Exhibit 4.3
THIS NOTE AND ANY CLASS A COMMON SHARES ISSUABLE UPON THE CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THIS NOTE AND ANY CLASS A COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON THAT THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS
OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT THAT PRIOR TO SUCH TRANSFER PROVIDES TO THE TRUSTEE FOR THE NOTES
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE NOTES (THE FORM OF THE LETTER CAN BE
OBTAINED FROM THE TRUSTEE FOR THE NOTES), (4) PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO SKECHERS U.S.A., INC.) OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.
THIS NOTE, ANY CLASS A COMMON SHARES ISSUABLE UPON ITS CONVERSION
AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME
TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY
SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
1
NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY
THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS
SECURITY FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
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.
2
SKECHERS U.S.A., INC.
4.50% CONVERTIBLE SUBORDINATED NOTE DUE APRIL 15, 2007
NO. 1 U.S. $75,000,000
CUSIP NO. 000000XX0
Skechers U.S.A., Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company," which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of seventy five million United States Dollars (U.S.
$75,000,000) (which principal amount may from time to time be increased or
decreased to such other principal amounts (which, taken together with the
principal amounts of all other Outstanding Securities, shall not exceed
$110,000,000 in the aggregate at any time, unless the Initial Purchaser
exercises its over-allotment rights, in which case the principal amount of the
Outstanding Securities shall not exceed U.S. $125,000,000) by adjustments made
on the records of the Trustee hereinafter referred to in accordance with the
Indenture) on April 15, 2007, unless redeemed or repurchased on an earlier date,
and to pay interest thereon, from April 9, 2002, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly
provided for, semiannually in arrears on April 15 and October 15 in each year
(each, an "Interest Payment Date"), commencing October 15, 2002, at the rate of
4.50% per annum, until the principal hereof is due, and at the rate then in
effect on any overdue principal and premium, if any, and, to the extent
permitted by law, on any overdue interest. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the April 1 and
October 1 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Except as otherwise provided in the Indenture, any
such interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Company, notice
whereof shall be given to Holders of Registered Securities not less than ten
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payments of
principal shall be made upon the surrender of this Security at the option of the
Holder at the Corporate Trust Office or at such other office or agency of the
Company as may be designated by it for such purpose in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, or at such other offices or agencies as the Company may
designate, by United States Dollar check drawn on, or wire transfer to, a United
States Dollar account (such a wire transfer to be made only to a Holder of an
aggregate principal amount of Registered Securities in excess of U.S.$2,000,000
and only if such Holder shall have furnished wire instructions in writing to the
Trustee no later than 15 days prior to the relevant payment date) maintained by
the payee. Payment of interest on this Security may
3
be made by United States Dollar check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or, upon
written application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by wire transfer to a
United States dollar account (such a wire transfer to be made only to a Holder
of an aggregate principal amount of Registered Securities in excess of
U.S.$2,000,000 and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the payee.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
4
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
SKECHERS U.S.A., INC.
By: /s/ XXXXXXX XXXXXXXXX
-----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
Attest:
/s/ XXXXXX XXXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxxx
Dated: April 9, 2002
This is one of the Securities referred to in the within-mentioned
Indenture.
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
By: /s/ XXXXXX XXX
------------------------------
Authorized Signatory
5
[REVERSE OF NOTE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "4.50% Convertible Subordinated Notes due April 15,
2007" (herein called the "Securities"), limited in aggregate principal amount to
U.S. $75,000,000 (U.S. $90,000,000 if the over-allotment is fully exercised),
issued and to be issued under an Indenture, dated as of April 9, 2002 (herein
called the "Indenture"), between the Company and Xxxxx Fargo Bank, National
Association, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the holders of Senior Debt and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. As provided in the Indenture and subject to certain limitations set
forth therein, Registered Securities are exchangeable for a like aggregate
principal amount of Registered Securities of any authorized denominations as
requested by the Holder surrendering the same upon surrender of the Registered
Security or Registered Securities to be exchanged at the Corporate Trust Office.
The Trustee upon such surrender by the Holder will issue the new Registered
Securities in the requested denominations.
No sinking fund is provided for the Securities.
