall be subrogated (equally and ratably with all
other indebtedness pari passu with the Convertible Subordinated Notes) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the holders of
Convertible Subordinated Notes have been applied to the payment of Senior Debt.
A distribution made under this Article to holders of Senior Debt that otherwise
44.
would have been made to holders of Convertible Subordinated Notes is not, as
between the Company and holders of Convertible Subordinated Notes, a payment by
the Company on the Convertible Subordinated Notes.
Section 11.8 Relative Rights. This Article defines the relative rights
---------------
of holders of Convertible Subordinated Notes and holders of Senior Debt. Nothing
in this Indenture shall:
(1) impair, as between the Company and holders of Convertible
Subordinated Notes, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Convertible
Subordinated Notes in accordance with their terms;
(2) affect the relative rights of holders of Convertible
Subordinated Notes and creditors (other than with respect to Senior
Debt) of the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Trustee or any holder of Convertible
Subordinated Notes from exercising its available remedies upon a Default
or Event of Default, subject to the rights of holders and owners of
Senior Debt to receive distributions and payments otherwise payable to
holders of Convertible Subordinated Notes.
If the Company fails because of this Article to pay principal of or
interest on a Convertible Subordinated Note on the due date, the failure is
still a Default or Event of Default.
Section 11.9 Subordination May Not Be Impaired By Company. No right of
--------------------------------------------
any holder of Senior Debt to enforce the subordination of the indebtedness
evidenced by the Convertible Subordinated Notes shall be impaired by any act or
failure to act by the Company or any holder of Convertible Subordinated Notes or
by the failure of the Company or any such holder to comply with this Indenture.
Section 11.10 Distribution or Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the holders of Convertible Subordinated Notes
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the holders of Convertible Subordinated Notes for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or
45.
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 11.
Section 11.11 Rights of Trustee and Paying Agent. Notwithstanding the
----------------------------------
provisions of this Article 11 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee (other
than pursuant to Section 11.4), and the Trustee may continue to make payments on
the Convertible Subordinated Notes, unless the Trustee shall have received at
least two business days prior to the date of such payment or distribution
written notice of facts that would cause such payment or distribution with
respect to the Convertible Subordinated Notes to violate this Article. Only the
Company or a Representative may give the notice.
Nothing in this Article 11 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
Section 11.12 Authorization to Effect Subordination. Each holder of a
-------------------------------------
Convertible Subordinated Note by the holder's acceptance thereof authorizes and
directs the Trustee on the holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 11, and appoints the Trustee to act as the holder's attorney in fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.9 hereof at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Debt or their Representatives are hereby
authorized to file an appropriate claim for and on behalf of the holders of the
Convertible Subordinated Notes.
Section 11.13 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 shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that the second and third
paragraphs of Section 11.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 11.14 Senior Debt Entitled to Rely. The holders of Senior Debt
----------------------------
shall have the right to rely upon this Article 11, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
46.
ARTICLE XII
CONVERSION OF CONVERTIBLE SUBORDINATED NOTES
Section 12.1 Right to Convert. Subject to and upon compliance with the
----------------
provisions of this Indenture, each holder of Convertible Subordinated Notes
shall have the right, at his or her option, at any time after the date 60 days
following the last Issue Date of the Notes and prior to the close of business on
the last trading day prior to the Maturity Date (except that, with respect to
any Convertible Subordinated Note or portion of a Convertible Subordinated Note
which is called for redemption, such right shall terminate, except as provided
in the fourth paragraph of Section 12.2, at the close of business on the last
trading day prior to the date fixed for redemption of such Convertible
Subordinated Note or portion of a Convertible Subordinated Note unless the
Company defaults in the payment due upon redemption thereof and such right shall
terminate with respect to any Convertible Subordinated Note or portion thereof
subject to a duly completed election for repurchase unless the Company defaults
in the payment due upon repurchase or such holder elects to withdraw the
submission of such election to repurchase on or prior to the close of business
on the Change of Control Purchase Date) to convert the principal amount of any
Convertible Subordinated Note held by such holder, or any portion of such
principal amount which is $1,000 or an integral multiple thereof, into that
number of fully paid and non assessable shares of Common Stock (as such shares
shall then be constituted) obtained by dividing the principal amount of the
Convertible Subordinated Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Convertible
Subordinated Note so to be converted in whole or in part in the manner provided
in Section 12.2. A holder of Convertible Subordinated Notes is not entitled to
any rights of a holder of Common Stock until such holder of Convertible
Subordinated Notes has converted his or her Convertible Subordinated Notes to
Common Stock, and only to the extent such Convertible Subordinated Notes are
deemed to have been converted to Common Stock under this Article 12.
Section 12.2 Exercise of Conversion Privilege; Issuance of Common
----------------------------------------------------
Stock on Conversion; No Adjustment for Interest or Dividends. To exercise, in
------------------------------------------------------------
whole or in part, the conversion privilege with respect to any Convertible
Subordinated Note, the holder of such Convertible Subordinated Note shall
surrender such Convertible Subordinated Note, duly endorsed, at an office or
agency maintained by the Company pursuant to Section 4.4, accompanied by the
funds, if any, required by the penultimate paragraph of this Section 12.2, and
shall give written notice of conversion in the form provided on the Convertible
Subordinated Notes (or such other notice which is acceptable to the Company) to
the office or agency that the holder of Convertible Subordinated Notes elects to
convert such Convertible Subordinated Note or such portion thereof specified in
said notice. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
which are issuable on such conversion shall be issued, and shall be accompanied
by transfer taxes, if required pursuant to Section 12.7. Each such Convertible
Subordinated Note surrendered for conversion shall, unless the
47.
