EXHIBIT 4.1
EXECUTION COPY
--------------------------------------------------------------------------------
KELLWOOD COMPANY
TO
UNION BANK of CALIFORNIA, N.A.
as Trustee
---------------------------------------------------
INDENTURE
Dated as of
June 22, 2004
------------------------------------------------
3.50% CONVERTIBLE SENIOR DEBENTURES DUE 2034
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
--------------------------- -----------------
Section 310(a)(1)...................................................... 8.09
(a)(2)...................................................... 8.09
(a)(3)...................................................... N.A.
(a)(4)...................................................... N.A.
(a)(5)...................................................... N.A.
(b)......................................................... 8.08
(c)......................................................... N.A.
Section 311(a)......................................................... 8.13
(b)......................................................... 8.13
(c)......................................................... N.A.
Section 312(a)......................................................... 6.01; 6.02
(b)......................................................... N.A.
(c)......................................................... N.A.
Section 313(a)......................................................... 6.03
(b)......................................................... N.A.
(c)......................................................... 6.03
(d)......................................................... 6.03
Section 314(a)......................................................... 6.04
(b)......................................................... N.A.
(c)(1)...................................................... 16.05
(c)(2)...................................................... 16.05
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e)......................................................... 16.05
(f)......................................................... N.A.
Section 315(a)......................................................... 8.01; 8.02
(b)......................................................... 7.08
(c)......................................................... 7.06
(d)......................................................... 8.01; 806
(e)......................................................... 7.09
Section 316(a)(1)...................................................... 7.07
(a)(2)...................................................... 11.02
(b)......................................................... N.A.
(c)......................................................... 9.01
Section 317(a)(1)...................................................... 7.02
(a)(2)...................................................... 7.02
(b)......................................................... 5.04
Section 318(a)......................................................... 16.08
N.A. means not applicable.
*This Cross-Reference Table shall not, for any purpose, be deemed to be part of
this Indenture.
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions............................................................... 2
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.01. Designation Amount and Issue of Debentures................................ 12
Section 2.02. Form of Debentures........................................................ 12
Section 2.03. Date and Denomination of Debentures; Payments of Interest................. 14
Section 2.04. Execution of Debentures................................................... 15
Section 2.05. Exchange and Registration of Transfer of Debentures; Restrictions
on Transfer............................................................... 16
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures........................... 24
Section 2.07. Temporary Debentures...................................................... 25
Section 2.08. Cancellation of Debentures................................................ 25
Section 2.09. CUSIP Numbers............................................................. 26
Section 2.10. Ranking................................................................... 26
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Company's Right to Redeem................................................. 26
Section 3.02. Notice of Optional Redemption; Selection of Debentures.................... 27
Section 3.03. Payment of Debentures Called for Redemption by the Company................ 29
Section 3.04. [Reserved]................................................................ 29
Section 3.05. Repurchase of Debentures by the Company at Option of Holders upon a
Fundamental Change........................................................ 30
Section 3.06. Repurchase of Debentures by the Company at Option of Holders on
Specified Dates........................................................... 32
Section 3.07. [Reserved]................................................................ 34
Section 3.08. Conditions and Procedures for Repurchase at Option of Holders............. 35
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest....................................................... 37
Section 4.02. Payment of Contingent Interest............................................ 38
Section 4.03. Contingent Interest Notification.......................................... 38
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal and Interest......................................... 39
Section 5.02. Maintenance of Office or Agency........................................... 39
Section 5.03. Appointments to Fill Vacancies in Trustee's Office........................ 39
Section 5.04. Provisions as to Paying Agent............................................. 39
Section 5.05. Existence................................................................. 41
Section 5.06. Rule 144A Information Requirement......................................... 41
Section 5.07. Stay, Extension and Usury Laws............................................ 41
Section 5.08. Compliance Certificate.................................................... 42
Section 5.09. Additional Amounts Notice................................................. 42
Section 5.10. Contingent Debt Tax Treatment............................................. 42
Section 5.11. Calculation of Original Issue Discount.................................... 43
ARTICLE 6
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Debentureholders' Lists................................................... 43
Section 6.02. Preservation and Disclosure of Lists...................................... 43
Section 6.03. Reports by Trustee........................................................ 44
Section 6.04. Reports by Company........................................................ 44
ARTICLE 7
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default......................................................... 44
Section 7.02. Payments of Debentures on Default; Suit Therefor.......................... 47
Section 7.03. Application of Monies Collected by Trustee................................ 49
Section 7.04. Proceedings by Debentureholder............................................ 50
Section 7.05. Proceedings by Trustee.................................................... 51
Section 7.06. Remedies Cumulative and Continuing........................................ 51
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of
Debentureholders.......................................................... 51
Section 7.08. Notice of Defaults........................................................ 52
Section 7.09. Undertaking to Pay Costs.................................................. 52
ii
ARTICLE 8
THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee.................................... 53
Section 8.02. Reliance on Documents, Opinions, Etc...................................... 54
Section 8.03. No Responsibility for Recitals, Etc....................................... 56
Section 8.04. Trustee, Paying Agents, Bid Solicitation Agents, Conversion Agents or
Registrar May Own Debentures.............................................. 56
Section 8.05. Monies to Be Held in Trust................................................ 56
Section 8.06. Compensation and Expenses of Trustee...................................... 56
Section 8.07. Officers' Certificate as Evidence......................................... 57
Section 8.08. Conflicting Interests of Trustee.......................................... 57
Section 8.09. Eligibility of Trustee.................................................... 57
Section 8.10. Resignation or Removal of Trustee......................................... 57
Section 8.11. Acceptance by Successor Trustee........................................... 59
Section 8.12. Succession by Merger...................................................... 60
Section 8.13. Preferential Collection of Claims......................................... 60
ARTICLE 9
THE DEBENTUREHOLDERS
Section 9.01. Action by Debentureholders................................................ 60
Section 9.02. Proof of Execution by Debentureholders.................................... 61
Section 9.03. Who Are Deemed Absolute Owners............................................ 61
Section 9.04. Company-owned Debentures Disregarded...................................... 61
Section 9.05. Revocation of Consents, Future Holders Bound.............................. 62
ARTICLE 10
MEETINGS OF DEBENTUREHOLDERS
Section 10.01. Purpose of Meetings...................................................... 62
Section 10.02. Call of Meetings by Trustee.............................................. 63
Section 10.03. Call of Meetings by Company or Debentureholders.......................... 63
Section 10.04. Qualifications for Voting................................................ 63
Section 10.05. Regulations.............................................................. 64
Section 10.06. Voting................................................................... 64
Section 10.07. No Delay of Rights by Meeting............................................ 65
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Debentureholders.............. 65
Section 11.02. Supplemental Indenture with Consent of Debentureholders.................. 66
Section 11.03. Effect of Supplemental Indenture......................................... 67
Section 11.04. Notation on Debentures................................................... 68
iii
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished
to Trustee............................................................... 68
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate on Certain Terms................................. 68
Section 12.02. Successor to Be Substituted.............................................. 69
Section 12.03. Opinion of Counsel to Be Given Trustee................................... 70
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture................................................... 70
Section 13.02. Paying Agent to Repay Monies Held........................................ 71
Section 13.03. Return of Unclaimed Monies............................................... 71
ARTICLE 14
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Debentures Solely Corporate Obligations.................... 71
ARTICLE 15
CONVERSION OF DEBENTURES
Section 15.01. Right to Convert......................................................... 71
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends...................... 75
Section 15.03. Payment Upon Conversion; Cash Payments in Lieu of Fractional Shares...... 77
Section 15.04. Conversion Rate.......................................................... 80
Section 15.05. Adjustment of Conversion Rate............................................ 80
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale................ 87
Section 15.07. Taxes on Shares Issued................................................... 88
Section 15.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock....................... 89
Section 15.09. Responsibility of Trustee................................................ 90
Section 15.10. Notice to Holders Prior to Certain Actions............................... 90
Section 15.11. Shareholder Rights Plan.................................................. 91
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.01. Provisions Binding On Company's Successors............................... 91
Section 16.02. Official Acts By Successor Corporation................................... 92
Section 16.03. Addresses for Notices, Etc............................................... 92
Section 16.04. Governing Law............................................................ 92
iv
Section 16.05. Evidence of Compliance with Conditions Precedent, Certificates
to Trustee............................................................... 92
Section 16.06. Legal Holidays........................................................... 93
Section 16.07. Company Responsible for Making Calculations.............................. 93
Section 16.08. Trust Indenture Act...................................................... 93
Section 16.09. No Security Interest Created............................................. 94
Section 16.10. Benefits of Indenture.................................................... 94
Section 16.11. Table of Contents, Headings, Etc......................................... 94
Section 16.12. Authenticating Agent..................................................... 94
Section 16.13. Execution in Counterparts................................................ 95
Section 16.14. Severability............................................................. 95
Exhibit A Form of Debenture A-1
v
INDENTURE
INDENTURE dated as of June 22, 2004 between Kellwood Company, a
Delaware corporation (hereinafter called the "COMPANY"), having its principal
office at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, and Union Bank of
California, N.A., as trustee hereunder (hereinafter called the "TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3.50% Convertible Senior Debentures due 2034
(hereinafter called the "DEBENTURES"), in an aggregate Original Principal Amount
not to exceed $180,000,000 (or up to $200,000,000 if the Initial Purchasers'
option set forth in the Purchase Agreement is exercised in full), and, to
provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of fundamental change repurchase
election, a form of Company repurchase election and a form of conversion notice
to be borne by the Debentures are to be substantially in the forms hereinafter
provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities Act as in force at the date of the execution of this Indenture.
The words "HEREIN", "HEREOF", "HEREUNDER" and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
"ACCRETED PRINCIPAL AMOUNT" means for any Debenture as of any date of
determination, the sum of (i) the Original Principal Amount of such Debenture
and (ii) the portion of the excess of the Accreted Principal Amount at Stated
Maturity of such Debenture over such Original Principal Amount which shall have
been accreted thereon through such date, such amount to be accreted on a daily
basis at the Applicable Yield for such Debenture, compounded semiannually on
each Interest Payment Date through the date of determination and computed on the
basis of a 360-day year of twelve 30-day months.
"ACCRETED PRINCIPAL AMOUNT AT STATED MATURITY" means $2,221.18 per
$1,000 Original Principal Amount of Debentures unless, the Debentures are
earlier redeemed, purchased or converted.
"ADDITIONAL AMOUNTS" has the meaning specified for "ADDITIONAL AMOUNTS"
in Section 2(e) of the Registration Rights Agreement.
"ADDITIONAL AMOUNTS NOTICE" has the meaning specified in Section 5.09.
"ADDITIONAL SHARES" has the meaning specified in Section 15.01(d).
"ADJUSTMENT EVENT" has the meaning specified in Section 15.05(l).
"AGENT MEMBERS" has the meaning specified in Section 2.05(b).
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and
2
the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"APPLICABLE FIVE-DAY TRADING PERIOD" means, with respect to any
Contingent Interest Period as to which Contingent Interest may be payable, the
five Trading Days immediately preceding the first day of such Contingent
Interest Period.
"APPLICABLE YIELD" means (1) prior to June 15, 2011, 0% per annum, and
(2) from and after June 15, 2011 and until June 14, 2034, a rate per annum equal
to 3.50%.
"BID SOLICITATION AGENT" means such Person (other than any Affiliate of
the Company) as the Company may designate as Bid Solicitation Agent from time to
time, and shall initially mean the Trustee.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"BUSINESS DAY" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York
or the city in which the Corporate Trust Office of the Trustee is located.
"CAPITAL STOCK" of any Person means any and all shares (including
ordinary shares or American Depositary Shares), interests, participations or
other equivalents however designated of corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person and any rights (other than debt securities convertible or
exchangeable into an equity interest), warrants or options to acquire an equity
interest in such Person.
"CASH AMOUNT" has the meaning specified in Section 15.03(a).
"CASH SETTLEMENT AVERAGING PERIOD" has the meaning specified in Section
15.03(a).
"CASH SETTLEMENT NOTICE PERIOD" has the meaning specified in Section
15.03(a).
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"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
3
Company and which is not subject to redemption by the Company. Subject to the
provisions of Section 15.06, however, shares issuable on conversion of
Debentures shall include only shares of the class designated as common stock of
the Company at the date of this Indenture (namely, the Common Stock, par value
of $0.01 per share) or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable on conversion 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 corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 12 and
Section 15.06, shall include its successors and assigns.
"COMPANY REPURCHASE DATE" has the meaning specified in Section 3.06(a).
"COMPANY REPURCHASE ELECTION" has the meaning specified in Section
3.06(c).
"COMPANY REPURCHASE NOTICE" has the meaning specified in Section
3.06(b).
"COMPANY REPURCHASE PRICE" has the meaning specified in Section
3.06(a).
"CONTINGENT INTEREST" has the meaning specified in Section 4.01.
"CONTINGENT INTEREST PERIOD" means the period commencing on June 20,
2011 and ending December 14, 2011 and thereafter any six-month period from
December 15 to June 14 or from June 15 to December 14, commencing on or after
December 15, 2011 and ending before June 15, 2034.
"CONTINUING DIRECTOR" means a director who was a member of the Board of
Directors on the date of this Indenture or who becomes a director subsequent to
such date and whose election, appointment or nomination for election by the
shareholders of the Company is duly approved by a majority of the continuing
directors on the Board of Directors at the time of such approval, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the entire Board of Directors in which such individual is named as
nominee for director.
4
"CONVERSION AGENT" means the Trustee or such other office or agency
designated by the Company where Debentures may be presented for conversion.
"CONVERSION DATE" has the meaning specified in Section 15.02.
"CONVERSION OBLIGATION" has the meaning specified in Section 15.03(a).
"CONVERSION PRICE" as of any day means the Accreted Principal Amount
divided by the Conversion Rate as of such date and rounded to the nearest cent.
The initial Conversion Price shall initially be $53.35 per share of Common
Stock.
"CONVERSION RATE" has the meaning specified in Section 15.04.
"CONVERSION RETRACTION PERIOD" has the meaning specified in Section
15.03(a).
"CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be principally administered,
which office is, at the date as of which this Indenture is dated, located at 000
X. Xxx Xxxxx Xx., Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000 or at any other
address as the Trustee may designate from time to time by notice to the holders.
"CUSTODIAN" means Union Bank of California, N.A., as custodian with
respect to the Debentures in global form, or any successor entity thereto.
"DEBENTURE" or "DEBENTURES" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.
"DEBENTURE REGISTER" has the meaning specified in Section 2.05.
"DEBENTURE REGISTRAR" has the meaning specified in Section 2.05.
"DEBENTUREHOLDER" or "HOLDER" as applied to any Debenture, or other
similar terms (but excluding the term "beneficial holder"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.
"DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEPOSITARY" means the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Debentures. The
Depository Trust Company shall be the initial Depositary, until a successor
shall
5
have been appointed and become such pursuant to the applicable provisions of
this Indenture, and thereafter, "DEPOSITARY" shall mean or include such
successor.
"DETERMINATION DATE" has the meaning specified in Section 15.05(l).
"EFFECTIVE DATE" has the meaning specified in Section 15.01(b).
"EVENT OF DEFAULT" means any event specified in Section 7.01 as an
Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"EX-DIVIDEND DATE" means, with respect to any issuance or distribution
on shares of Common Stock, the first date upon which a sale of the Common Stock
does not automatically transfer the right to receive such issuance or
distribution from the seller of the Common Stock to the buyer.
"EXPIRATION TIME" has the meaning specified in Section 15.05(e).
"FINAL NOTICE DATE" has the meaning specified in Section 15.03(a).
"FUNDAMENTAL CHANGE" means the occurrence of any of the following:
(i) a "person" or "group" within the meaning of Section 13(d) of the
Exchange Act other than the Company, its subsidiaries or its or their employee
benefit plans, files a Schedule TO or any other schedule, form or report under
the Exchange Act disclosing that such person or group has become the direct or
indirect ultimate "beneficial owner," as defined in Rule 13d-3 under the
Exchange Act, of more than 50% of the total voting power of all shares of the
Company's capital stock that are entitled to vote generally in the election of
directors;
(ii) consummation of any share exchange, consolidation or merger of the
Company or any sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of the
Company and its subsidiaries, taken as a whole, to any person other than the
Company or one or more of its subsidiaries pursuant to which the Common Stock
will be converted into cash, securities or other property; provided, however,
that a transaction where the holders of the Company's voting capital stock
immediately prior to such transaction have, directly or indirectly, more than
50% of the aggregate voting power of all shares of capital stock of the
continuing or surviving corporation or transferee entitled to vote generally in
the election of directors immediately after such event shall not be a
Fundamental Change;
(iii) Continuing Directors cease to constitute at least a majority of
the Board of Directors;
6
(iv) the shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(v) the Common Stock or other common stock into which the Debentures
are convertible is neither listed for trading on a U.S. national securities
exchange nor approved for trading on the Nasdaq National Market or another
established automated over the-counter trading market in the United States.
A Fundamental Change will not be deemed to have occurred in respect of
any of the foregoing, however, if at least 90% of the consideration, excluding
cash payments for fractional shares, in the transaction or transactions
constituting the Fundamental Change consists of shares of capital stock traded
on a national securities exchange or quoted on the Nasdaq National Market or
which will be so traded or quoted when issued or exchanged in connection with a
Fundamental Change (these securities being referred to as "publicly traded
securities") and as a result of this transaction or transactions the Debentures
become convertible into such publicly traded securities, excluding cash payments
for fractional shares.
"FUNDAMENTAL CHANGE REPURCHASE DATE" has the meaning specified in
Section 3.05(a).
"FUNDAMENTAL CHANGE REPURCHASE ELECTION" has the meaning specified in
Section 3.05(c)(i).
"FUNDAMENTAL CHANGE REPURCHASE NOTICE" has the meaning specified in
Section 3.05(b).
"FUNDAMENTAL CHANGE REPURCHASE PRICE" has the meaning provided in
Section 3.05(a).
"GLOBAL DEBENTURE" has the meaning specified in Section 2.02.
"INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASERS" means each of X.X. Xxxxxx Securities Inc., Banc of
America Securities LLC, Scotia Capital (USA) Inc., Xxxxx Xxxxxxx & Co., Lazard
Freres & Co. LLC, and UBS Securities LLC (each an "INITIAL PURCHASER").
"INTEREST" means, when used with reference to the Debentures, any
regular interest payable under the terms of the Debentures, including Contingent
Interest, if any, and Additional Amounts, if any, payable under the terms of the
Registration Rights Agreement.
"INTEREST PAYMENT DATE" means June 15 and December 15 of each year,
commencing December 15, 2004.
7
"LAST REPORTED SALE PRICE" of the Common Stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq National
Market. If the Common Stock is not listed for trading on a U.S. national or
regional securities exchange and not reported by the Nasdaq National Market on
the relevant date, the "Last Reported Sale Price" will be the last quoted bid
price for the Common Stock in the over-the-counter market on the relevant date
as reported by the National Quotation Bureau Incorporated or similar
organization. If the Common Stock is not so quoted, the "Last Reported Sale
Price" will be the average of the mid-point of the last bid and asked prices for
the Common Stock on the relevant date quoted by each of at least three
nationally recognized independent investment banking firms selected by the
Company for this purpose.
"NON-ELECTING SHARE" has the meaning specified in Section 15.06.
"OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by any two of the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, the Chief Financial
Officer, any Vice President (whether or not designated by a number or numbers or
word or words added before or after the title "Vice President"), the Treasurer
or the Secretary of the Company; provided that the Officers' Certificate
delivered on the date hereof pursuant to Section 16.05 may be signed by any one
of the foregoing.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"ORIGINAL PRINCIPAL AMOUNT" of a Debenture means the stated Original
Principal Amount as set forth on the face of such Debenture.
"OUTSTANDING", when used with reference to Debentures and subject to
the provisions of Section 9.04, means, as of any particular time, all Debentures
authenticated and delivered by the Trustee under this Indenture, except:
(a) Debentures theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust with the
Trustee or with any Paying Agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article 13;
8
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.06; and
(d) Debentures converted into Common Stock, cash or a combination
of cash and Common Stock pursuant to Article 15 and Debentures deemed not
outstanding pursuant to Article 3.
"PAYING AGENT" means the Trustee or such other office or agency
designated by the Company where Debentures may be presented for payment.
"PERSON" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"PORTAL MARKET" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture that it replaces.
"PRINCIPAL VALUE CONVERSION" has the meaning specified in Section
15.01(a)(iii).
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of June 16,
2004 among the Company and the Initial Purchasers.
"PURCHASED SHARES" has the meaning specified in Section 15.05(e).
"QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.
"REDEMPTION DATE" has the meaning specified in Section 3.02(a).
"REDEMPTION NOTICE" has the meaning specified in Section 3.02(a).
"REDEMPTION PRICE" has the meaning specified in Section 3.01.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of June 22, 2004, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
9
"REGULAR RECORD DATE" means, with respect to each Interest Payment
Date, the close of business on the June 1 or December 1 next preceding such
Interest Payment Date (whether or not a Business Day).
"REPURCHASE DATE" means the Fundamental Change Repurchase Date or the
Company Repurchase Date, as applicable.
"REPURCHASE ELECTION" means the Fundamental Change Repurchase Election
or the Company Repurchase Election, as applicable.
"REPURCHASE PRICE" means the Fundamental Change Repurchase Price or the
Company Repurchase Price, as applicable.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer of the Trustee within the Corporate Trust Department (or any successor
unit, department or division of the Trustee) located at the Corporate Trust
Office of the Trustee who has direct responsibility for the administration of
this Indenture and, for the purposes of Sections 7.08 and 8.01(b), also means
any other officer or person performing similar functions to whom any corporate
trust matter is referred because of such person's knowledge of any familiarity
with the particular subject.
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SPECIAL RECORD DATE" has the meaning specified in Section 2.03.
"SPIN-OFF" has the meaning specified in Section 15.05(c).
"SPIN-OFF MARKET PRICE" per share of Common Stock of the Company or the
capital stock of, or similar equity interests in, a subsidiary or other business
unit of the Company on any day means the average of the daily Last Reported Sale
Price for the ten (10) consecutive Trading Days commencing on and including the
fifth Trading Day after the Ex-Dividend Date with respect to the issuance or
distribution requiring such computation.
"STATED MATURITY" means June 15, 2034.
"STOCK PRICE" means the price per share of Common Stock paid in
connection with a corporate transaction described in Section 15.01(b) hereof,
which shall be equal to (i) if holders of Common Stock receive only cash in such
corporate transaction, the cash amount paid per share of Common Stock and (ii)
in all other cases, the average of the Last Reported Sale Prices of Common Stock
on the five Trading Days up to but not including the Effective Date.
10
"STOCK RECORD DATE" means, 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 shareholders 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).
"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 or other equity interest 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 partner or managing general partner of which is such Person or a
subsidiary 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).
"TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest
income on a Debenture that must be accrued as original issue discount for United
States Federal income tax purposes pursuant to U.S. Treasury Regulation section
1.1275-4.
"TRADING DAY" means a day during which trading in the Common Stock
generally occurs and a closing price for the Common Stock is provided on the New
York Stock Exchange or, if the Common Stock is not listed on the New York Stock
Exchange, on the principal other U.S. national or regional securities exchange
on which the Common Stock is then listed or, if the Common Stock is not listed
on a U.S. national or regional securities exchange, on the principal other
market on which the Common Stock is then traded.
"TRADING PRICE" means, as of any date of determination, the average of
the secondary market bid quotations per $1,000 Original Principal Amount of
Debentures obtained by the Bid Solicitation Agent for $1 million aggregate
Original Principal Amount of Debentures at approximately 4:00 p.m., New York
City time, on such determination date from three nationally recognized
securities dealers (none of which shall be an Affiliate of the Company) in The
City of New York (or such other place that may be determined from time to time
by the Company) selected by the Company; provided, however, if (a) at least one
such bid is not obtained by the Bid Solicitation Agent or (b) in the Company's
reasonable judgment, the bid quotations are not indicative of the secondary
market value of the Debentures as of such determination date, then the Trading
Price per $1,000 Original Principal Amount of the Debentures for such
determination date shall equal (1) the Conversion Rate as of such determination
date, appropriately adjusted to take into account the occurrence, during the
period commencing on the first of such Trading Days during such five (5) Trading
Day
11
period and ending on such determination date, of any event described in Section
15.05 or Section 15.06, multiplied by (2) the average Last Reported Sale Price
of the Common Stock on the five (5) Trading Days ending on such determination
date; provided however that for purposes of Section 15.01(a)(iii), if the Bid
Solicitation Agent cannot reasonably obtain at least one bid for $1 million
aggregate Original Principal Amount of the Debentures from a nationally
recognized securities dealer, or in the Company's reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Debentures,
then the Trading Price per Debenture will be deemed to be less than 98% of the
product of the Last Reported Sale Price of Common Stock and the Conversion Rate.
The Bid Solicitation Agent shall solicit bids from securities dealers that the
Company believes to be willing to bid for Debentures. The Trading Price shall be
determined by the Company.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 11.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "TRUST INDENTURE ACT" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.
"TRUSTEE" means Union Bank of California, N.A. and its successors and
any corporation resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.01. Designation Amount and Issue of Debentures. The
Debentures shall be designated as " 3.50% CONVERTIBLE SENIOR DEBENTURES DUE
2034". Debentures not to exceed the aggregate Original Principal Amount of
$180,000,000 (or up to $200,000,000 if the Initial Purchasers' option set forth
in the Purchase Agreement is exercised in full) (except pursuant to Sections
2.05, 2.06, 3.05, 3.06 and 15.02 hereof) upon the execution of this Indenture,
or from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the Company, signed by
its Chief Executive Officer, its President, its Chief Operating Officer or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President"), without any further
action by the Company hereunder.
Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially
12
in the form set forth in Exhibit A. The terms and provisions contained in the
form of Debenture attached as Exhibit A hereto shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Debentures to
be tradable on The Portal Market or as may be required for the Debentures to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Debentures are subject.
So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "GLOBAL DEBENTURE"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial holders of a
Global Debenture will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Debenture.
Any Global Debenture shall represent such of the outstanding Debentures
as shall be specified therein and shall provide that it shall represent the
aggregate Original Principal Amount of outstanding Debentures from time to time
endorsed thereon and that the aggregate Original Principal Amount of outstanding
Debentures represented thereby may from time to time be increased or reduced to
reflect redemptions, repurchases, conversions, transfers or exchanges permitted
hereby. Any endorsement of a Global Debenture to reflect the amount of any
increase or decrease in the Original Principal Amount of outstanding Debentures
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in such manner and upon instructions given by the
holder of such Debentures in accordance with this Indenture. Payment of the
Accreted Principal Amount of and Interest on any Global Debenture shall be made
to the holder of such Debenture.
13
Section 2.03. Date and Denomination of Debentures; Payments of
Interest. The Debentures shall be issuable in fully registered form without
interest coupons in denominations of $1,000 Original Principal Amount and
integral multiples thereof. Each Debenture shall be dated the date of its
authentication and shall bear Interest from the date specified on the face of
the form of Debenture attached as Exhibit A hereto. Interest on the Debentures
shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.
The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on the Regular
Record Date with respect to an Interest Payment Date (whether or not such day is
a Business Day) shall be entitled to receive the Interest payable on such
Interest Payment Date, except that the Interest payable upon redemption or
repurchase will be payable to the Person to whom the Accreted Principal Amount
is payable pursuant to such redemption or repurchase (unless the Redemption Date
or the Repurchase Date, as the case may be, is an Interest Payment Date, in
which case the semi-annual payment of interest becoming due on such date shall
be payable to the holders of such Debentures registered as such on the
applicable Regular Record Date). Notwithstanding the foregoing, if any Debenture
(or portion thereof) is converted into Common Stock, cash or a combination of
cash and Common Stock during the period after a Regular Record Date to, but
excluding, the next succeeding Interest Payment Date and such Debenture (or
portion thereof) has been called or tendered for redemption on a Redemption Date
which occurs during such period, the Company shall not be required to pay
interest on such Interest Payment Date in respect of any such Debenture (or
portion thereof), except as provided in Section 15.02. Interest shall be payable
at the office of the Company maintained by the Company for such purposes, which
shall initially be an office or agency of the Trustee. The Company shall pay
Interest (i) on any Debentures in certificated form by check mailed to the
address of the Person entitled thereto as it appears in the Debenture Register
(or upon written notice, by wire transfer in immediately available funds, if
such Person is entitled to Interest on Debentures with an aggregate Original
Principal Amount in excess of $2,000,000) or (ii) on any Global Debenture by
wire transfer of immediately available funds to the account of the Depositary or
its nominee.