The Securities are subject to redemption at the option of the
Company at any time on or after April 15, 2005, in whole or in part, upon not
less than 30 nor more than 60 days' notice to the Holders prior to the
Redemption Date at the following Redemption Prices (expressed as percentages of
the principal amount) for the twelve-month period beginning on April 15 of the
following years (April 15, 2005 through April 15, 2006 in the case of the first
of such periods):
YEAR REDEMPTION PRICE
---- ----------------
2005.............................................................. 101.80%
2006.............................................................. 100.90%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together, in each case, with accrued interest to, but excluding the Redemption
Date; provided, however, that interest installments on Securities whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.
The Securities are subject to redemption at the option of the
Company at any time before April 15, 2005 ("Provisional Redemption"), in whole
or in part, upon not less than 30 nor more than 60 days' notice to the Holders
prior to the Redemption Date at a Redemption Price equal to 100% of the
principal amount, together, in each case, with accrued interest and Liquidated
Damages, if any, to, but excluding, the Redemption Date, if (a) the closing
price of the Company's Common Stock has exceeded 150% of the Conversion Price
then in effect for at least 20 trading days within a period of 30 consecutive
trading days ending on the trading day
6
immediately before the date of mailing of the notice of the Provisional
Redemption, and (b) the Shelf Registration Statement is effective and available
for use and is expected to remain effective and available for use for the 30
days following the Redemption Date, unless registration is no longer required.
Upon any Provisional Redemption, the Company will pay to the Holders cash or
Common Stock, or in a combination of cash and Common Stock, with respect to the
Securities called for Provisional Redemption, and previously converted after the
notice of Provisional Redemption and before to the date of the Provisional
Redemption, in an amount equal to $135.00 per $1,000 principal amount of the
Securities, less the amount of any interest paid on the Securities before the
date of the Provisional Redemption. For purposes of any such payment in Common
Stock, the value of such Common Stock will be at 95% of the average of the
closing sales prices of the Company's Common Stock for each of the five trading
days ending with the third trading day immediately prior to the Redemption Date.
In the event of a redemption of the Securities, the Company will not
be required (a) to register the transfer or exchange of Registered Securities
for a period of 15 days immediately preceding the date notice is given
identifying the serial numbers of the Securities called for such redemption (it
being understood that the Company will not be required to identify the serial
numbers of Outstanding Securities if all such Securities are called for
redemption) or (b) to register the transfer or exchange of any Registered
Security, or portion thereof, called for redemption.
Notice to the Holders will be given not less than 30 nor more than
60 days prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal of,
premium, if any, Liquidated Damages, if any, or interest on any Security or the
last day on which a Holder of a Security has a right to convert his Security
shall be, at any Place of Payment or Place of Conversion, as the case may be, a
day on which banking institutions at such Place of Payment or Place of
Conversion are authorized or obligated by law or executive order to close, then
payment of principal, premium, if any, Liquidated Damages, if any, or interest
or delivery for conversion of such Security need not be made on or by such date
at such place but may be made on or by the next succeeding day at such place
which is not a day on which banking institutions are authorized or obligated by
law or executive order to close, with the same force and effect as if made on
the date for such payment or the date fixed for redemption or repurchase, or by
such last day for conversion, and no interest shall accrue on the amount so
payable for the period from and after such due date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time following
the original issue date of the Securities and on or before the close of business
on April 15, 2007, or in case this Security or a portion hereof is called for
redemption or the Holder hereof has exercised his right to require the Company
to repurchase this Security or such portion hereof, then in respect of this
Security until and including, but (unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be) not after, the
close of business on the Business Day immediately preceding the Redemption Date
or the Repurchase Date, as the case may be, to convert this Security or any
portion of the principal amount hereof that is an integral multiple of
U.S.$1,000 (provided that the unconverted portion of such principal amount is
U.S.$1,000 or any integral
7
multiple of U.S.$1,000 in excess thereof) into fully paid and nonassessable
shares of Common Stock of the Company at an initial Conversion Rate of 38.5089
(or at the current adjusted Conversion Rate if an adjustment has been made as
provided in the Indenture) by surrender of this Security, duly endorsed or
assigned to the Company or in blank and, in case such surrender shall be made
during the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date (except if this Security has been called for redemption on a
Redemption Date or is repurchasable on a Repurchase Date, with the consequence
that the conversion right of such Security would terminate between such Regular
Record Date and the close of business on such Interest Payment Date), also
accompanied by payment in New York Clearing House or other funds acceptable to
the Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of this Security then being converted, and also the