shares issuable on conversion are to be issued in the same name as the
registration of such Convertible Subordinated Note, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder of Convertible Subordinated Notes or his or her duly
authorized attorney.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above the Company shall issue and shall deliver to such
holder at the office or agency maintained by the Company for such purpose
pursuant to Section 4.4, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Convertible
Subordinated Note or portion thereof in accordance with the provisions of this
Article 12 and a check or cash in respect of any fractional interest in respect
of a share of Common Stock arising upon such conversion, as provided in Section
12.3 (which payment, if any, shall be paid no later than five business days
after satisfaction of the requirements for conversion set forth above). In case
any Convertible Subordinated Note of a denomination of an integral multiple
greater than $1,000 is surrendered for partial conversion, and subject to
Section 2.2, the Company shall execute, and the Trustee shall authenticate and
deliver to the holder of the Convertible Subordinated Note so surrendered,
without charge to him or her, a new Convertible Subordinated Note or Convertible
Subordinated Notes in authorized denominations in an aggregate principal amount
equal to the unconverted portion of the surrendered Convertible Subordinated
Note.
Each conversion shall be deemed to have been effected as to any such
Convertible Subordinated Note (or portion thereof) on the date on which the
requirements set forth above in this Section 12.2 have been satisfied as to such
Convertible Subordinated Note (or portion thereof), and the person in whose name
any certificate or certificates for shares of Common Stock are issuable upon
such conversion shall be deemed to have become on said date the holder of record
of the shares represented thereby; provided, however, that any such surrender on
any date when the Company's stock transfer books are closed shall constitute the
person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock transfer
books are open, but such conversion shall be at the Conversion Price in effect
on the date upon which such Convertible Subordinated Note is surrendered.
Any Convertible Subordinated Note or portion thereof surrendered for
conversion during the period from the close of business on the record date for
any interest payment through the close of business on the trading day next
preceding such interest payment date shall (unless such Convertible Subordinated
Note or portion thereof being converted has been called for redemption on a date
after such record date and on or before the succeeding interest payment date) be
accompanied by payment, in funds acceptable to the Company, of an amount equal
to the interest otherwise payable on such interest payment date on the principal
amount being converted; provided, however, that no such payment need be made if
there exists at the time of conversion a default in the payment of interest on
the Convertible Subordinated Notes. An amount equal to such payment shall be
paid by the Company on such interest payment date to the holder of such
Convertible
48.
Subordinated Note at the close of business on such record date; provided,
however, that if the Company defaults in the payment of interest on such
interest payment date, such amount shall be paid to the person who made such
required payment. Except as provided above in this Section 12.2, no adjustment
shall be made for interest accrued on any Convertible Subordinated Note
converted or for dividends on any shares issued upon the conversion of such
Convertible Subordinated Note as provided in this Article 12.
Section 12.3 Cash Payments in Lieu of Fractional Shares. No
------------------------------------------
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Convertible Subordinated Notes. If more than one
Convertible Subordinated Note shall be surrendered for conversion at one time by
the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Convertible Subordinated Notes (or specified portions thereof to the extent
permitted hereby) so surrendered for conversion. If any fractional share of
stock otherwise would be issuable upon the conversion of any Convertible
Subordinated Note or Convertible Subordinated Notes, the Company shall make an
adjustment therefor in cash based upon the Current Market Price of the Common
Stock on the last trading day of conversion.
Section 12.4 Conversion Price. The conversion price shall be as
----------------
specified in the form of Convertible Subordinated Note attached as Exhibit A
---------
hereto, subject to adjustment as provided in this Article 12.
Section 12.5 Adjustment of Conversion Price. The Conversion Price
------------------------------
shall be adjusted from time to time by the Company as follows:
(a) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of
Common Stock, the Conversion Price in effect at the opening of business
on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the Record Date (as defined in
Section 12.5(g)) fixed for such determination and the denominator shall
be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day
following the Record Date. If any dividend or distribution of the type
described in this Section 12.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price
which would then be in effect if such dividend or distribution had not
been declared.
(b) If the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price (as defined in Section 12.5(g)) on
the Record Date fixed for the determination of
49.
stockholders entitled to receive such rights or warrants, the Conversion
Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening
of business on the date after such Record Date plus the number of shares
which the aggregate offering price of the total number of shares 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
the close of business on the Record Date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date plus the total number of
additional shares of Common Stock so offered for subscription or
purchase. Such adjustment shall become effective immediately after the
opening of business on the day following the Record Date fixed for
determination of stockholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not delivered
pursuant to such rights or warrants, upon the expiration or termination
of such rights or warrants the Conversion Price shall be readjusted to
the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. If such rights
or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if
such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market Price,
and in determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received for
such rights or warrants, with the value of such consideration, if other
than cash, to be determined by the Board of Directors.