Any Interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any June 15 or December 15 (herein called
"DEFAULTED INTEREST") shall forthwith cease to be payable to the Debentureholder
on the relevant Regular Record Date by virtue of its having been such
Debentureholder, and such Defaulted Interest shall be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a "SPECIAL
RECORD DATE" for the payment of such Defaulted Interest, which shall be the date
fixed in the following manner. The Company shall notify the Trustee in writing
14
of the amount of Defaulted Interest proposed to be paid on each Debenture and
the date of the proposed payment (which shall be not less than twenty-five (25)
days after the receipt by the Trustee of such notice, unless the Trustee shall
consent to an earlier date), and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less than ten
(10) days prior to the date of the proposed payment, and not less than ten (10)
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each holder at his address as it appears
in the Debenture Register, not less than ten (10) days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause (2)
of this Section 2.03.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Debentures may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature of
its Chief Executive Officer, President, Chief Operating Officer or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President"). Only such Debentures as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Debenture attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.12), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
15
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company, and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 5.02
being herein sometimes collectively referred to as the "DEBENTURE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The Debenture Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "DEBENTURE REGISTRAR" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 5.02.
Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate Original Principal Amount and bearing such
restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate Original Principal Amount, upon surrender
of the Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 5.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer or
for exchange, redemption, repurchase or conversion shall (if so required by the
16
Company or the Debenture Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, duly executed by the Debentureholder thereof or his attorney duly
authorized in writing.
No service charge shall be made to any holder for any registration of,
transfer or exchange of Debentures, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.01 (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 15, (d) any Debentures or portions thereof
tendered for repurchase (and not withdrawn) pursuant to Section 3.05 or (e) any
Debentures or portions thereof tendered for repurchase (and not withdrawn)
pursuant to Section 3.06.
(b) The following provisions shall apply only to Global
Debentures:
(i) Each Global Debenture authenticated under this
Indenture shall be registered in the name of the Depositary or a
nominee thereof and delivered to such Depositary or a nominee thereof
or Custodian therefor, and each such Global Debenture shall constitute
a single Debenture for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this
Indenture, no Global Debenture may be exchanged in whole or in part for
Debentures registered, and no transfer of a Global Debenture in whole
or in part may be registered, in the name of any Person other than the
Depositary or a nominee thereof unless (A) the Depositary (i) has
notified the Company that it is unwilling or unable to continue as
Depositary for such Global Debenture and a successor depositary has not
been appointed by the Company within ninety (90) days or (ii) has
ceased to be a clearing agency registered under the Exchange Act, (B)
an Event of Default has occurred and is continuing, (C) the Company, in
its sole discretion, notifies the Trustee in writing that it no longer
wishes to have all the Debentures represented by Global Debentures or
(D) any beneficial holder reasonably requests such exchange on terms
acceptable to the Company, the Trustee and the Depositary, which in the
case of the Trustee may include, in the Trustee's sole discretion,
among other things, the requirement that (i) the Trustee and any
Debenture Registrar receive (a) from the Company or the Depositary, a
written order, in either case requesting such exchange, and an Opinion
of Counsel (which upon receipt thereof the Trustee and such Debenture
Registrar shall be fully protected in relying) to the effect that
17
(x) all securities laws in connection with such exchange have been
complied with and (y) such exchange is otherwise authorized or
permitted by this Indenture; and (b) from such beneficial holder (x) an
affidavit as to its beneficial ownership interest in such Global
Debenture and/or (y) an indemnity, reasonably satisfactory to the
Trustee and such Debenture Registrar, against any loss, liability or
expense to the Trustee and such Debenture Registrar to the extent that
the Trustee or Debenture Registrar acts upon such order, affidavit
and/or indemnity; and (ii) such exchange can be accomplished in a
manner that is practicable and not inconsistent with the rules of any
applicable Depositary or securities exchange upon which the Debentures
may be listed for trading. Any Global Debenture exchanged pursuant to
clause (A) or (B) above shall be so exchanged in whole and not in part
and any Global Debenture exchanged pursuant to clause (C) or (D) above
may be exchanged in whole or from time to time in part as directed by
the Company. Any Debenture issued in exchange for a Global Debenture or
any portion thereof shall be a Global Debenture; provided that any such
Debenture so issued that is registered in the name of a Person other
than the Depositary or a nominee thereof shall not be a Global
Debenture.
(iii) Debentures issued in exchange for a Global Debenture
or any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate Original Principal Amount equal to that of such Global
Debenture or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary
shall designate and shall bear any legends required hereunder. Any
Global Debenture to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Debenture Registrar. With regard to any
Global Debenture to be exchanged in part, either such Global Debenture
shall be so surrendered for exchange or, if the Trustee is acting as
Custodian for the Depositary or its nominee with respect to such Global
Debenture, the Original Principal Amount thereof shall be reduced, by
an amount equal to the portion thereof to be so exchanged, by means of
an appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and make
available for delivery the Debenture issuable on such exchange to or
upon the written order of the Depositary or an authorized
representative thereof.
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make
available to the Trustee a reasonable supply of certificated Debentures
in definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the
Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect
18
to any Global Debenture registered in the name of the Depositary or any
nominee thereof, and the Depositary or such nominee, as the case may
be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global
Debenture for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other Person on whose behalf an
Agent Member may act, the operation of customary practices of such
Persons governing the exercise of the rights of a beneficial holder of
any Debenture.
(vi) At such time as all interests in a Global Debenture
have been redeemed, repurchased, converted, canceled or exchanged for
Debentures in certificated form, such Global Debenture shall, upon
receipt thereof, be canceled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a
Global Debenture is redeemed, repurchased, converted, canceled or
exchanged for Debentures in certificated form, the Original Principal
Amount of such Global Debenture shall, in accordance with the standing
procedures and instructions existing between the Depositary and the
Custodian, be appropriately reduced, and an endorsement shall be made
on such Global Debenture, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction.
(c) Every Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Debentures and required to bear the
legend set forth in Section 2.05(d), collectively, the "RESTRICTED SECURITIES")
shall be subject to the restrictions on transfer set forth in this Section
2.05(c) (including those set forth in the legend below) unless such restrictions
on transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such holder's acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in Section 2.05(c) and
2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan, transfer or
other disposition whatsoever of any Restricted Security or any interest therein.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such
19
transfer) or pursuant to Rule 144 under the Securities Act or any similar
provision then in force, or unless otherwise agreed by the Company in writing,
with written notice thereof to the Trustee:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")); (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO KELLWOOD
COMPANY (THE "ISSUER"), (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY
PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE
144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).
20
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS DEBENTURE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT.
THE ISSUE PRICE OF EACH DEBENTURE IS $1,000 PER $1,000 OF ORIGINAL PRINCIPAL
AMOUNT, AND THE ISSUE DATE IS JUNE 22, 2004. IN ADDITION, THIS DEBENTURE IS
SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT
PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS DEBENTURE IS 7.65%,
COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES).
THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN THIS
DEBENTURE EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS DEBENTURE WILL BE DEEMED
TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS
DEBENTURE AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
"CONTINGENT PAYMENT REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE OF ANY
COMMON STOCK RECEIVED UPON ANY CONVERSION OF THIS DEBENTURE OR UPON A PURCHASE
OF THIS DEBENTURE AT THE HOLDER'S OPTION AS A CONTINGENT PAYMENT FOR PURPOSES OF
THE CONTINGENT PAYMENT REGULATIONS, AND (3) TO ACCRUE INTEREST WITH RESPECT TO
THE DEBENTURE AS ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES ACCORDING TO THE "NONCONTINGENT BOND METHOD," SET FORTH IN THE
CONTINGENT PAYMENT REGULATIONS, AND TO BE BOUND BY THE ISSUER'S DETERMINATION OF
THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN THE MEANING OF
THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS DEBENTURE. THE ISSUER
AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS DEBENTURE, UPON WRITTEN
REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE,
YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: KELLWOOD
COMPANY, 000 XXXXXXXX XXXXXXX, XXXXXXXXXXXX, XXXXXXXX 00000, ATTN: TREASURER.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT DATED JUNE 22, 2004 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND
BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
21
Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Debenture for exchange
to the Debenture Registrar in accordance with the provisions of this Section
2.05, be exchanged for a new Debenture or Debentures, of like tenor and
aggregate Original Principal Amount, which shall not bear the restrictive legend
required by this Section 2.05(c). If the Restricted Security surrendered for
exchange is represented by a Global Debenture bearing the legend set forth in
this Section 2.05(c), the Original Principal Amount of the legended Global
Debenture shall be reduced by the appropriate Original Principal Amount and the
Original Principal Amount of a Global Debenture without the legend set forth in
this Section 2.05(c) shall be increased by an equal Original Principal Amount.
If a Global Debenture without the legend set forth in this Section 2.05(c) is
not then outstanding, the Company shall execute and the Trustee shall
authenticate and deliver an unlegended Global Debenture to the Depositary.
(d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Debenture shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or pursuant to Rule 144 under the Securities Act
or any similar provision then in force, or such Common Stock has been issued
upon conversion of Debentures that have been transferred pursuant to a
registration statement that has been declared effective under the Securities Act
or pursuant to Rule 144 under the Securities Act or any similar provision then
in force, or unless otherwise agreed by the Company in writing with written
notice thereof to the transfer agent:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")); (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
22
THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), ONLY (A) TO KELLWOOD COMPANY (THE "ISSUER"), (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN
COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM; AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE
OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION).
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT DATED JUNE 22, 2004 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND
BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).
(e) Any Debenture or Common Stock issued upon the conversion of a
Debenture that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Debentures or Common
23
Stock, as the case may be, no longer being "restricted securities" (as defined
under Rule 144).
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Debenture (including any transfers between or among Agent Members or
beneficial holders of interests in any Global Debenture) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case, the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture which has
matured or is about to mature or has been called for redemption or has been
tendered for repurchase upon a Fundamental Change (and not withdrawn) or has
been surrendered for repurchase on a Repurchase Date (and not withdrawn) or is
to be converted into Common Stock, cash or combination of cash and Common Stock
shall become mutilated or be destroyed, lost or stolen, the Company may, instead
of issuing a substitute Debenture, 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 Debenture), as the case may be, if the applicant for such
payment or conversion shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them
24
to save each of them harmless from any loss, liability, cost or expense caused
by or in connection with such substitution, and, in every case of destruction,
loss or theft, the applicant shall also furnish to the Company, the Trustee and,
if applicable, any Paying Agent or Conversion Agent evidence to their
satisfaction of the destruction, loss or theft of such Debenture and of the
ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion or redemption or repurchase of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.
Section 2.07. Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 5.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Debentures an
equal aggregate Original Principal Amount of Debentures in certificated form.
Such exchange shall be made by the Company at its own expense and without any
charge therefor. Until so exchanged, the temporary Debentures shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Debentures in certificated form authenticated and
delivered hereunder.
Section 2.08. Cancellation of Debentures. All Debentures surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any Paying
Agent
25
or any Debenture Registrar or any Conversion Agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption, repurchase or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" or "ISIN" numbers and/or similar numbers (if then generally in use),
and, if so, the Trustee shall use "CUSIP" and/or "ISIN" numbers in notices of
redemption as a convenience to Debentureholders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" and/or similar numbers.
Section 2.10. Ranking. The indebtedness of the Company arising under
or in connection with this Indenture and every outstanding Debenture issued
under this Indenture from time to time constitutes and will constitute a direct,
unsecured and unsubordinated general obligation of the Company, ranking equally
with other existing and future unsecured and unsubordinated Indebtedness of the
Company and ranking senior in right of payment to any future Indebtedness of the
Company that is expressly made subordinate to the Debentures by the terms of
such Indebtedness. For purposes of this Section 2.10 only, "INDEBTEDNESS" means,
without duplication, the principal or face amount of (i) all obligations for
borrowed money, (ii) all obligations evidenced by debentures, notes or other
similar instruments, (iii) all obligations in respect of letters of credit or
bankers acceptances or similar instruments (or reimbursement obligations with
respect thereto), (iv) all obligations to pay the deferred purchase price of
property or services, (v) all obligations as lessee which are capitalized in
accordance with generally accepted accounting principles, and (vi) all
Indebtedness of others guaranteed by the Company or for which the Company is
legally responsible or liable (whether by agreement to purchase indebtedness of,
or to supply funds or to invest in, others).
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Company's Right to Redeem. Prior to June 20, 2011, the
Debentures will not be redeemable at the Company's option. At any time on or
26
after June 20, 2011 and prior to Stated Maturity, the Company, at its option,
may redeem the Debentures, in whole or in part, in accordance with the
provisions of Section 3.02, Section 3.03 and Section 3.04 on the Redemption Date
for a redemption price (the "REDEMPTION PRICE") in cash equal to 100% of the
Accreted Principal Amount of the Debentures to be redeemed together in each case
with accrued and unpaid Interest on the Debentures redeemed to but excluding the
Redemption Date.
Section 3.02. Notice of Optional Redemption; Selection of Debentures.
(a) In case the Company shall desire to exercise the right to
redeem all or, as the case may be, any part of the Debentures pursuant to
Section 3.01, it shall fix a date for redemption (the "REDEMPTION DATE") and it
or, at its written request received by the Trustee not fewer than forty-five
(45) days prior (or such shorter period of time as may be acceptable to the
Trustee) to the Redemption Date, the Trustee in the name of and at the expense
of the Company, shall mail or cause to be mailed a notice of such redemption (a
"REDEMPTION NOTICE") not fewer than thirty (30) nor more than sixty (60) days
prior to the Redemption Date to each holder of Debentures so to be redeemed as a
whole or in part at its last address as the same appears on the Debenture
Register; provided that if the Company shall give such notice, it shall also
give written notice of the Redemption Date to the Trustee. Such mailing shall be
by first class mail. The notice, if mailed in the manner herein provided, shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture. Concurrently with the mailing of any such
Redemption Notice, the Company shall issue a press release announcing such
redemption, the form and content of which press release shall be determined by
the Company in its sole discretion. The failure to issue any such press release
or any defect therein shall not affect the validity of the Redemption Notice or
any of the proceedings for the redemption of any Debenture called for
redemption.