conversion notice hereon duly executed, to the Company at the Corporate Trust
Office, or at such other office or agency of the Company, subject to any laws or
regulations applicable thereto and subject to the right of the Company to
terminate the appointment of any Conversion Agent (as defined below) as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate (each a
"Conversion Agent"), provided, further, that in case surrender of this Security
for conversion shall be made during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date and if this Security or portion hereof
has been called for redemption on a Redemption Date or is repurchasable on a
Repurchase Date, with the consequence that the conversion right of such Security
would terminate between such Regular Record Date and the close of business on
such Interest Payment Date, then the Holder of this Security will be entitled to
receive the interest accruing hereon from the Interest Payment Date next
preceding the date of such conversion to such succeeding Interest Payment Date
and shall not be required to pay such interest upon surrender of this Security
for conversion. Subject to the provisions of the preceding sentence and, in the
case of a conversion after the close of business on the Regular Record Date next
preceding any Interest Payment Date and on or before the close of business on
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security of record as of such Regular Record Date) to receive the
related installment of interest to the extent and under the circumstances
provided in the Indenture, no cash payment or adjustment is to be made on
conversion for interest accrued hereon from the Interest Payment Date next
preceding the day of conversion, or for dividends on the Common Stock issued on
conversion hereof. The Company shall thereafter deliver to the Holder the fixed
number of shares of Common Stock (together with any cash adjustment or rights or
warrants, as provided in the Indenture) into which this Security is convertible
and such delivery will be deemed to satisfy the Company's obligation to pay the
principal amount of this Security. No fractions of shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional
interest (calculated to the nearest 1/100th of a share) the Company shall pay a
cash adjustment as provided in the Indenture. The Conversion Rate is subject to
adjustment as provided in the Indenture. In addition, the Indenture provides
that in case of certain consolidations or mergers to which the Company is a
party or the conveyance, transfer, sale or lease of all or substantially all of
the property and assets of the Company, the Indenture shall be amended, without
the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other
8
property receivable upon such consolidation, merger, conveyance, transfer, sale
or lease by a holder of the number of shares of Common Stock of the Company into
which this Security could have been converted immediately prior to such
consolidation, merger, conveyance, transfer, sale or lease (assuming such holder
of Common Stock is not a Constituent Person, failed to exercise any rights of
election and received per share the kind and amount received per share by a
plurality of Non-electing Shares). No adjustment in the Conversion Rate will be
made until such adjustment would require an increase or decrease of at least one
percent of such rate, provided that any adjustment that would otherwise be made
will be carried forward and taken into account in the computation of any
subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when
the Company is not subject to Section 13 or 15(d) of the United States
Securities Exchange Act of 1934, as amended, upon the request of a Holder of a
Security or the holder of shares of Common Stock issued upon conversion thereof,
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder of Securities or such holder of shares of
Common Stock issued upon conversion of Securities, or to a prospective purchaser
of any such security designated by any such Holder or holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"),
in connection with the resale of any such security. "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d) (4) under the
Securities Act (or any successor provision thereto).
The Holder of this Security (including any Person that has a
beneficial interest in this Security) and the Common Stock issuable upon
conversion hereof is entitled to the benefits of a Registration Rights
Agreement, dated as of April 9, 2002 (the "Registration Rights Agreement"),
executed by the Company. Pursuant to the Registration Rights Agreement, the
Company has agreed for the benefit of the Holders from time to time of
Registered Securities and the Common Stock issuable upon conversion thereof, in
each case, that are Registrable Securities, at the Company's expense, (a) to
file on or before 90 days after the first date of original issuance of the
Securities, a shelf registration statement (the "Shelf Registration Statement")
with the Commission with respect to resales of the Registrable Securities, (b)
thereafter to use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission on or before 180 days after
the first date of original issuance of the Securities, subject to the Company's
right to postpone having the Shelf Registration Statement declared effective for
an additional 60 days in limited circumstances described in the Registration
Rights Agreement, and (c) to use its reasonable best efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act
until the earlier of (1) the sale under the Shelf Registration Statement of all
the Registrable Securities registered thereunder and (2) the expiration of the
holding period applicable to such Registrable Securities held by persons that
are not affiliates of the Company under Rule 144(k) under the Securities Act or
any successor previously subject to specific permitted exceptions. The Company
is required to pay Liquidated Damages to holders of Registrable Securities for
failure to comply with the foregoing registration obligations, all as more fully
set forth in the Registration Rights Agreement.