(c) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, if the outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common
Stock, the Conversion Price in effect at the opening of business on the
day following the day upon which such combination becomes effective
shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(d) If the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of
capital stock of the Company (other than any dividends or distributions
to which Section 12.5(a) applies) or evidences of its indebtedness, cash
or other assets (including securities, but excluding any rights or
warrants of a type referred to in Section 12.5(b) and dividends and
50.
distributions paid exclusively in cash and excluding any capital stock,
evidences of indebtedness, cash or assets distributed upon a merger or
consolidation to which Section 12.6 applies) (the foregoing hereinafter
in this Section 12.5(d) called the "Securities")), then, in each such
case, the Conversion Price shall be reduced so that the same shall be
equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record Date (as
defined in Section 12.5(g)) with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price
(determined as provided in Section 12.5(g)) on such date less the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors) on such date of the portion of the Securities so
distributed applicable to one share of Common Stock and the denominator
shall be such Current Market Price, such reduction to become effective
immediately prior to the opening of business on the day following the
Record Date; provided, however, that in the event the then fair market
value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each holder of
Convertible Subordinated Notes shall have the right to receive upon
conversion of a Convertible Subordinated Note (or any portion thereof)
the amount of Securities such holder would have received had such holder
converted such Convertible Subordinated Note (or portion thereof)
immediately prior to such Record Date. If such dividend or distribution
is not so paid or made, the Conversion Price shall again be adjusted to
be the Conversion Price which would then be in effect if such dividend
or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of
this Section 12.5(d) by reference to the actual or when issued trading
market for any securities comprising all or part of such distribution,
it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price pursuant to Section
12.5(g) to the extent possible.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"): (i) are deemed to be
transferred with such shares of Common Stock; (ii) are not exercisable;
and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this
Section 12.5 (d) (and no adjustment to the Conversion Price under this
Section 12.5(d) shall be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment to the Conversion
Price under this Section 12.5(d) shall be made. If any such rights
(including the Rights), or warrants, including any such existing rights
or warrants distributed prior to the date of this Indenture (including
the Rights), are
51.
subject to subsequent events, upon the occurrence of each of which such
rights or warrants shall become exercisable to purchase different
securities, evidences of indebtedness or other assets, then the
occurrence of each such event shall be deemed to be such date of
issuance and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants (including
the Rights), or any Trigger Event with respect thereto, that was counted
for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 12.5 was made, (1)
in the case of any such rights (including the Rights) or warrants which
shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such
final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price
received by a holder or holders of Common Stock with respect to such
rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of such rights or warrants
(including the Rights) which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
Notwithstanding any other provision of this Section 12.5(d) to
the contrary, rights, warrants, evidences of indebtedness, other
securities, cash or other assets (including, without limitation, any
rights distributed pursuant to any stockholder rights plan) shall be
deemed not to have been distributed for purposes of this Section 12.5(d)
if the Company makes proper provision so that each holder of Convertible
Subordinated Notes who converts a Convertible Subordinated Note or any
portion thereof) after the date fixed for determination of stockholders
entitled to receive such distribution shall be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable upon
such conversion, the amount and kind of such distributions that such
holder would have been entitled to receive if such holder had,
immediately prior to such determination date, converted such Convertible
Subordinated Note into Common Stock.
For purposes of this Section 12.5(d) and Sections 12.5(a) and
(b), any dividend or distribution to which this Section 12.5(d) is
applicable that also includes shares of Common Stock, or rights or
warrants to subscribe for or purchase shares of Common Stock to which
Section 12.5(b) applies (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets,
shares of capital stock, rights or warrants other than such shares of
Common Stock or rights or warrants to which Section 12.5(b) applies (and
any Conversion Price
52.
reduction required by this Section 12.5(d) with respect to such dividend
or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights
or warrants (and any further Conversion Price reduction required by
Sections 12.5(a) and (b) with respect to such dividend or distribution
shall then be made, except that (a) the Record Date of such dividend or
distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution", "Record Date fixed for such determination" and "Record
Date" within the meaning of Section 12.5(a) and as "the date fixed for
the determination of stockholders entitled to receive such rights or
warrants", "the Record Date fixed for the determination of the
stockholders entitled to receive such rights or warrants" and "such
Record Date" within the meaning of Section 12.5(b) and (b) any shares of
Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 12.5(a).
(e) If the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed upon a merger or consolidation to which Section 12.6
applies or as part of a distribution referred to in Section 12.5(d)) in
an aggregate amount that, combined together with (1) the aggregate
amount of any other such distributions to all holders of its Common
Stock made exclusively in cash within the 12 months preceding the date
of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 12.5(e) has been made, and (2) the aggregate of
any cash plus the fair market value as determined by the Board of
Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) of consideration payable in
respect of any tender offer by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of such distribution, and in
respect of which no adjustment pursuant to Section 12.5(f) has ben made,
exceeds [15%] of the product of the Current Market Price (determined as
provided in Section 12.5(g)) on the Record Date with respect to such
distribution times the number of shares of Common Stock outstanding on
such date, then, and in each such case, immediately after the close of
business on such date, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on such
Record Date by a fraction (i) the numerator of which shall be equal to
the Current Market Price on the Record Date less an amount equal to the
quotient of (x) the excess of such combined amount over such [15%] and
(y) the number of shares of Common Stock outstanding on the Record Date
and (ii) the denominator of which shall be equal to the Current Market
Price on such Record Date; provided, however, that if the portion of the
cash so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each holder of Convertible Subordinated Notes
shall have the right to receive upon conversion of a Convertible
Subordinated Note (or any portion thereof) the amount of cash such
holder would have received had such holder converted such Convertible
53.
Subordinated Note (or portion thereof) immediately prior to such Record
Date. If such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not
been declared. Any cash distribution to all holders of Common Stock as
to which the Company makes the election permitted by Section 12.5(m) and
as to which the Company has complied with the requirements of such
Section shall be treated as not having been made for all purposes of
this Section 12.5(e).