(b) Each such Redemption Notice shall specify the aggregate
Original Principal Amount of Debentures to be redeemed, the CUSIP, ISIN or
similar number or numbers of the Debentures being redeemed, the Redemption Date
(which shall be a Business Day), the Redemption Price at which Debentures are to
be redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Debentures, that Interest accrued to the
Redemption Date will be paid as specified in said notice, and that on and after
said date Interest thereon or on the portion thereof to be redeemed will cease
to accrue and the principal amount will cease to accrete. Such notice shall also
state the current Conversion Rate and the date on which the right to convert
such Debentures or portions thereof into Common Stock will expire. If fewer than
all the Debentures are to be redeemed, the Redemption Notice shall identify the
Debentures to be redeemed (including CUSIP, ISIN or similar numbers, if any).
27
In case any Debenture is to be redeemed in part only, the Redemption Notice
shall state the portion of the Original Principal Amount thereof to be redeemed
and shall state that, on and after the Redemption Date, upon surrender of such
Debenture, a new Debenture or Debentures in Original Principal Amount equal to
the unredeemed portion thereof will be issued.
(c) On or prior to the Redemption Date specified in the Redemption
Notice given as provided in this Section 3.02, the Company will deposit with the
Trustee or with one or more Paying Agents (or, if the Company is acting as its
own Paying Agent, set aside, segregate and hold in trust as provided in Section
5.04) an amount of money in immediately available funds sufficient to redeem on
the Redemption Date all the Debentures (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the appropriate Redemption Price; provided that if such payment is
made on the Redemption Date it must be received by the Trustee or Paying Agent,
as the case may be, by 10:00 a.m., New York City time, on such date. The Company
shall be entitled to retain any interest, yield or gain on amounts deposited
with the Trustee or any Paying Agent pursuant to this Section 3.02(c) in excess
of amounts required hereunder to pay the Redemption Price. Subject to the last
sentence of Section 8.05, if any Debenture called for redemption is converted
pursuant hereto prior to such Redemption Date, any money deposited with the
Trustee or any Paying Agent or so segregated and held in trust for the
redemption of such Debenture shall be paid to the Company upon its written
request, or, if then held by the Company, shall be discharged from such trust.
Whenever any Debentures are to be redeemed, the Company will give the Trustee
written notice in the form of an Officers' Certificate not fewer than forty-five
(45) days (or such shorter period of time as may be acceptable to the Trustee)
prior to the Redemption Date as to the aggregate Original Principal Amount of
Debentures to be redeemed.
(d) If less than all of the outstanding Debentures are to be
redeemed, the Trustee shall select the Debentures or portions thereof of the
Global Debenture or the Debentures in certificated form to be redeemed (in
Original Principal Amounts of $1,000 or integral multiples thereof) by lot, on a
pro rata basis or by another method the Trustee deems fair and appropriate. If
any Debenture selected for partial redemption is submitted for conversion in
part after such selection, the portion of such Debenture submitted for
conversion shall be deemed (so far as may be possible) to be from the portion
selected for redemption. The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Debenture is submitted for conversion in part before the mailing
of the Redemption Notice.
Upon any redemption of less than all of the outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and outstanding
at the time of redemption, treat as outstanding any Debentures surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a
28
Redemption Notice and may (but need not) treat as outstanding any Debenture
authenticated and delivered during such period in exchange for the unconverted
portion of any Debenture converted in part during such period.
Section 3.03. Payment of Debentures Called for Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the Redemption Date and at the place or places stated
in such notice at the applicable Redemption Price, and on and after the
Redemption Date (unless the Company shall default in the payment of the
Redemption Price). Interest on the Debentures or portion of Debentures so called
for redemption shall cease to accrue and the principal amount of the Debentures
will cease to accrete on and after the Redemption Date (unless the Company shall
default in the payment of the Redemption Price) and after the close of business
on the second Business Day immediately preceding the Redemption Date, such
Debentures shall cease to be convertible into Common Stock and, except as
provided in Section 8.05, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such
Debentures except the right to receive the Redemption Price thereof. On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price; provided
that if the applicable Redemption Date is an Interest Payment Date, the Interest
payable on such Interest Payment Date shall be paid on such Interest Payment
Date to the holders of record of such Debentures on the applicable record date
instead of the holders surrendering such Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in Original Principal Amount equal to
the unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any Redemption Notice during the continuance of a default in
payment of Interest on the Debentures. If any Debenture called for redemption
shall not be so paid upon surrender thereof for redemption, the principal shall,
until paid or duly provided for, continue to bear interest at the rate borne by
the Debenture, compounded semi-annually, and such Debenture shall remain
convertible into Common Stock, cash or a combination of cash and Common Stock
until the Accreted Principal Amount and Interest shall have been paid or duly
provided for. The Company will notify all of the holders if the Company redeems
any of the Debentures.
Section 3.04. [Reserved].
29
Section 3.05. Repurchase of Debentures by the Company at Option of
Holders upon a Fundamental Change.
(a) If a Fundamental Change shall occur at any time prior to
Stated Maturity, each holder shall have the right, at such holder's option, to
require the Company to repurchase for cash any or all of such holder's
Debentures, or any portion of the Original Principal Amount thereof that is
equal to $1,000 or an integral multiple of $1,000, on the date specified in the
Fundamental Change Repurchase Notice, which date shall be no more than thirty
(30) days after the date of the Fundamental Change Repurchase Notice (subject to
extension to comply with applicable law) (the "FUNDAMENTAL CHANGE REPURCHASE
DATE"). The Company shall repurchase such Debentures at a price (the
"FUNDAMENTAL CHANGE REPURCHASE PRICE") equal to 100% of the Accreted Principal
Amount thereof plus any accrued and unpaid Interest to but excluding the
Fundamental Change Repurchase Date; provided that if the applicable Fundamental
Change Repurchase Date is an Interest Payment Date, the Interest payable on such
Interest Payment Date shall be paid on such Interest Payment Date to the holders
of record of such Debentures on the applicable record date instead of the
holders surrendering such Debentures for repurchase on such date.
(b) On or before the thirtieth (30th) day after the occurrence of
a Fundamental Change, the Company, or at its written request the Trustee in the
name of and at the expense of the Company (which request must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree to a
shorter period), shall mail or cause to be mailed, by first class mail, to all
holders of record on such date a notice (the "FUNDAMENTAL CHANGE REPURCHASE
NOTICE") of the occurrence of such Fundamental Change and of the repurchase
right at the option of the holders arising as a result thereof to each holder of
Debentures at its last address as the same appears on the Debenture Register;
provided that if the Company shall give such notice, it shall also give written
notice of the Fundamental Change to the Trustee and Paying Agent, if other than
the Trustee, at such time as it is mailed to Debentureholders. Such notice, if
mailed in the manner herein provided, shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice. Each
Fundamental Change Repurchase Notice shall state, among other things:
(i) the events causing the Fundamental Change;
(ii) the date of the Fundamental Change;
(iii) the last date on which a holder may exercise the
repurchase right;
(iv) the Fundamental Change Repurchase Price, excluding
accrued and unpaid Interest, the applicable Conversion Rate at the time
of such notice (and any applicable adjustments to the Conversion Rate)
and,
30
to the extent known at the time of such notice, the amount of Interest
that will be payable with respect to the Debentures on the Fundamental
Change Repurchase Date;
(v) the Fundamental Change Repurchase Date;
(vi) the name and address of the Paying Agent and the
Conversion Agent;
(vii) that Debentures as to which a Fundamental Change
Repurchase Election has been given by the holder may be converted only
if the election has been withdrawn by the holder in accordance with the
terms of this Indenture; provided that the Debentures are otherwise
convertible in accordance with Section 15.01;
(viii) that the holder shall have the right to withdraw any
Debentures surrendered prior to the close of business on the Business
Day immediately preceding the Fundamental Change Repurchase Date (or
any such later time as may be required by applicable law);
(ix) a description of the procedures which a
Debentureholder must follow to exercise such repurchase right or to
withdraw any surrendered Debentures;
(x) the CUSIP, ISIN or similar number or numbers of the
Debentures (if then generally in use); and
(xi) briefly, the conversion rights of the Debentures.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.05.
(c) Debentures shall be repurchased pursuant to this Section 3.05
at the option of the holder upon:
(i) delivery to the Trustee (or other Paying Agent
appointed by the Company) by a holder of a duly completed notice (a
"FUNDAMENTAL CHANGE REPURCHASE ELECTION") in the form set forth on the
reverse of the Debenture at any time prior to the close of business on
the Business Day immediately preceding the Fundamental Change
Repurchase Date (subject to extension to comply with applicable law)
stating:
(A) if certificated, the certificate numbers of
the Debentures which the holder shall deliver to be
repurchased;
31
(B) the portion of the Original Principal Amount
of the Debentures that the holder shall deliver to be
repurchased, which portion must be $1,000 or an integral
multiple thereof; and
(C) that such Debentures shall be repurchased as
of the Fundamental Change Repurchase Date pursuant to the
terms and conditions specified in the Debentures and in the
Indenture; and
(ii) delivery or book-entry transfer of the Debentures to
the Trustee (or other Paying Agent appointed by the Company)
simultaneously with or at any time after delivery of the Fundamental
Change Repurchase Election (together with all necessary endorsements)
at the Corporate Trust Office of the Trustee (or other Paying Agent
appointed by the Company), such delivery or transfer being a condition
to receipt by the holder of the Fundamental Change Repurchase Price
therefor; provided that such Fundamental Change Repurchase Price shall
be so paid pursuant to this Section 3.05 only if the Debentures so
delivered or transferred to the Trustee (or other Paying Agent
appointed by the Company) shall conform in all respects to the
description thereof in the related Fundamental Change Repurchase
Election. All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Debenture for repurchase shall be
determined by the Company, whose determination shall be final and
binding absent manifest error.
If the Debentures are not in certificated form, holders must provide
notice of their election in accordance with the appropriate procedures of the
Depositary.
Section 3.06. Repurchase of Debentures by the Company at Option of
Holders on Specified Dates.
(a) On each of June 15, 2011, December 15, 2014, June 15, 2019,
December 15, 2024 and June 15, 2029 (each, a "COMPANY REPURCHASE DATE"), each
holder shall have the right, at such holder's option, to require the Company to
repurchase for cash all of such holder's Debentures, or any portion of the
Original Principal Amount thereof that is an integral multiple of $1,000. The
Company shall repurchase such Debentures at a price (the "COMPANY REPURCHASE
PRICE") equal to 100% of the Accreted Principal Amount thereof plus any accrued
and unpaid Interest to but excluding the Company Repurchase Date; provided that
if the applicable Company Repurchase Date is an Interest Payment Date, the
Interest payable on such Interest Payment Date shall be paid on such Interest
Payment Date to the holders of record of such Debentures on the applicable
record date instead of the holders surrendering such Debentures for repurchase
on such date.
(b) On or before the twentieth (20th) Business Day prior to each
Company Repurchase Date, the Company, or at its written request the Trustee in
32
the name of and at the expense of the Company (which request must be received by
the Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree to a
shorter period), shall mail or cause to be mailed, by first class mail, to all
holders of record on such date a notice (the "COMPANY REPURCHASE NOTICE") to
each holder of Debentures at its last address as the same appears on the
Debenture Register, and to beneficial owners as required by applicable law;
provided that if the Company shall give such notice, it shall also give written
notice to the Trustee and Paying Agent, if other than the Trustee, at such time
as it is mailed to Debentureholders. Such notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. Each Company Repurchase Notice shall state,
among other things:
(i) the Company Repurchase Price, excluding accrued and
unpaid Interest, the applicable Conversion Rate at the time of such
notice (and any applicable adjustments to the Conversion Rate) and, to
the extent known at the time of such notice, the amount of Interest
that will be payable with respect to the Debentures on the Company
Repurchase Date;
(ii) the Company Repurchase Date;
(iii) the last date on which a holder may exercise the
repurchase right;
(iv) the name and address of the Paying Agent and the
Conversion Agent;
(v) that Debentures as to which a Company Repurchase
Election has been given by the holder may be converted only if the
election has been withdrawn by the holder in accordance with the terms
of this Indenture; provided that the Debentures are otherwise
convertible in accordance with Section 15.01;
(vi) that the holder shall have the right to withdraw any
Debentures surrendered prior to the close of business on the Business
Day immediately preceding the Company Repurchase Date (or any such
later time as may be required by applicable law);
(vii) a description of the procedures which a
Debentureholder must follow to exercise such repurchase right or to
withdraw any surrendered Debentures;
(viii) the CUSIP, ISIN or similar number or numbers of the
Debentures (if then generally in use); and
(ix) briefly, the conversion rights of the Debentures.
33
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.06.
(c) Debentures shall be repurchased pursuant to this Section 3.06
at the option of the holder upon:
(i) delivery to the Trustee (or other Paying Agent
appointed by the Company) by a holder of a duly completed notice (a
"COMPANY REPURCHASE ELECTION") in the form set forth on the reverse of
the Debenture at any time from the opening of business on the 20th
Business Day preceding the Company Repurchase Date until the close of
business on the Business Day immediately preceding the Company
Repurchase Date stating:
(A) if certificated, the certificate numbers of
the Debentures which the holder shall deliver to be
repurchased;
(B) the portion of the Original Principal Amount
of the Debentures that the holder shall deliver to be
repurchased, which portion must be $1,000 or an integral
multiple thereof; and
(C) that such Debentures shall be repurchased as
of the Company Repurchase Date pursuant to the terms and
conditions specified in the Debentures and in the Indenture;
and
(ii) delivery or book-entry transfer of the Debentures to
the Trustee (or other Paying Agent appointed by the Company)
simultaneously with or at any time after delivery of the Company
Repurchase Election (together with all necessary endorsements) at the
Corporate Trust Office of the Trustee (or other Paying Agent appointed
by the Company), such delivery or transfer being a condition to receipt
by the holder of the Company Repurchase Price therefor; provided that
such Company Repurchase Price shall be so paid pursuant to this Section
3.06 only if the Debentures so delivered or transferred to the Trustee
(or other Paying Agent appointed by the Company) shall conform in all
respects to the description thereof in the related Company Repurchase
Election. All questions as to the validity, eligibility (including time
of receipt) and acceptance of any Debenture for repurchase shall be
determined by the Company, whose determination shall be final and
binding absent manifest error.