Whenever in this Security there is a reference, in any context, to
the payment of the principal of, premium, if any, or interest on, or in respect
of, any Security such mention shall
9
be deemed to include mention of the payment of Liquidated Damages payable as
described in the Registration Rights Agreement to the extent that, in such
context, Liquidated Damages are, were or would be payable in respect of this
Security pursuant to the Registration Rights Agreement, and an express mention
of the payment of Liquidated Damages (if applicable) in any provisions of this
Security shall not be construed as excluding Liquidated Damages in those
provisions of this Security where such express mention is not made. If the
Holder of this Security (including any Person that has a beneficial interest in
this Security) elects to sell this Security pursuant to the Shelf Registration
Statement then, by its acceptance hereof, such Holder of this Security agrees to
be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities which are the subject of such election.
If a Change in Control occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is equal to U.S.$1,000 or any greater integral
multiple of U.S.$1,000) for cash at a Repurchase Price equal to 100% of the
principal amount thereof plus interest accrued to, but excluding, the Repurchase
Date. At the option of the Company, the Repurchase Price may be paid in cash or,
subject to the conditions provided in the Indenture, by delivery of shares of
Common Stock or in a combination of cash and Common Stock, having a fair market
value equal to the Repurchase Price. For purposes of this paragraph, the fair
market value of shares of Common Stock shall be determined by the Company and
shall be equal to 95% of the average of the high and low sales price per share
for the five consecutive Trading Days immediately preceding and including the
third Trading Day prior to the Repurchase Date. Whenever in this Security there
is a reference, in any context, to the principal of any Security as of any time,
such reference shall be deemed to include reference to the Repurchase Price
payable in respect of such Security to the extent that such Repurchase Price is,
was or would be so payable at such time, and express mention of the Repurchase
Price in any provision of this Security shall not be construed as excluding the
Repurchase Price so payable in those provisions of this Security when such
express mention is not made; provided, however, that, for the purposes of the
paragraph below concerning the consequences of an Event of Default, such
reference shall be deemed to include reference to the Repurchase Price only to
the extent the Repurchase Price is payable in cash.
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the Applicable Procedures.
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full in cash or Cash Equivalents of all Senior
Debt of the Company, and this Security is issued subject to such provisions of
the Indenture with respect thereto. Each Holder of this Security, by accepting
the same,
(a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and
10
(c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the principal
of all the Securities, together with accrued interest to the date of
declaration, may be declared due and payable in the manner and with the effect
provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable, together with accrued interest to the date of
declaration, and (ii) of interest on any overdue principal and, to the extent
permitted by applicable law, overdue interest, all of the Company's obligations
in respect of the payment of the principal of and interest on the Securities
shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the written consent of the Holders
of a majority in principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, the Trustee
shall have failed to institute any such proceeding for 60 days after receipt of
such notice, request and offer of indemnity, and the Trustee has not received
any direction inconsistent with such written request from the Holders of a
majority of the aggregate principal amount of the Outstanding Securities during
such 60 day period. The foregoing shall not apply to any suit instituted by the
Holder of this Security for the enforcement of any payment of principal hereof,
premium, if any, Liquidated Damages, if any, or interest hereon on or after the
respective due dates expressed herein or for the enforcement of the right to
convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, Liquidated Damages, if any, and interest on this Security at the times,
places and rate, and in the coin or currency, herein prescribed or to convert
this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Registered Securities is registrable on the
Security Register upon surrender of a Registered Security for registration of
transfer at the Corporate Trust Office of the Trustee or at
11
such other office or agency of the Company as may be designated by it for such
purpose in the Borough of Manhattan, The City of New York, or at such other
offices or agencies as the Company may designate, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing, and thereupon one or more new Registered
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees by the
Registrar. No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to recover
any tax or other governmental charge payable in connection therewith.
Prior to due presentation of a Registered Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Registered Security is
registered as the owner thereof for all purposes, whether or not such Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months. The Indenture and this Security shall be
governed by and construed in accordance with the laws of the State of New York,
United States of America, including, without limitation, Section 5-1401 of the
New York General Obligations Law.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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