(f) For purposes of this Section 12.5, the following terms
shall have the meaning indicated :
(1) "closing price" with respect to any securities
on any day means the closing price on such day or, if no such
sale takes place on such day, or, if no such sale takes place on
such day, the average of the reported high and low prices on
such day, in each case on The Nasdaq Stock Market or New York
Stock Exchange, as applicable, or, if such security is not
listed or admitted to trading on such national market or
exchange, on the principal national securities exchange or
quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system,
the average of the high and low prices of such security on the
over the counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available,
in such manner as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors
for that purpose, or a price determined in good faith by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors.
(2) "Current Market Price" means the average of
the daily closing prices per share of Common Stock for the 10
consecutive trading days immediately prior to the date in
question; provided, however, that (1) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Sections 12.5(a),
(b), (c), (d) or (e) occurs during such 10 consecutive trading
days, the closing price for each trading day prior to the "ex"
date for such other event shall be adjusted by multiplying such
closing price by the same fraction by which the Conversion Price
is so required to be adjusted as a result of such other event,
(2) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12.5(a),
(b), (c), (d) or (e) occurs on or after the "ex" date for the
issuance or distribution requiring such computation and prior to
the day in question, the closing price for each trading day on
and after the "ex" date for such other event shall be adjusted
by multiplying such closing price by the reciprocal of the
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (3) if the "ex"
date for the issuance or distribution requiring such computation
is prior to the day in
54.
question, after taking into account any adjustment required
pursuant to clause (1) or (2) of this proviso, the closing price
for each trading day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair
market value (as determined by the Board of Directors in a
manner consistent with any determination of such value for
purposes of Section 12.5(d), whose determination shall be
conclusive and described in a resolution of the Board of
Directors) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such
"ex" date. For purposes of this paragraph, the term "ex" date,
(1) when used with respect to any issuance or distribution,
means the first date on which the Common Stock trades regular
way on the relevant exchange or in the relevant market from
which the closing price was obtained without the right to
receive such issuance or distribution, (2) when used with
respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades
regular way on such exchange or in such market after the time at
which such subdivision or combination becomes effective, and (3)
when used with respect to any tender or exchange offer means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the Expiration Time of such
offer. Notwithstanding the foregoing, whenever successive
adjustments to the Conversion Price are called for pursuant to
this Section 12.5, such adjustments shall be made to the Current
Market Price as may be necessary or appropriate to effectuate
the intent of this Section 12.5 and to avoid unjust or
inequitable results as determined in good faith by the Board of
Directors.
(3) "fair market value" shall mean the amount
which a willing buyer would pay a willing seller in an arm's
length transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date
fixed for determination of stockholders entitled to receive such
cash, securities or other property (whether such date is fixed
by the Board of Directors or by statute, contract or otherwise).
55.
(5) "trading day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York Stock
Exchange or another national securities exchange, a day on which
the New York Stock Exchange or another national securities
exchange is open for business or (y) if the applicable security
is quoted on The Nasdaq Stock Market, a day on which trades may
be made thereon or (z) if the applicable security is not so
listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or
executive order to close.
(g) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 12.5(a), (b), (c), (d)
and (e), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or
rights to acquire stock) or from any event treated as such for income
tax purposes.
To the extent permitted by applicable law, the Company from time
to time may reduce the Conversion Price by any amount for any period of
time if the period is at least 20 days, the reduction is irrevocable
during the period and the Board of Directors has made a determination
that such reduction would be in the Company's best interests, which
determination shall be conclusive and described in a resolution of the
Board of Directors. whenever the Conversion Price is reduced pursuant to
the preceding sentence, the Company shall mail to the holders of
Convertible Subordinated Note at his or her last address appearing on
the register of holders maintained for that purpose a notice of the
reduction at least 15 days prior to the date the reduced Conversion
Price takes effect, and such notice shall state the reduced Conversion
Price and the period during which it will be in effect.
(h) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least
1% in such price; provided, however, that any adjustments which by
reason of this Section 12.5(h) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Article 12 shall be made by the Company and
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 change in the par value or no
par value of the Common Stock.
(i) whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers' Certificate setting
forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.
56.
Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the
Conversion Price to each holder of Convertible Subordinated Notes at his
or her last address appearing on the register of holders maintained for
that purpose within 20 days of the effective date of such adjustment.
Failure to deliver such notice shall not affect the legality or validity
of any such adjustment.
(j) In any case in which this Section 12.5 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event issuing
to the holder of any Convertible Subordinated Note converted after such
Record Date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment.
(k) For purposes of this Section 12.5, the number of shares
of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company shall not pay any dividend or make any distribution
on shares of Common Stock held in the treasury of the Company.
(l) In lieu of making any adjustment to the Conversion
Price pursuant to Section 12.5(e), the Company may elect to reserve an
amount of cash for distribution to the holders of Convertible
Subordinated Notes upon the conversion of the Convertible Subordinated
Notes so that any such holder converting Convertible Subordinated Notes
will receive upon such conversion, in addition to the shares of Common
Stock and other items to which such holder is entitled, the full amount
of cash which such holder would have received if such holder had,
immediately prior to the Record Date for such distribution of cash,
converted its Convertible Subordinated Notes into Common Stock, together
with any interest accrued with respect to such amount, in accordance
with this Section 12.5(l). The Company may make such election by
providing an Officers' Certificate to the Trustee to such effect on or
prior to the payment date for any such distribution and depositing with
the Trustee on or prior to such date an amount of cash equal to the
aggregate amount that the holders of Convertible Subordinated Notes
would have received if such holders had, immediately prior to the Record
Date for such distribution, converted all of the Convertible
Subordinated Notes into Common Stock. Any such funds so deposited by the
Company with the Trustee shall be invested by the Trustee in U.S.