If the Debentures are not in certificated form, holders must provide
notice of their election in accordance with the appropriate procedures of the
Depositary.
Section 3.07. [Reserved].
34
Section 3.08. Conditions and Procedures for Repurchase at Option of
Holders.
(a) The Company shall repurchase from the holder thereof, pursuant
to Section 3.05 or Section 3.06, a portion of a Debenture, if the Original
Principal Amount of such portion is $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to the repurchase of all of a Debenture
also apply to the repurchase of such portion of such Debenture. Upon
presentation of any Debenture repurchased in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of any authorized denomination, in aggregate Original Principal
Amount equal to the portion of the Debentures presented not repurchased.
(b) On or prior to a Repurchase Date, the Company will deposit
with the Trustee or with one or more Paying Agents (or, if the Company is acting
as its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 5.04) an amount of money sufficient to repurchase on the Repurchase Date
all the Debentures or portions thereof to be repurchased on such date at the
Repurchase Price; provided that if such deposit is made on the Repurchase Date
it must be received by the Trustee or Paying Agent, as the case may be, by 10:00
a.m., New York City time, on such date.
If the Trustee or other Paying Agent appointed by the Company, or the
Company or an Affiliate of the Company, if it or such Affiliate is acting as the
Paying Agent, holds money sufficient to pay the aggregate Repurchase Price of
all the Debentures or portions thereof that are to be repurchased on the day
immediately preceding the Repurchase Date, then, on and after such Repurchase
Date (i) such Debentures will cease to be outstanding, (ii) Interest on such
Debentures will cease to accrue, (iii) the principal will cease to accrete
(whether or not book-entry transfer of the Debentures has been made or the
Debentures have been delivered to the Trustee or Paying Agent) and (iv) all
other rights of the holders of such Debentures will terminate (other than the
right to receive the Repurchase Price upon transfer or delivery of the
Debentures).
(c) Upon receipt by the Trustee (or other Paying Agent appointed
by the Company) of a Repurchase Election, the holder of the Debenture in respect
of which such Repurchase Election was given shall (unless such notice is validly
withdrawn) thereafter be entitled to receive solely the Repurchase Price with
respect to such Debenture. Such Repurchase Price shall be paid to such holder,
subject to receipt of funds and/or Debentures by the Trustee (or other Paying
Agent appointed by the Company), promptly (but in no event more than five (5)
Business Days) following the later of (x) the Repurchase Date with respect to
such Debenture (provided the holder has satisfied the conditions in Section
3.05(c) or Section 3.06(c), as applicable) and (y) the time of book-entry
transfer or delivery of such Debenture to the Trustee (or other Paying Agent
appointed by the Company) by the holder thereof in the manner required by
Section 3.05(c) or
35
Section 3.06(c), as applicable. Debentures in respect of which a Repurchase
Election has been given by the holder thereof may not be converted pursuant to
Article 15 hereof on or after the date of the delivery of such Repurchase
Election unless such notice has first been validly withdrawn.
(d) Notwithstanding anything herein to the contrary, any holder
delivering to the office of the Trustee (or other Paying Agent appointed by the
Company) a Repurchase Election shall have the right to withdraw such election,
in whole or in part, at any time prior to the close of business on the Business
Day preceding the Repurchase Date (or any such later time as may be required by
applicable law) by delivery of a written notice of withdrawal to the Trustee (or
other Paying Agent appointed by the Company) specifying:
(i) the Original Principal Amount of the Debenture with
respect to which such notice of withdrawal is being submitted, and
(ii) the certificate number, if any, of the Debenture in
respect of which such notice of withdrawal is being submitted, or the
appropriate Depositary information if the Debenture in respect of which
such notice of withdrawal is being submitted is represented by a Global
Debenture,
(iii) the Original Principal Amount, if any, of such
Debenture which remains subject to the original Repurchase Election and
which has been or will be delivered for repurchase by the Company.
If the Debentures are not in certificated form, holders must provide
notice of their withdrawal in accordance with the appropriate procedures of the
Depositary.
The Trustee (or other Paying Agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Election or
written notice of withdrawal thereof.
(e) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Debentures
in the event of a Fundamental Change or on any Company Repurchase Date. If then
required by applicable rules, the Company will file a Schedule TO or any other
schedule required in connection with any offer by the Company to repurchase
Debentures.
(f) There shall be no repurchase of any Debentures pursuant to
Section 3.05 or Section 3.06 if there has occurred at any time prior to, and is
continuing on, the Repurchase Date an Event of Default (other than an Event of
Default that is cured by the payment of the Repurchase Price with respect to
such Debentures). The Paying Agent will promptly return to the respective
holders thereof any Debentures (x) with respect to which a Repurchase Election
has been withdrawn in compliance with this Indenture, or (y) held by it during
the continuance of an
36
Event of Default (other than a default in the payment of the Repurchase Price
with respect to such Debentures) in which case, upon such return, the Repurchase
Election with respect thereto shall be deemed to have been withdrawn.
(g) The Trustee (or other Paying Agent appointed by the Company)
shall return to the Company any cash that remains unclaimed as provided in
Section 13.03, together with interest, if any, thereon, held by them for the
payment of the Repurchase Price; provided that to the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 3.08(b) exceeds the
aggregate Repurchase Price of the Debentures or portions thereof which the
Company is obligated to purchase as of the Repurchase Date then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Repurchase Date, the Trustee shall return any such excess to the
Company together with interest, if any, thereon.
(h) In the case of a reclassification, change, consolidation,
merger, binding share exchange, combination, sale or conveyance to which Section
15.06 applies, in which the Common Stock of the Company is changed or exchanged
as a result into the right to receive cash, securities or other property, which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such cash, securities or other property (as
determined by the Company, which determination shall be conclusive and binding),
then the Person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Debentures to cause the
Company to repurchase the Debentures following a Fundamental Change, including
without limitation the applicable provisions of this Article 3 and the
definition of Fundamental Change, as appropriate, as determined in good faith by
the Company (which determination shall be conclusive and binding), to make such
provisions apply to such other Person if different from the Company (in lieu of
the Company).
ARTICLE 4
CONTINGENT INTEREST
Section 4.01. Contingent Interest. Additional interest ("CONTINGENT
INTEREST") will accrue on each Debenture during a Contingent Interest Period,
beginning with the Contingent Interest Period commencing on June 20, 2011, if
37
the average Trading Price of the Debentures during the Applicable Five-Day
Trading Period immediately preceding the first day of the applicable Contingent
Interest Period equals or exceeds 130% of the Accreted Principal Amount of the
Debentures. On any Interest Payment Date when Contingent Interest shall be
payable, the amount of Contingent Interest payable with respect to the
Contingent Interest Period per $1,000 Original Principal Amount of Debentures
shall equal 0.125% of the average Trading Price during the Applicable Five-Day
Trading Period with respect to such Contingent Interest Period.
The Trustee's sole responsibility pursuant to this Section 4.01 shall
be to obtain the bids for determining the Trading Price of the Debentures for
each Trading Day during the Applicable Five-Day Trading Period and to provide
such information to the Company, to the extent that the Trustee is then the Bid
Solicitation Agent. The Company shall determine the Trading Price and whether
holders are entitled to receive Contingent Interest, and if so, provide notice
pursuant to Section 4.03. Notwithstanding any term contained in this Indenture
or any other document to the contrary, the Trustee shall have no
responsibilities, duties or obligations for or with respect to (i) determining
whether the Company must pay Contingent Interest or (ii) determining the amount
of Contingent Interest, if any, payable by the Company.
Section 4.02. Payment of Contingent Interest. Contingent Interest for
any Contingent Interest Period shall be paid on the immediately succeeding
Interest Payment Date to the Person in whose name any Debenture (or its
Predecessor Debenture) is registered on the Debenture Register at the close of
business on the corresponding Regular Record Date. Contingent Interest due under
this Article 4 shall be treated for all purposes of this Indenture like any
other interest accruing on the Debentures.
Section 4.03. Contingent Interest Notification.
(a) As soon as practicable following the first Business Day of a
Contingent Interest Period for which Contingent Interest will be payable
pursuant to Section 4.01, the Company shall issue a press release stating that
Contingent Interest will be paid on the Debentures and identifying such
Contingent Interest Period and publish the information on its website on the
World Wide Web.
(b) On any Interest Payment Date on which Contingent Interest is
payable pursuant to this Article 4, the Company shall deliver notice to the
Trustee, issue a press release stating the amount of such Contingent Interest
and setting the forth the manner in which such amount was calculated and publish
such information on its website on the World Wide Web.
38
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01. Payment of Principal and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the Accreted
Principal Amount of (including any Redemption Price or Repurchase Price pursuant
to Article 3) and Interest on each of the Debentures at the places, at the
respective times and in the manner provided herein and in the Debentures.
Section 5.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in such cities as it shall determine, the
Debentures may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion, redemption or repurchase and where
notices and demands to or upon the Company in respect of the Debentures and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as Paying Agent,
Debenture Registrar, Custodian, Bid Solicitation Agent and Conversion Agent, and
each of the Corporate Trust Office and the office of agency of the Trustee shall
be considered as one such office or agency of the Company for each of the
aforesaid purposes.
So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.
Section 5.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a Paying Agent other than the Trustee, or if the Trustee shall appoint
such
39
a Paying Agent, the Company will cause such Paying Agent to execute and deliver
to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent
for the payment of the Accreted Principal Amount of or Interest on the
Debentures (whether such sums have been paid to it by the Company or by
any other obligor on the Debentures) in trust for the benefit of the
holders of the Debentures;
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Debentures) to make any
payment of the Accreted Principal Amount of or Interest on the
Debentures when the same shall be due and payable; and
(3) that at any time during the continuance of an Event
of Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the Accreted Principal
Amount of or Interest on the Debentures, deposit with the Paying Agent a sum (in
funds which are immediately available on the due date for such payment)
sufficient to pay such Accreted Principal Amount or Interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the Paying Agent by 10:00 a.m., New York
City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on
or before each due date of the Accreted Principal Amount of or Interest on the
Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such Accreted Principal Amount
or Interest so becoming due and will promptly notify the Trustee of any failure
to take such action and of any failure by the Company (or any other obligor
under the Debentures) to make any payment of the Accreted Principal Amount of or
Interest on the Debentures when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any Paying Agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any Paying Agent
to the Trustee, the Company or such Paying Agent shall be released from all
further liability with respect to such sums.
40
(d) Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.02 and 13.03.
The Trustee shall not be responsible for the actions of any other
Paying Agents (including the Company if acting as its own Paying Agent) and
shall have no control of any funds held by such other Paying Agents.
Section 5.05. Existence. Subject to Article 12, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Debentureholders.
Section 5.06. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time to enable such holder or beneficial holder to sell its Debentures
or Common Stock without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such Rule may be amended
from time to time. Upon the request of any holder or any beneficial holder of
the Debentures or such Common Stock, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
Section 5.07. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the Accreted Principal
Amount of or Interest on the Debentures as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture and the Company (to the extent it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any
41
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 5.08. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company (which fiscal year of the Company is presently the twelve
calendar months ending December 31), a certificate signed by either the
principal executive officer, principal financial officer or principal accounting
officer of the Company, stating whether or not to the best knowledge of the
signer thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and the
status thereof of which the signer may have knowledge.
The Company will deliver to the Trustee, promptly upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 5.08 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 5.09. Additional Amounts Notice. In the event that the Company
is required to pay Additional Amounts to holders of Debentures pursuant to the
Registration Rights Agreement, the Company will provide written notice
("ADDITIONAL AMOUNTS NOTICE") to the Trustee of its obligation to pay Additional
Amounts no later than fifteen (15) days prior to the proposed payment date for
the Additional Amounts, and the Additional Amounts Notice shall set forth the
amount of Additional Amounts to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Debentures to determine the Additional Amounts, or with respect to the
nature, extent or calculation of the amount of Additional Amounts when made, or
with respect to the method employed in such calculation of the Additional
Amounts.
Section 5.10. Contingent Debt Tax Treatment. The Company agrees and, by
acceptance of a Debenture, each beneficial holder of a Debenture will be deemed
to have agreed to treat the Debentures as indebtedness of the Company for U.S.
federal income tax purposes that are subject to the regulations governing
contingent payment debt instruments and to be bound (in the absence of an
administrative determination or judicial ruling to the contrary) by the
Company's determination of the comparable yield and projected payment schedule
within the meaning of the regulations governing contingent payment debt
instruments. A holder of Debentures may obtain the amount of original issue
discount, issue date, yield to maturity, comparable yield and projected payment
schedule for the
42
Debentures, determined by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by
submitting a written request for it to the Company at the following address:
Kellwood Company, 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Attention:
Treasurer.
Section 5.11. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of Tax Original Issue Discount (including daily
rates and accrual periods) accrued on outstanding Debentures as of the end of
such year and (ii) such other specific information relating to such Tax Original
Issue Discount as may then be required under the Internal Revenue Code of 1986,
as amended from time to time, or the Treasury regulations promulgated
thereunder.
ARTICLE 6
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 6.01. Debentureholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each June 1 and December 1 in each year
beginning with December 1, 2004, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require of the names and
addresses of the holders of Debentures as of a date not more than fifteen (15)
days (or such other date as the Trustee may reasonably request in order to so
provide any such notices) prior to the time such information is furnished,
except that no such list need be furnished by the Company to the Trustee so long
as the Trustee is acting as the sole Debenture Registrar.
Section 6.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 6.01 or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 6.01 upon receipt of a new list so
furnished.