Government Obligations with a maturity not more than three (3) months
from the date of issuance. Upon conversion of Convertible Subordinated
Notes by a holder thereof, such holder shall be entitled to receive, in
addition to the Common Stock
57.
issuable upon conversion, an amount of cash equal to the amount such
holder would have received if such holder had, immediately prior to the
Record Date for such distribution, converted its Convertible
Subordinated Note into Common Stock, along with such holder's pro rata
share of any accrued interest earned as a consequence of the investment
of such funds. Promptly after making an election pursuant to this
Section 12.5(l), the Company shall give or shall cause to be given
notice to all holders of Convertible Subordinated Notes of such
election, which notice shall state the amount of cash per $1,000
principal amount of Convertible Subordinated Notes such holders shall be
entitled to receive (excluding interest) upon conversion of the
Convertible Subordinated Notes as a consequence of the Company having
made such election.
Section 12.6 Effect of Reclassification, Consolidation, Merger or
----------------------------------------------------
Sale. If any of the following events occur: (i) any reclassification or change
----
of the outstanding shares of Common Stock (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), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the TIA as in force at the date of execution of such
supplemental indenture if such supplemental indenture is then required to so
comply) providing that the Convertible Subordinated Notes shall be convertible
into the kind and amount of shares of stock and other securities or property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of the Convertible
Subordinated Notes (assuming, for such purposes, a sufficient number of
authorized shares of Common Stock available to convert all such Convertible
Subordinated Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise his or her rights of election, if any, as to the
kind or amount of securities, cash or other property receivable upon such
consolidation, merger, Statutory exchange, sale or conveyance (provided that, if
the kind or amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election have
not been exercised ("non electing share"), then, for the purposes of this
Section 12.6, the kind and amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance for each non electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as
58.
may be practicable to the adjustments provided for in this Article 12. If, in
the case of any such reclassification, change, consolidation, merger,
combination, sale or conveyance, the stock or other securities and assets
receivable thereupon by a holder of shares of Common Stock includes shares of
stock or other securities and assets of a corporation other than the successor
or purchasing corporation, as the case may be, in such reclassification, change,
consolidation, merger, combination, sale or conveyance, then such supplemental
indenture shall also be executed by such other corporation and shall contain
such additional provisions to protect the interests of the holders of the
Convertible Subordinated Notes as the Board of Directors shall reasonably
consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Convertible Subordinated Notes at his
or her address appearing on the register of holders for that purpose within 20
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section 12.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 12.6 applies to any event or occurrence, Section 12.5
shall not apply.
Section 12.7 Taxes on Shares Issued. The issue of stock certificates
----------------------
on conversions of Convertible Subordinated Notes shall be made without charge to
the converting holder for any tax in respect of the issue thereof. The Company
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of stock in any name other
than that of the holder of any Convertible Subordinated Note converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
Section 12.8 Reservation of Shares; Shares To Be Fully Paid; Listing
-------------------------------------------------------
of Common Stock. The Company shall provide, free from preemptive rights, out of
---------------
its authorized by unissued shares or sharers held in treasury, sufficient shares
to provide for the conversion of the Convertible Subordinated Notes from time to
time as such Convertible Subordinated Notes are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Convertible Subordinated Notes, the Company
shall take all corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue shares of such
Common Stock at such adjusted Conversion Price.
59.
The Company covenants that all shares of Common Stock issued upon
conversion of Convertible Subordinated Notes will be fully paid and non
assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company further covenants that as long as the Common Stock is quoted
on the Nasdaq National market, or its successor, or all Common Stock issuable
upon conversion of the Convertible Subordinated Notes shall be eligible for such
quotation and if at any time the Common Stock is listed on the New York Stock
Exchange or any other national securities exchange, list and keep listed, all
Common Stock issuable upon conversion of the Convertible Subordinated Notes.
Section 12.9 Responsibility of Trustee. The Trustee shall not at any
-------------------------
time be under any duty of responsibility to any holders of Convertible
Subordinated Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Convertible Subordinated Note; and the Trustee makes no
representations with respect thereto. Subject to the provisions of Section 7.1,
the Trustee shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Convertible
Subordinated Note for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this Article
12. Without limiting the generality of the foregoing, the Trustee shall not have
any responsibility to determine the correctness of any provisions contained in
any supplemental indenture entered into pursuant to Section 12.6 relating either
to the kind or amount of shares of stock or securities or property (including
cash) receivable by holders of Convertible Subordinated Notes upon the
conversion of their Convertible Subordinated Notes after any event referred to
in such Section 12.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 7.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 12.10 Notice to Holders Prior to Certain Actions. If (a) the
------------------------------------------
Company declares a dividend (or any other distribution) on its Common Stock
(other than in cash out of retained earnings or other than a dividend that
results in an adjustment in the Conversion Price pursuant to Section 12.5 as to
which the Company has made an election in accordance with Section 12.5(l)); or
60.
(b) the Company authorizes the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any
share of any class of Common Stock or any other rights or warrants; or
(c) there is any reclassification of the Common Stock
(other than a subdivision or combination of outstanding Common Stock, or
a change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required, or of the sale or transfer of all or substantially
all of the assets of the Company; or
(d) there is any voluntary or involuntary dissolution,
liquidation or winding up of the Company ;
then the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Convertible Subordinated Notes at his or her address appearing on
the register maintained for that purpose as promptly as possible but in any
event at least 15 days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation &r winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
61.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
LEASING SOLUTIONS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
BANKERS TRUST, as Trustee
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
62.
EXHIBIT A
(Face of Security)
[If Global Security insert - UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
LEASING SOLUTIONS, INC.
% CONVERTIBLE SUBORDINATED NOTE DUE 2003
No. $ CUSIP ________
Leasing Solutions, Inc., a California corporation, promises to pay to
[ ] or registered assigns, the principal sum of [ ] Dollars on [_________,]
2003.
Interest Payment Dates: [ ] 1 and [ ] 1
Regular Record Dates: [ ] 15 and [ ] 15
Date: ___________________ LEASING SOLUTIONS, INC.
By_____________________________________
President and Chief Executive Officer
By_____________________________________
Secretary
(SEAL)
63.
Certificate of Authentication
This is one of the Convertible Subordinated Notes described in the within
mentioned Indenture.
[ ]
as Trustee
By:
----------------------------
Authorized Signatory
64.
(Back of Security)
LEASING SOLUTIONS, INC.
[ ]% CONVERTIBLE SUBORDINATED NOTE DUE 2003
1. INTEREST. Leasing Solutions, Inc., a California corporation (the
"Company"), promises to pay interest on the principal amount of this Convertible
Subordinated Note at the rate per annum shown above. The Company will pay
interest semiannually on [ ] 1 and [ ] 1 of each year. Interest on the
Convertible Subordinated Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from [ ], 1996.
Interest will be computed on the basis of a 360 day year composed of twelve 30
day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Convertible Subordinated Notes (except defaulted interest) to the person in
whose name each Convertible Subordinated Note is registered at the close of
business on the [ ] 15 or [ ] 15 immediately preceding the relevant
interest payment date (each a "Regular Record Date") (other than with respect to
a Convertible Subordinated Note or portion thereof called for redemption on a
redemption date, or repurchased in connection with a Change of Control Purchase
Date, during the period from the close of business on a Regular Record Date to
(but excluding) the next succeeding interest payment date (in which case accrued
interest shall be payable (unless such Convertible Subordinated Note is
converted) to the holder of the Convertible Subordinated Note or portion thereof
redeemed or repurchased in accordance with the applicable redemption or
repurchase provisions of the Indenture). Holder must surrender Convertible
Subordinated Notes to a Paying Agent to collect principal payments. 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. However, the
Company may pay principal and interest by check payable in such money, and may
mail such check to the holder's registered address. For interest payments on a
Note of U.S. $5,000,000 dollars or more in principal amount, the holder of such
Note may elect at any time to have payment made by transfer to a United States
Dollar account.
3. PAYING AGENT AND REGISTRAR. Bankers Trust (together with any
successor Trustee under the Indenture referred to below, the "Trustee"), will
act as Paying Agent and Registrar. The Company may change the Paying Agent,
Registrar or coregistrar without prior notice. Subject to certain limitations in
the Indenture, the Company or any of its subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Convertible Subordinated Notes
under an Indenture dated as of [ ], 1996 (the "Indenture") between the
Company and
65.
the Trustee. The terms of the Convertible Subordinated Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa 77bbbb as in effect on
the date of the Indenture (the "TIA"). The Convertible Subordinated Notes are
subject to, and qualified by, all such terms, certain of which are summarized
here on , and holders are referred to the Indenture and the TIA for a statement
of such terms. The Convertible Subordinated Notes are unsecured general
obligations of the Company limited to (except as otherwise provided in the
Indenture) up to $62,500,000 in aggregate principal amount, unless an election
has been made as set forth in Article 2 of the Indenture to increase such
aggregate principal amount by an amount not to exceed $71,875,000. Capitalized
terms not defined below have the same meaning as is given to them in the
Indenture.
5. OPTIONAL REDEMPTION The Company shall not have the option to
redeem the Convertible Subordinated Notes prior to [ ], 1999. Thereafter,
the Company shall have the option to redeem the Convertible Subordinated Notes,
in whole or from time to time in part, at the following redemption prices
(expressed as percentages of principal amount), plus accrued and unpaid interest
to, but excluding, the date fixed for redemption if redeemed during the 12 month
period beginning [ ] of each year indicated:
Redemption Year Price
1999 %
2000 %
2001 %
2002 %
2003 100%
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 20 days but not more than 60 days before the date fixed for redemption to
each holder of Convertible Subordinated Notes to be redeemed at his or her
registered address. Convertible Subordinated Notes in denominations larger than
$1,000 may be redeemed in part but only in integral multiples of $1,000. In the
event of a redemption of less than all of the Convertible Subordinated Notes,
the Convertible Subordinated Notes will be chosen for redemption by the Trustee
by lot or pro rata or, if required, in compliance with the requirements of the
principal national securities exchange, if any, on which the Convertible
Subordinated Notes are listed. On and after the redemption date interest ceases
to accrue on Convertible Subordinated Notes or portions of them called for
redemption (unless the Company defaults in the payment of the redemption price).
If this Convertible
66.
Subordinated Note is redeemed on a date which is also an Interest Payment Date,
the interest payment due on such date will be paid to the person in whose name
this Convertible Subordinated Note is registered at the close of business on
such record date.
7. CHANGE OF CONTROL. Upon a Change of Control, any holder of Notes
will have the right to cause the Company to repurchase all or any part of the
Notes of such holder at a repurchase price equal to 100% of the principal amount
of the Notes to be repurchased plus accrued interest to the date of repurchase
as provided in, and subject to the terms of, the Indenture.