(b) The rights of Debentureholders to communicate with other
holders of Debentures with respect to their rights under this Indenture or under
the Debentures, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.
(c) Every Debentureholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure
43
of information as to names and addresses of holders of Debentures made pursuant
to the Trust Indenture Act.
Section 6.03. Reports by Trustee. (a) Within sixty (60) days after
December 15 of each year commencing with the year 2004, the Trustee shall
transmit to holders of Debentures such reports dated as of December 15 of the
year in which such reports are made concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto. In the event that no events
have occurred under the applicable sections of the Trust Indenture Act, the
Trustee shall be under no duty or obligation to provide such reports.
(b) A copy of such report shall, at the time of such transmission
to holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.
Section 6.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) days after the same is so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
ARTICLE 7
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT
Section 7.01. Events of Default. In case one or more of the following
events (each, an "EVENT OF DEFAULT") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) shall
have occurred and be continuing:
44
(a) default in the payment of the Accreted Principal Amount of any
of the Debentures as and when the same shall become due and payable either at
Stated Maturity or in connection with any redemption or repurchase, in each case
pursuant to Article 3, or otherwise; or
(b) default in the payment of any installment of Interest upon any
of the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) days; or
(c) failure to provide notice of the occurrence of a Fundamental
Change on a timely basis as required by Section 3.05; or
(d) default in the Company's obligation to convert the Debentures
into Common Stock, cash or a combination of cash and Common Stock upon the
exercise of a holder's rights pursuant to Article 15 and continuation of such
default for a period of ten (10) days; or
(e) default in the Company's obligation to repurchase the
Debentures at the option of a holder upon a Fundamental Change pursuant to
Section 3.05 or on specified dates pursuant to Section 3.06; or
(f) default in the Company's obligation to redeem the Debentures
after it has exercised its option to redeem; or
(g) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 7.01 specifically
dealt with) continued for a period of sixty (60) days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee, or to the Company and a
Responsible Officer of the Trustee by the holders of at least twenty-five
percent (25%) in aggregate Original Principal Amount of the Debentures at the
time outstanding determined in accordance with Section 9.04; or
(h) default with respect to the Company's or any of its
Subsidiaries' indebtedness having a principal amount then outstanding,
individually or in the aggregate, of at least $25.0 million, whether such
indebtedness now exists or is hereafter incurred, which default or defaults:
(i) shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable; or
(ii) shall constitute the failure to pay such indebtedness
at the final stated maturity thereof (after expiration of any
applicable grace period); or
45
(i) rendering of any final judgment or judgments for the payment
of money in excess of $25.0 million against the Company (to the extent not
coverted by insurance as to which the insurer does not dispute coverage) that is
not discharged for any period of sixty (60) consecutive days during which a stay
of enforcement shall not be in effect; or
(j) commencement by the Company of a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or consent by the Company to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against the
Company, or general assignment by the Company for the benefit of creditors, or
failure of the Company generally to pay its debts as they become due; or
(k) commencement of an involuntary case or other proceeding
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.01(j) or 7.01(k)), unless the Accreted Principal Amount of all of
the Debentures shall have already become due and payable, either the Trustee or
the holders of not less than twenty-five percent (25%) in aggregate Original
Principal Amount of the Debentures then outstanding hereunder determined in
accordance with Section 9.04, by notice in writing to the Company (and to the
Trustee if given by Debentureholders), may declare the Accreted Principal Amount
of all the Debentures and the Interest accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Debentures
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.01(j) or 7.01(k) occurs, the Accreted Principal Amount of all the
Debentures and the Interest accrued thereon shall be immediately and
automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
Accreted Principal Amount of the Debentures shall have been so declared due and
payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of Interest upon all Debentures and the Accreted Principal Amount
of any and all Debentures which shall have become due otherwise than by
acceleration (with interest on overdue installments of Interest (to the extent
that payment of such
46
interest is enforceable under applicable law) and on such Accreted Principal
Amount at the rate borne by the Debentures, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.06, and if any and
all defaults under this Indenture, other than the nonpayment of Accreted
Principal Amount of and accrued Interest on Debentures which shall have become
due by acceleration, shall have been cured or waived pursuant to Section 7.07,
then and in every such case the holders of a majority in aggregate Original
Principal Amount of the Debentures then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults or Events of Default and
rescind and annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or Event of Default, or shall impair any right consequent thereon. The Company
shall notify in writing a Responsible Officer of the Trustee, promptly upon
becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
Section 7.02. Payments of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of Interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
Accreted Principal Amount of any of the Debentures as and when the same shall
have become due and payable, whether at maturity of the Debentures or in
connection with any redemption, repurchase, acceleration, declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Debentures, the whole amount that
then shall have become due and payable on all such Debentures for Accreted
Principal Amount or Interest, as the case may be, with interest upon the overdue
Accreted Principal Amount and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of Interest at
the rate borne by the Debentures, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 8.06. Until such demand by the
Trustee, the Company may pay the Accreted Principal Amount of and Interest on
the Debentures to the registered holders, whether or not the Debentures are
overdue.
47
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the Accreted Principal Amount of the Debentures shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 7.02, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of the Accreted Principal Amount and Interest owing and unpaid in respect
of the Debentures, and, in case of any judicial proceedings, to file such proofs
of claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of the Debentureholders allowed in such
judicial proceedings relative to the Company or any other obligor on the
Debentures, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 8.06, and to take any other action with respect to such claims,
including participating as a member of any official committee of creditors, as
it reasonably deems necessary or advisable, and, unless prohibited by law or
applicable regulations, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Debentureholders to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments directly
to the Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Debentures may be entitled to receive in such
48
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.
Section 7.03. Application of Monies Collected by Trustee. Any monies or
other property collected by the Trustee pursuant to this Article 7, or any
monies or other property otherwise distributable in respect of the Company's
obligations under this Indenture, shall be applied in the order following, at
the date or dates fixed by the Trustee for the distribution of such monies, upon
presentation of the several Debentures, and stamping thereon the payment, if
only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee (including any
predecessor Trustee) under Section 8.06;
SECOND: In case the Accreted Principal Amount of the outstanding
Debentures shall not have become due and be unpaid, to the payment of Interest
on the Debentures in default in the order of the maturity of the installments of
such Interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of Interest at the rate
borne by the Debentures, such payments to be made ratably to the Persons
entitled thereto;
THIRD: In case the Accreted Principal Amount of the outstanding
Debentures shall have become due, by declaration or otherwise, and be unpaid, to
the payment of the whole amount then owing and unpaid upon the Debentures for
Accreted Principal Amount and Interest, with interest on the overdue Accreted
Principal Amount and (to the extent that such interest has been collected by the
Trustee) upon overdue installments of Interest at the rate borne by the
Debentures, and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Debentures, then to the payment of such
Accreted Principal Amount and Interest without preference or priority of the
Accreted Principal Amount over Interest, or of Interest over the Accreted
Principal Amount, or of any installment of Interest over any other installment
of Interest, or
49
of any Debenture over any other Debenture, ratably to the aggregate of such
Accreted Principal Amount and accrued and unpaid Interest; and
FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.
Section 7.04. Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by reference to any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate Original Principal Amount of the Debentures then
outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable security or indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Trustee for sixty (60) days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 7.07; it being
understood and intended, and being expressly covenanted by the taker and holder
of every Debenture with every other taker and holder and the Trustee, that no
one or more holders of Debentures shall have any right in any manner whatever by
virtue of or by reference to any provision of this Indenture to affect, disturb
or prejudice the rights of any other holder of Debentures, or to obtain or seek
to obtain priority over or preference to any other such holder, or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Debentures (except as
otherwise provided herein). For the protection and enforcement of this Section
7.04, each and every Debentureholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Debenture, the right of any holder of any Debenture to receive payment of
the Accreted Principal Amount of (including any Redemption Price or Repurchase
Price pursuant to Article 3) and accrued Interest on such Debenture on or after
the respective due dates expressed in such Debenture, or to institute suit for
the enforcement of any such payment on or after such respective dates against
the Company, shall not be impaired or affected without the consent of such
holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
50
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
Section 7.05. Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 7.06. Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 7 to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein, and, subject to the
provisions of Section 7.04, every power and remedy given by this Article 7 or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders. Upon provision of indemnity reasonably
satisfactory to the Trustee, the holders of a majority in aggregate Original
Principal Amount of the Debentures at the time outstanding determined in
accordance with Section 9.04 shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that (a) such
direction shall not be in conflict with any rule of law or with this Indenture,
(b) the Trustee may take any other action which is not inconsistent with such
direction and (c) the Trustee may decline to take any action that would benefit
some Debentureholders to the detriment of other Debentureholders. The holders of
a majority in aggregate Original Principal Amount of the Debentures at the time
outstanding determined in accordance with Section 9.04 may, on behalf of the
holders of all of the Debentures, waive any past default or Event of Default
hereunder and its consequences except (i) a default in the payment of Interest
on, or the Accreted Principal Amount of, the Debentures, (ii) a failure by the
Company to convert any Debentures into Common Stock, cash or a combination of
cash and Common Stock of the Company, (iii) a default in the payment of the
Redemption Price pursuant to Section 3.03, (iv) a default in the payment of the
Fundamental Change Repurchase Price pursuant to Section 3.05 or Company
51
Repurchase Price pursuant to Section 3.06 or (v) a default in respect of a
covenant or provision hereof which under Article 11 cannot be modified or
amended without the consent of the holders of each or all Debentures then
outstanding or affected thereby. Upon any such waiver, the Company, the Trustee
and the holders of the Debentures shall be restored to their former positions
and rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.07, said default or Event of Default shall for all purposes of
the Debentures and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.
Section 7.08. Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Debentureholders, as the names and addresses of such
holders appear upon the Debenture Register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided that except in the case of default in the
payment of the Accreted Principal Amount of or Interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Debentureholders. For the purpose of this Section 7.08, the
term "DEFAULT" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
Section 7.09. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture by its acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 7.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than ten percent in
Original Principal Amount of the Debentures at the time outstanding determined
in accordance with Section 9.04, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the Accreted Principal
Amount of or Interest on any Debenture on or after the due date expressed in
such Debenture or to any suit for the enforcement of the right to convert any
Debenture in accordance with the provisions of Article 15.
52
ARTICLE 8
THE TRUSTEE
Section 8.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants or obligations shall
be read into this Indenture and the Trust Indenture Act against the
Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in Original Principal
Amount of the Debentures at the time outstanding determined as provided in
Section 9.04 relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture;
53
(d) the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any Paying Agent or
any records maintained by any co-registrar with respect to the Debentures; and
(e) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred.
The Trustee shall not be deemed to have knowledge or notice of any
default (as defined in Section 7.08) or Event of Default hereunder unless a
Responsible Officer of the Trustee shall have received at the Corporate Trust
Office written notice of such default or Event of Default from the Company or
the holders of at least 10% in aggregate Original Principal Amount of the
Debentures and such notice refers to such default or Event of Default, the
Debentures and the Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section 8.01.
Section 8.02. Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 8.01:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(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 be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization and
54
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder.
(g) the Trustee shall not be liable for any action taken, suffered
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder;
(i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded; and
(j) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action which it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel.
55
Section 8.03. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.
Section 8.04. Trustee, Paying Agents, Bid Solicitation Agents,
Conversion Agents or Registrar May Own Debentures. The Trustee, any Paying
Agent, any Bid Solicitation Agent, any Conversion Agent or Debenture Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee, Paying
Agent, Bid Solicitation Agent, Conversion Agent or Debenture Registrar.
Section 8.05. Monies to Be Held in Trust. Subject to the provisions of
Section 13.03, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.
Section 8.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct or bad faith.
The Company also covenants to indemnify the Trustee and any predecessor Trustee
(or any officer, director or employee of the Trustee), in any capacity under
this Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence, willful misconduct or bad faith on the part of the Trustee
or such officers, directors, employees and agent or authenticating agent, as the
case may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses (including reasonable attorneys' fees and expenses) of
defending themselves against any claim (whether asserted by the Company, any
holder or any other
56
Person) of liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligations of the Company under this
Section 8.06 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses (including reasonable attorneys' fees and expenses),
disbursements and advances shall be secured by a lien prior to that of the
Debentures upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Debentures. The obligation of the Company under this Section shall survive the
resignation or removal of the Trustee and the satisfaction and discharge or
termination of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.01(j) or Section 7.01(k) with respect to the Company occurs, the expenses
(including reasonable attorneys' fees and expenses) and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
Section 8.07. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 8.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
Section 8.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10. Resignation or Removal of Trustee.
57
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Debentures. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) days after the
mailing of such notice of resignation to the Debentureholders, the resigning
Trustee may, upon ten (10) Business Days' notice to the Company and the
Debentureholders, appoint a successor identified in such notice or may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or, if any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six (6) months may,
subject to the provisions of Section 7.09, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 8.08
after written request therefor by the Company or by any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at
least six (6) months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.09 and shall fail to resign after
written request therefor by the Company or by any such Debentureholder;
or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee; provided that if no successor Trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
Debentureholders has removed the Trustee, or the Trustee resigns, the Trustee so
removed may petition, at the expense of the Company, any court of competent
jurisdiction for an appointment
58
of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate Original Principal
Amount of the Debentures at the time outstanding may at any time remove the
Trustee and nominate a successor trustee which shall be deemed appointed as
successor trustee unless, within ten (10) days after notice to the Company of
such nomination, the Company objects thereto, in which case the Trustee so
removed or any Debentureholder, or if such Trustee so removed or any
Debentureholder fails to act, the Company, upon the terms and conditions and
otherwise as in Section 8.10(a) provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Debentures, to secure any amounts then due it pursuant to the
provisions of Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.08 and be eligible under
the provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
and the expense of the Company) shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Debentures at their
addresses as they
59
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger. Any Person into which the Trustee
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Trustee (including any trust created by this
Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any Person succeeding to all or
substantially all of the corporate trust business of the Trustee, such Person
shall be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debentures in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
Section 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE 9
THE DEBENTUREHOLDERS
Section 9.01. Action by Debentureholders. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate Original
Principal Amount of the Debentures may take any action (including the making of
any demand or request, the giving of any notice, consent or waiver or the taking
of any other action), the fact that at the time of taking any such action, the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar tenor executed by
60
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article 10, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.