8. SUBORDINATION. The Company's payment of the principal of,
premium, if any, and interest on the Convertible Subordinated Notes (including,
without limitation, any amounts paid by the Company to purchase or repurchase
any Convertible Subordinated Notes) is subordinated to the prior payment in full
of the Company's Senior Debt as set forth in the Indenture. Each holder of
Convertible Subordinated Notes by his or her acceptance hereof covenants and
agrees that all payments of the principal of, premium, if any, and interest on
the Convertible Subordinated Notes (including, without limitation, any amounts
paid by the Company to purchase or repurchase any Convertible Subordinated
Notes) by the Company shall be subordinated in accordance with the provisions of
Article 11 of the Indenture, and each holder of Convertible Subordinated Notes
accepts and agrees to be bound by such provisions.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible Subordinated
Notes are in registered form without coupons in denominations of $1,000 and
integral multiples of $1,000. The transfer of Convertible Subordinated Notes may
be registered and Convertible Subordinated Notes may be exchanged as provided in
the Indenture. As a condition of transfer, the Registrar may require a holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a holder to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not exchange or register the
transfer of any Convertible Subordinated Note or portion of a Convertible
Subordinated Note selected for redemption or submitted for repurchase. Also, it
need not exchange or register the transfer of any Convertible Subordinated Note
for a period of 15 days before a selection of Convertible Subordinated Notes to
be redeemed.
10. PERSONS DEEMED OWNERS. The registered holder of a Convertible
Subordinated Note may be treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Convertible Subordinated Notes may be amended with the consent
of the holders of at least a majority in principal amount of the then
outstanding Convertible Subordinated Notes and any existing default may be
waived with the consent of the holders of a majority in principal amount of the
then outstanding Convertible Subordinated Notes.
67.
Without the consent of any holder, the Indenture or the Convertible
Subordinated Notes may be amended to: (a) cure any ambiguity, defect or
inconsistency; (b) provide for uncertificated Convertible Subordinated Notes in
addition to or in place of certificated Convertible Subordinated Notes; (c)
provide for the assumption of the Company's obligations to holders of
Convertible Subordinated Notes in the event of consolidation, merger or sale of
all or substantially all of the assets of the Company; (d) provide for
conversion rights of holders of Notes in certain events such as a consolidation,
merger or sale of all or substantially all of the assets of the Company; (e)
reduce the Conversion Price; (f) make any change or add to the covenants of the
Company for the benefit of the holders of Convertible Subordinated Notes; or (g)
comply with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA.
Without the consent of each holder affected, amendment or waiver may not
(with respect to any Convertible Subordinated Notes held by a non consenting
holder): (a) reduce the principal amount of Convertible Subordinated Notes whose
holders must consent to an amendment, supplement or waiver; (b) reduce the
principal or change the fixed maturity of any Convertible Subordinated Note or
except as permitted pursuant to the immediately preceding paragraph alter the
provisions with respect to the redemption of the Convertible Subordinated Notes;
(c) reduce the rate of or change the time for payment of interest on any
Convertible Subordinated Notes; (d) waive a Default or Event of Default in the
payment of principal or premium, if any, or interest on the Convertible
Subordinated Notes (except a rescission of acceleration of the Convertible
Subordinated Notes by the holders of at least a majority in aggregate principal
amount of the Convertible Subordinated Notes and a waiver of the payment default
that resulted from such acceleration); (e) make any Convertible Subordinated
Note payable in money other than that stated in the Convertible Subordinated
Notes; (f) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of holders of Convertible Subordinated
Notes to receive payments of principal of, premium, if any, or interest on the
Convertible Subordinated Notes; (g) waive a redemption payment with respect to
any Convertible Subordinated Note; (h) make any change in the foregoing
amendment and waiver provisions or; (i) except as permitted by the Indenture,
increase the Conversion Price or except as permitted pursuant to the immediately
preceding paragraph modify the provisions of the Indenture relating to the
conversion of the Convertible Subordinated Notes in a manner adverse to the
holders thereof. In addition, any amendment to the provisions of Article 11 of
the Indenture (which relate to subordination) will require the consent of the
holders of at least 75 in aggregate principal amount of the Convertible
Subordinated Notes then outstanding if such amendment would adversely affect the
rights of holders of Convertible Subordinated Notes.
12. DEFAULTS AND REMEDIES. An Event of Default is: (a) default in
payment of the principal of, or premium, if any, on the Convertible Subordinated
Notes, whether or not such payment is prohibited by the subordination
68.
provisions of the Indenture; (b) default for 30 days in payment of any
installment of interest on the Convertible Subordinated Notes, whether or not
such payment is prohibited by the subordination provisions of the Indenture; (c)
default by to the Company for 90 days after notice in the observance or
performance of any other covenants in the Indenture; (d) default in the payment
of the Change of Control purchase price in respect of the Convertible
Subordinated Note on the date therefor, whether or not such payment is
prohibited by the subordination provisions of the Indenture; (e) failure to
provide timely notice of a Change of Control; or (f) certain events involving
bankruptcy, insolvency or reorganization of the Company or any Material
Subsidiary. If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the then outstanding Convertible
Subordinated Notes may declare all the Convertible Subordinated Notes to be due
and payable immediately, except that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, all outstanding Convertible
Subordinated Notes become due and payable without further action or notice.
Holders of Convertible Subordinated Notes may not enforce the Indenture or the
Convertible Subordinated Notes except as provided in the Indenture. The Trustee
may require an indemnity satisfactory to it before it enforces the Indenture or
the Convertible Subordinated Notes. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Convertible Subordinated
Notes 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 must furnish annual compliance certificates to the
Trustee.