Section 9.02. Proof of Execution by Debentureholders. Subject to the
provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture Registrar.
The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 10.06.
Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any Paying Agent, any Conversion Agent and any Debenture Registrar may deem the
Person in whose name such Debenture shall be registered upon the Debenture
Register to be, and may treat it as, the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing thereon made by any Person other than the Company
or any Debenture Registrar) for the purpose of receiving payment of or on
account of the Accreted Principal Amount of and Interest on such Debenture, for
conversion of such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Debenture
Registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Debenture.
Section 9.04. Company-owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate Original Principal Amount of
Debentures have concurred in any direction, consent, waiver or other action
under this Indenture, Debentures which are owned by the Company or any other
obligor on the Debentures or any Affiliate of the Company or any other obligor
on the Debentures shall be disregarded and deemed not to be outstanding for the
purpose of any such determination; provided that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction,
consent, waiver or other action, only Debentures which a Responsible Officer
knows are so owned shall be so disregarded. Debentures so owned which have been
pledged in good
61
faith may be regarded as outstanding for the purposes of this Section 9.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described Persons, and, subject to Section 8.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Debentures not listed therein are outstanding
for the purpose of any such determination.
Section 9.05. Revocation of Consents, Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.01, of the taking of any action by the holders of the percentage in aggregate
Original Principal Amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE 10
MEETINGS OF DEBENTUREHOLDERS
Section 10.01. Purpose of Meetings. A meeting of Debentureholders may
be called at any time and from time to time pursuant to the provisions of this
Article 10 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee
or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders pursuant to any of the
provisions of Article 7;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article 8;
62
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
11.02; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate Original Principal
Amount of the Debentures under any other provision of this Indenture or
under applicable law.
Section 10.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Debentureholders to take any action specified in Section
10.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 9.01,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 10.03. Call of Meetings by Company or Debentureholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate Original Principal Amount
of the Debentures then outstanding, shall have requested the Trustee to call a
meeting of Debentureholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed the notice of such meeting within twenty (20) days after receipt of
such request, then the Company or such Debentureholders may determine the time
and the place for such meeting and may call such meeting to take any action
authorized in Section 10.01, by mailing notice thereof as provided in Section
10.02.
Section 10.04. Qualifications for Voting. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
63
Section 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 10.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in Original Principal Amount of the Debentures represented at the
meeting and entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
Original Principal Amount of Debentures held or represented by him; provided
that no vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.02 or 10.03 may be adjourned from time to time by the holders of a majority
of the aggregate Original Principal Amount of Debentures represented at the
meeting, whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the outstanding Original Principal Amount of the
Debentures held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Debentureholders shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was mailed as provided in Section
10.02. The record shall show the Original Principal Amount of the Debentures
voting in favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary of
64
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.07. No Delay of Rights by Meeting. Nothing contained in this
Article 10 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE 11
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 15.06 or the
repurchase obligations of the Company pursuant to the requirements of Section
3.08(h).
(b) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Debentures, any property or assets;
(c) to evidence the assumption by a successor Person of the
obligations of the Company pursuant to Article 12;
(d) to add to the covenants of the Company such further covenants
for the benefit of the holders of Debentures, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional covenants a
default or an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided that
in respect of any such additional covenant such supplemental indenture may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
65
(e) to establish the forms or terms of the Debentures;
(f) to cure any ambiguity or correct any error in this Indenture,
so long as such action will not adversely affect the interests of holders,
provided that any such amendment made solely to conform the provisions of this
Indenture to the description of the Debentures in the offering memorandum
relating to the Debentures will be deemed not to adversely affect the interests
of holders;
(g) to evidence the acceptance of appointment hereunder by a
successor Trustee with respect to the Debentures;
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to qualify or maintain the
qualification of this Indenture under the Trust Indenture Act, or under any
similar federal statute hereafter enacted; or
(i) make other changes to the Indenture or forms or terms of the
Debentures, provided no such change individually or in the aggregate with all
other such changes has or will have a material adverse effect on the interests
of the Debentureholders.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time outstanding, notwithstanding any of
the provisions of Section 11.02.
Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Additional Amounts
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of Debentureholders.
With the consent (evidenced as provided in Article 9) of the holders of at least
a majority in aggregate Original Principal Amount of the Debentures at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the
66
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided
that no such supplemental indenture shall (i) extend the Stated Maturity of any
Debenture, or reduce the rate or extend the time for payment of Interest
thereon, or reduce the Accreted Principal Amount thereof or the accretion rate
on the debentures, or reduce any amount payable on redemption or repurchase
thereof, or impair the right of any Debentureholder to institute suit for the
payment thereof, or make the Accreted Principal Amount thereof or Interest
thereon payable in any coin or currency other than that provided in the
Debentures, or affect the obligation of the Company to redeem any Debenture on a
Redemption Date in a manner adverse to the holders of Debentures, or affect the
obligation of the Company to repurchase any Debenture upon the happening of a
Fundamental Change in a manner adverse to the holders of Debentures, or affect
the obligation of the Company to repurchase any Debenture on a Company
Repurchase Date in a manner adverse to the holders of Debentures, or impair the
right to convert the Debentures into Common Stock, cash or a combination of cash
and Common Stock subject to the terms set forth herein, including Section 15.06,
or reduce the number of shares of Common Stock, the amount of cash or the amount
of other property receivable upon conversion, in each case, without the consent
of the holder of each Debenture so affected, or modify any of the provisions of
this Section 11.02 or Section 7.07, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the holder of each Debenture so affected, or
reduce the quorum or voting requirements set forth in Article 10 or (ii) reduce
the aforesaid percentage in Original Principal Amount of Debentures, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Debentures then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
11.03 shall
67
not require such supplemental indenture or the Trustee to be qualified under the
Trust Indenture Act prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act or the Indenture has been qualified
under the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 11, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Debentures
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.04. Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 11 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 16.11) and delivered in exchange for the Debentures then
outstanding, upon surrender of such Debentures then outstanding.
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 11 and is otherwise
authorized or permitted by this Indenture.
ARTICLE 12
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.01. Company May Consolidate on Certain Terms. Subject to the
provisions of Section 12.02, the Company shall not consolidate with or merge
with or into any other Person or Persons (whether or not affiliated with the
Company), nor shall the Company or its successor or successors be a party or
parties to successive consolidations or mergers, nor shall the Company sell,
convey, transfer or lease the property and assets of the Company substantially
as
68
an entirety, to any other Person (whether or not affiliated with the Company),
unless: (i) the Company is the surviving Person, or the resulting, surviving or
transferee Person, if other than the Company, is a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia; (ii) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the Accreted
Principal Amount of and Interest on all of the Debentures, according to their
tenor and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company, shall
be expressly assumed, by supplemental indenture satisfactory in form to the
Trustee, executed and delivered to the Trustee by the Person (if other than the
Company) formed by such consolidation, or into which the Company shall have been
merged, or by the Person that shall have acquired or leased such property, and
such supplemental indenture shall provide for the applicable conversion rights
set forth in Section 15.06; and (iii) immediately after giving effect to the
transaction described above, no Event of Default, and no event which, after
notice or passage of time or both, would become an Event of Default, shall have
happened and be continuing.
Section 12.02. Successor to Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the Accreted Principal Amount of and Interest on all of the
Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Kellwood Company any or all of the Debentures, issuable hereunder
that theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Debentures that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, the Person named as
the "COMPANY" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 12
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall
69
be released from its liabilities as obligor and maker of the Debentures and from
its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Debentures thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 12.
ARTICLE 13
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable and the Company shall deposit with the Trustee or with
one or more Paying Agents (or, if the Company is acting as its own Paying Agent,
set aside, segregate and hold in trust as provided in Section 5.04), in trust,
funds sufficient to pay all amounts due and owing on Debentures (other than any
Debentures that shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) not theretofore canceled or delivered to the Trustee for
cancellation, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of Accreted Principal Amount
of and Interest on the Debentures and the other rights, duties and obligations
of Debentureholders, as beneficiaries hereof with respect to the amounts, if
any, so deposited with the Trustee and (iii) the rights, obligations and
immunities of the Trustee hereunder, including those pursuant to Section 8.06),
and the Trustee, on written demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel as required by Section 16.05 and at the
cost and expense of the Company, 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 Debentures.
70
Section 13.02. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any Paying Agent of the
Debentures (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
Section 13.03. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the Accreted Principal Amount of or Interest on Debentures and not applied
but remaining unclaimed by the holders of Debentures for two years after the
date upon which the Accreted Principal Amount of or Interest on such Debentures,
as the case may be, shall 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
Debentures shall thereafter look only to the Company for any payment that such
holder may be entitled to collect unless an applicable abandoned property law
designates another Person.
ARTICLE 14
IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS
Section 14.01. Indenture and Debentures Solely Corporate Obligations.
No recourse for the payment of the Accreted Principal Amount of or Interest on
any Debenture, or for any claim based thereon or otherwise in respect thereof,
and no recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in any Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, shareholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debentures.
ARTICLE 15
CONVERSION OF DEBENTURES
Section 15.01. Right to Convert. (a) Subject to and upon compliance
with the provisions of this Indenture, at any time prior to the close of
business on June 15, 2034, the holder of any Debenture shall have the right, at
such holder's option, to convert each $1,000 Original Principal Amount of the
Debentures and integral multiples thereof, into fully paid and non-assessable
shares of Common Stock (as such shares shall then be constituted) at the
Conversion Rate in effect at such
71
time, subject to Section 15.01(d) and subject to the Company's ability to elect
to deliver cash or a combination of cash and Common Stock in lieu of Common
Stock pursuant to Section 15.03, by surrender of the Debenture so to be
converted in whole or in part, together with any required funds, under the
circumstances described in this Section 15.01 and in the manner provided in
Section 15.02. The Debentures shall be convertible only during the following
periods upon the occurrence of one of the following events:
(i) (A) during any fiscal quarter commencing after July
31, 2004, if the Last Reported Sale Price for the Common Stock for at
least twenty (20) Trading Days during the period of thirty (30)
consecutive Trading Days ending on the last Trading Day of the
preceding fiscal quarter is greater than or equal to 131.30% of the
Conversion Price on such last Trading Day; provided that once such
threshold is met, the Debenture will thereafter be convertible at any
time at the option of the holder, through the Stated Maturity;
(ii) in the event that the Company calls any or all of the
Debentures for redemption, at any time prior to the close of business
on the second Business Day immediately preceding the Redemption Date
after which time the right to convert such Debentures will expire,
unless the Company fails to pay the Redemption Price; provided that
only those Debentures that are called for redemption may be converted
following such an event;
(iii) during the five (5) Business Day period after any
five (5) consecutive Trading Day period in which the Trading Price per
Debenture, as determined following a request by a holder in accordance
with the procedures described below, for each day of that period is
less than 98% of the product of the Conversion Rate and the Last
Reported Sale Price of the Common Stock for each day during such
period; provided that if, on the date of any conversion pursuant to
this Section 15.01(a)(iii), that is on or after June 15, 2029, the Last
Reported Sale Price of the Common Stock is greater than the Conversion
Price but less than 131.30% thereof, then the holders of Debentures
surrendered for conversion will receive, in lieu of Common Stock based
on the Conversion Rate, an amount in cash, shares of Common Stock, or a
combination thereof, equal to the Accreted Principal Amount of the
Debentures converted, plus accrued and unpaid Interest, to but
excluding the Conversion Date (a "PRINCIPAL VALUE CONVERSION"). Any
Common Stock delivered upon a Principal Value Conversion will be valued
at the average of the Last Reported Sale Prices of Common Stock for a
five Trading Day period starting on the third Trading Day following the
Conversion Date; or
(iv) as provided in Section (b) of this Section 15.01.
72
In connection with any conversion pursuant to Section 15.01(a)(iii),
the Trustee shall have no obligation to obtain the bids necessary for the
Company to determine the Trading Price of the Debentures unless the Company has
requested it to do so, and the Company shall have no obligation to make such
request unless a holder provides the Company with reasonable evidence that the
Trading Price per Debenture is less than 98% of the product of the Last Reported
Sale Price of the Common Stock and the Conversion Rate. At such time, the
Company will instruct the Trustee to obtain the bids (in the manner described in
the definition of Trading Price) beginning on the next Trading Day and on each
successive Trading Day until the Trading Price per Debenture is greater than or
equal to 98% of the product of the Last Reported Sale Price of the Common Stock
and the Conversion Rate.
The Company or its designated agent shall determine on a daily basis
during the time period specified in Section 15.01(a)(i) and 15.01(a)(iii)
whether the Debentures shall be convertible as a result of the occurrence of an
event specified in clause (i) or (iii) above and, if the Debentures shall be so
convertible, the Company shall promptly deliver to the Trustee (or other
Conversion Agent appointed by the Company) written notice thereof. Whenever the
Debentures shall become convertible pursuant to this Section 15.01, the Company
or, at the Company's request, the Trustee in the name and at the expense of the
Company, shall notify the holders of the event triggering such convertibility in
the manner provided in Section 16.02, and the Company shall also publicly
announce such information by publication on the Company's Web site or through
such other public medium as it may use at such time. Any notice so given shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice.
The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to Section 15.01(a) hereof, and the
Company agrees, if requested by the Trustee, to cooperate with, and provide
assistance to, the Trustee in carrying out its duties under this Section 15.01;
provided, however, that nothing herein shall be construed to relieve the Trustee
of its duties pursuant to Section 15.01(a) hereof.