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or guaranteed by, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
stockholder, as such, of the Company shall have any liability for any
obligations of the Company under the Convertible Subordinated Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each holder by accepting a Convertible
Subordinated Note waives and releases all such liability. The waiver and release
are part of the consideration for the Convertible Subordinated Notes.
15. AUTHENTICATION. This Convertible Subordinated Note shall not be
valid until authenticated by the manual signature of the Trustee or an
authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name
of a holder or an assignee, such as: TEN CO = tenants in common, TENANT =
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.
17. CONVERSIONS. Subject to and upon compliance with the provisions
of the Indenture, the registered holder of this Convertible Subordinated Note
has the right at any time prior to the close of business on the last trading day
prior to _________, 2003 (or in
69.
case this Convertible Subordinated Note or any portion hereof shall be called
for redemption prior to such date, then on or prior to the close of business on
the last trading day preceding the date fixed for redemption), to convert the
principal amount hereof, or any portion of such principal amount which is $1,000
or an integral multiple thereof, into that number of fully paid and
nonassessable whole shares of common stock of the Company ("Common Stock")
obtained by dividing the principal amount of the Convertible Subordinated Note
or portion thereof to be converted by the conversion price of $[ ] per share, as
adjusted from time to time as provided in the Indenture (the "Conversion
Price"), upon surrender of this Convertible Subordinated Note to the Company at
the office or agency maintained for such purpose (and at such other offices or
agencies designated for such purpose by the Company), accompanied by written
notice of conversion duly executed (and if the shares of Common Stock to be
issued on conversion are to be issued in any name other than that of the
registered holder of this Convertible Subordinated Note) by instruments of
transfer, in form satisfactory to the Company, duly executed by the registered
holder or its duly authorized attorney) and, in case such surrender shall be
made during the period starting after the close of business on the Regular
Record Date immediately preceding any Interest Payment Date through the close of
business on the last trading day preceding such Interest Payment Date (unless
this Convertible Subordinated Note or the portion thereof being converted is
subject to redemption on a redemption date in that period), also accompanied by
payment in funds acceptable to the Company of an amount equal to the interest
otherwise payable on such Interest Payment Date on the principal amount of this
Convertible Subordinated Note then being converted. Subject to the aforesaid
requirement for a payment in the event of conversion after the close of business
on a Regular Record Date immediately preceding an Interest Payment Date, no
payment or adjustment shall be made on conversion for interest accrued hereon or
for dividends on Common Stock delivered on conversion. The right to convert this
Convertible Subordinated Note is subject to the provisions of the Indenture
relating to conversion rights in the case of certain consolidations, mergers, or
sales or transfers of substantially all the Company's assets.
The Company shall not issue fractional shares or scrip representing
fractions of shares of Common Stock upon any such conversion, but shall make an
adjustment therefor in cash on the basis of the then current market value of
such fractional interest as provided in the Indenture.
The Company will furnish to any holder upon written request and without
charge a copy of the Indenture. Requests may be made to: General Counsel,
Leasing Solutions, Inc., 00 Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000-
2238.
70.
FORM OF CONVERSION NOTICE
To: LEASING SOLUTIONS, INC.
The undersigned registered owner of the Convertible Subordinated Note hereby
irrevocably exercises the option to convert this Convertible Subordinated Note,
or portion hereof (which is $1,000 or an integral multiple thereof) below
designated, into shares of Common Stock of Leasing Solutions, Inc. in accordance
with the terms of the Indenture referred to in this Convertible Subordinated
Note, and directs that the shares issuable and deliverable upon the conversion,
together with any check in payment for fractional shares and Convertible
Subordinated Notes representing any unconverted principal amount hereof, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below. If shares or any portion of this Convertible subordinated
Note not converted are to be issued in the name of person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest and taxes accompanies this Convertible subordinated Note.
Dated:
------------------------- -------------------------------------
Signature (s)
Fill in for registration of shares
if to be delivered, and Convertible
Subordinated Notes if to be issued, Principal amount to be converted
other than to and in the name of the (if less than all): U.S.$_________
registered holder
(Please Print):
-----------------------------------
(Name)
-----------------------------------
(Street address)
-----------------------------------
(City, State and zip code)
Social Security or other Taxpayer Identification Number:
----------------------
Signature Guarantee:
-----------------------
71.
ASSIGNMENT FORM
If you the holder want to assign this Convertible subordinated Note, fill in the
form below and have your Signature guaranteed:
I or we assign and transfer this Convertible subordinated Note to
--------------------------------------------------------------------------------
(Insert assignees social security or tax ID number)
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Convertible Subordinated Note on the books of the
Company. The agent may substitute another to act for him.
Date: Your Signature:
------------------- ----------------------------------
(Sign exactly as your name appears
on the other side of this
Convertible Subordinated Note)
Signature Guarantee:
--------------------------------------------
72.
OPTION OF HOLDER TO ELECT REPURCHASE
If you wish to have this Convertible Subordinated Note repurchased by the
Company pursuant to Section 4.6 of the Indenture, check the Box: [_]
If you wish to have a portion of this Convertible Subordinated Note purchased by
the Company pursuant to Section 4.6 of the Indenture, state the amount (in
multiples of $1,000): $ _______________
Date: Your Signature:
------------------ -------------------------
(Sign exactly as your name appears on the
other side of this Convertible Subordinated Note)
Signature Guarantee:
-------------------------
73.