(b) In addition, if:
(i) (A) the Company distributes to all holders of Common
Stock rights or warrants entitling them to subscribe for or purchase
(for a period expiring within 45 days of the date of the distribution)
shares of Common Stock at less than the Last Reported Sale Price of the
Common Stock on the Trading Day immediately preceding the declaration
date of the distribution, or (B) the Company distributes to all holders
of Common Stock, assets, debt securities or rights to purchase
securities of the Company, which distribution has a per share value as
determined by the Board of Directors and set forth in a Board
Resolution exceeding 10% of
73
the Last Reported Sale Price of the Common Stock on the Trading Day
immediately preceding the declaration date for such distribution, then,
in either case, the Debentures may be surrendered for conversion at any
time on and after the date that the Company gives notice to the holders
of such distribution, which shall be not less than 20 Business Days
prior to the Ex-Dividend Date for such distribution, until the earlier
of the close of business on the Business Day immediately preceding, but
not including, the Ex-Dividend Date or the date the Company publicly
announces that such distribution will not take place; provided that no
holder may exercise this right to convert if the holder will otherwise
participate in such distribution without conversion;
(ii) the Company consolidates with or merges with or into
another Person, is a party to a binding share exchange or transfers all
or substantially all of its assets, in each case pursuant to which the
Common Stock is converted into (A) cash or property other than
securities, or (B) cash, securities or other property, provided that in
the case of clause (B), such transaction also constitutes a Fundamental
Change, then the Debentures may be surrendered for conversion at any
time from and after the date which is fifteen (15) days prior to the
anticipated effective date of the transaction until and including the
date which is fifteen (15) days after the actual effective date
("EFFECTIVE DATE") of the transaction (or if such consolidation,
merger, share exchange or transfer also constitutes a Fundamental
Change, until the Fundamental Change Repurchase Date corresponding to
such Fundamental Change). The Board of Directors shall determine the
anticipated Effective Date of the transaction, and such determination
shall be conclusive and binding on the holders and shall be publicly
announced by the Company by publication on its Web site or through such
other public medium as it may use at that time not later than two (2)
Business Days prior to such 15th day;
(c) A Debenture in respect of which a holder is electing to
exercise its option to require repurchase upon a Fundamental Change pursuant to
Section 3.05 or repurchase pursuant to Section 3.06 may be converted only if
such holder withdraws its election in accordance with Section 3.08(d). A holder
of Debentures is not entitled to any rights of a holder of Common Stock until
such holder has converted his Debentures into Common Stock, and only to the
extent such Debentures are deemed to have been converted to Common Stock under
this Article 15.
(d) If a Debentureholder elects to convert its debentures in
connection with a specified corporate transaction pursuant to Section 15.01(b)
that occurs prior to June 15, 2011, and the corporate transaction also
constitutes a Fundamental Change, such Debentureholder will be entitled to
receive, in addition to a number of shares of Common Stock equal to the
Conversion Rate per $1,000 Original Principal Amount of Debentures, an
additional number of shares of Common Stock (the "ADDITIONAL SHARES") as
described below, subject
74
in each case to the Company's payment elections as described in Section 15.03;
provided that if the Stock Price is equal to or greater than $125.00 or less
than $41.04 (subject in each case to adjustment as described below), the number
of Additional Shares shall be zero.
The number of Additional Shares will be determined by reference to the
table attached as Schedule A hereto, based on the Effective Date and the Stock
Price; provided that if the Stock Price is between two Stock Price amounts in
the table or the Effective Date is between two Effective Dates in the table, the
number of Additional Shares will be determined by a straight-line interpolation
between the number of Additional Shares set forth for the higher and lower Stock
Price amounts and the two dates, as applicable, based on a 365-day year.
The Stock Prices set forth in the first row of the table in Schedule A
hereto and set forth in the paragraph (d) above will be adjusted as of any date
on which the Conversion Rate of the Debentures is adjusted. The adjusted Stock
Prices will equal the Stock Prices applicable immediately prior to such
adjustment, multiplied by a fraction, the numerator of which is the Conversion
Rate immediately prior to the adjustment giving rise to the Stock Price
adjustment and the denominator of which is the Conversion Rate as so adjusted.
The number of Additional Shares will be adjusted in the same manner as the
Conversion Rate as set forth Section 15.05.
Notwithstanding the foregoing, in no event will the total number of
shares of Common Stock issuable upon conversion exceed 24.3665 per $1,000
Original Principal Amount of Debentures, subject to adjustments in the same
manner as the Conversion Rate as set forth in Section 15.05.
Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such holder, the Corporate Trust Office,
such Debenture with the original or facsimile of the form entitled "FORM OF
CONVERSION NOTICE" on the reverse thereof, duly completed and manually signed,
together with such Debentures duly endorsed for transfer, accompanied by the
funds, if any, required by this Section 15.02. 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 shall be issuable on such
conversion shall be issued, and to whom the cash payable on such conversion
shall be delivered, and shall be accompanied by transfer or similar taxes, if
required pursuant to Section 15.07.
In order to exercise the conversion privilege with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by
75
book-entry delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
Conversion Agent, and pay the funds, if any, required by this Section 15.02 and
any transfer taxes if required pursuant to Section 15.07.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, but no later than the fifth Business Day after the
Conversion Date (as defined below), subject to Section 15.03 hereof and subject
to compliance with any restrictions on transfer if shares issuable on conversion
are to be issued in a name other than that of the Debentureholder (as if such
transfer were a transfer of the Debenture or Debentures (or portion thereof) so
converted), the Company shall issue and shall deliver through the Conversion
Agent to such Debentureholder at the office or agency maintained by the Company
for such purpose pursuant to Section 5.02, a certificate or certificates for the
number of full shares of Common Stock issuable upon the conversion of such
Debenture or portion thereof as determined by the Company in accordance with the
provisions of this Article 15, or if the Common Stock is eligible for transfer
through The Depository Trust Company, the Company shall make a book-entry
transfer of such number of shares of Common Stock through The Depository Trust
Company, and a check or cash in respect of any fractional interest in respect of
a share of Common Stock arising upon such conversion, calculated by the Company
as provided in Section 15.03. In case any Debenture of a denomination greater
than $1,000 shall be surrendered for partial conversion, and subject to Section
2.03, the Company shall execute and the Trustee shall authenticate and deliver
to the holder of the Debenture so surrendered, without charge to him, a new
Debenture or Debentures in authorized denominations in an aggregate Original
Principal Amount equal to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 15.02 have been satisfied as to such Debenture (or portion
thereof) (such date, the "CONVERSION DATE"), and the Person in whose name any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become on said date the holder of record
of the shares represented thereby; provided that any such surrender on any date
when the stock transfer books of the Company shall be 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 Rate in effect on
the date upon which such Debenture shall be surrendered.
Any Debenture or portion thereof surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the immediately following Interest Payment Date shall be accompanied
by payment, in immediately available funds or other funds acceptable to the
Company, of an amount equal to the Interest otherwise payable
76
on such Interest Payment Date on the Original Principal Amount being converted;
provided that no such payment need be made (1) if the Company has specified a
Redemption Date that is after a Regular Record Date and on or prior to the
Business Day immediately following the next Interest Payment Date, (2) if the
Company has specified a Repurchase Date following a Fundamental Change that is
after a Regular Record Date and prior to the next Interest Payment Date or (3)
to the extent of any overdue Interest, if any overdue Interest exists at the
time of conversion with respect to such Debenture. Except as provided above in
this Section 15.02, no payment or other adjustment shall be made for Interest
accrued on any Debenture converted (other than the payment of Additional
Amounts, if any) or for dividends on any shares issued upon the conversion of
such Debenture as provided in this Article 15.
Upon the conversion of an interest in a Global Debenture, the Trustee
(or other Conversion Agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other Conversion Agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
Original Principal Amount represented thereby. The Company shall notify the
Trustee in writing of any conversions of Debentures effected through any
Conversion Agent other than the Trustee.
Upon the conversion of a Debenture, that portion of the accrued but
unpaid Interest with respect to the converted Debenture shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
holder thereof through delivery of the Common Stock (together with the cash
payment, if any in lieu of fractional shares) in exchange for the Debenture
being converted pursuant to the provisions hereof; and the fair market value of
such shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for and in satisfaction of the Company's obligation to pay the Accreted
Principal Amount of the converted Debenture and the accrued but unpaid Interest,
and the balance, if any, of such fair market value of such Common Stock (and any
such cash payment) shall be treated as issued in exchange for and in
satisfaction of the right to convert the Debenture being converted pursuant to
the provisions hereof.
Section 15.03. Payment Upon Conversion; Cash Payments in Lieu of
Fractional Shares. (a) In the event that the Company receives notice of
conversion on or prior to the day that is twenty (20) days prior to Stated
Maturity or, with respect to Debentures being redeemed, the applicable
Redemption Date (the "FINAL NOTICE DATE"), the following procedures will apply:
If the Company chooses to satisfy all or any portion of the Company's
obligation (the "CONVERSION OBLIGATION") in cash, the Company will notify the
holder through the Trustee of the dollar amount to be satisfied in cash (which
must be expressed either as 100% of the Conversion Obligation or as a fixed
dollar amount) at any time on or before the date that is two Business Days
following receipt of the notice of conversion ("CASH SETTLEMENT NOTICE PERIOD").
77
If the Company timely elects to pay cash for any portion of the shares otherwise
issuable to such holder, the conversion notice may be retracted by the holder at
any time during the two Business Day period beginning on the day after the final
day of the Cash Settlement Notice Period ("CONVERSION RETRACTION PERIOD"); no
such retraction can be made (and a conversion notice shall be irrevocable) if
the Company does not elect to deliver cash in lieu of shares (other than cash in
lieu of fractional shares). If the conversion notice has not been retracted,
then settlement (in cash and/or shares) will occur on the Business Day following
the final day of the ten (10) Trading Day period beginning on the day after the
final day of the Conversion Retraction Period. Settlement amounts will be
computed as follows:
(i) If the Company elects to satisfy the entire
Conversion Obligation in shares, the Company will deliver to holders
surrendering Debentures for conversion a number of shares equal to (1)
the aggregate Original Principal Amount of Debentures to be converted
divided by 1,000 multiplied by (2) the sum of the Conversion Rate and
the applicable number of Additional Shares issuable upon conversion of
$1,000 Original Principal Amount of Debentures, if any, as described in
Section 15.01(d).
(ii) If the Company elects to satisfy the entire
Conversion Obligation in cash, the Company will deliver to holders
surrendering Debentures for conversion cash in an amount equal to the
product of:
(A) a number equal to (1) the aggregate Original
Principal Amount of Debentures to be converted divided by
1,000 multiplied by (2) the sum of the Conversion Rate and the
applicable number of Additional Shares issuable upon
conversion of $1,000 Original Principal Amount of Debentures,
if any, as described in Section 15.01(d), and
(B) the average of the Last Reported Sale Prices
of the Common Stock for the ten (10) consecutive Trading Days
immediately following the date of the Company's notice of its
election to deliver cash (the "CASH SETTLEMENT AVERAGING
PERIOD").
(iii) If the Company elects to satisfy in cash a fixed
portion of the Conversion Obligation other than the entire obligation,
or a percentage of the Conversion Obligation other than 100%, the
Company will deliver to holders surrendering Debentures for conversion
such cash amount ("CASH AMOUNT") and a number of shares equal to the
excess, if any, of the number of shares equal to (i) the aggregate
Original Principal Amount of Debentures to be converted divided by
1,000, multiplied by (ii) the sum of the Conversion Rate and the
applicable number of Additional Shares issuable upon conversion of
$1,000 Original Principal Amount of Debentures, if any, as described in
Section 15.01(d), over the number of shares equal to the sum, for each
day of the Cash Settlement Averaging
78
Period, of (x) 10% of the Cash Amount (other than cash for fractional
shares of Common Stock), divided by (y) the Last Reported Sale Price of
the Common Stock. In addition, the Company will pay cash for all
fractional shares of Common Stock as described in Section 15.03(c)
below.
(b) In the event that the Company receives notice of conversion
after the Final Notice Date, the Company will not send individual notices of its
election to satisfy all or any portion of the Conversion Obligation in cash.
Instead, if the Company chooses to satisfy all or any portion of the Conversion
Obligation in cash, the Company will send a single notice to the Trustee of the
dollar amount to be satisfied in cash (which must be expressed either as 100% of
the Conversion Obligation or as a fixed dollar amount) at any time on or before
the Final Notice Date. Settlement amounts will be computed in the same manner as
set forth under Section 15.03(a) above except that the "Cash Settlement
Averaging Period" shall be the five consecutive Trading Days ending on the third
Trading Day prior to the Conversion Date. For purposes of the formula set forth
in Section 15.03(a)(iii), 20% shall be used instead of 10%. Settlement (in cash
and/or shares) will occur on the Business Day following the final day of such
Cash Settlement Averaging Period.
In addition, if a Debentureholder elects to convert its Debentures
under Section 15.01(b) and it is entitled to Additional Shares, the Company will
not send individual notices of its election to satisfy all or any portion of the
Conversion Obligation in cash. Instead, if the Company chooses to satisfy all or
any portion of the Conversion Obligation in cash, the Company will send a single
notice to the Trustee of the dollar amount to be satisfied in cash (which must
be expressed either as 100% of the Conversion Obligation or as a fixed dollar
amount) in connection with the announcement of the relevant corporate
transaction. Settlement amounts will be computed in the same manner as set forth
above under Section 15.03(a) except that (a) the reference to the average of the
Last Reported Sale Prices of the Common Stock during the Cash Settlement
Averaging Period in Section 15.03(a)(ii)(B) shall mean the Stock Price used to
determine the number of Additional Shares, (b) (i) the Cash Settlement Averaging
Period referred to in Section 15.03(a)(iii) shall be the five consecutive
Trading Days up to but not including the Effective Date of the relevant
corporate transaction and (ii) if holders of Common Stock receive only cash in
such corporate transaction, the "Last Reported Sale Price of Common Stock"
referred to Section 15.03(a)(iii)(y) shall be deemed to be equal to such cash
received per share, and (c) for purposes of the formula set forth in Section
15.03(a)(iii), 20% shall be used instead of 10%. Settlement will occur as
promptly as practicable after the later of the Conversion Date and the Effective
Date of the relevant corporate transaction.
(c) No fractional shares of Common Stock or scrip certificates
representing fractional shares shall be issued upon conversion of Debentures. If
79
more than one Debenture shall be surrendered for conversion at one time by the
same holder, the number of full shares that shall be issuable upon conversion
shall be computed on the basis of the aggregate Original Principal Amount of the
Debentures (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of stock would be issuable upon the
conversion of any Debenture or Debentures, the Company shall make an adjustment
and payment therefor in cash to the holder of Debentures at the Last Reported
Sale Price on the last Trading Day immediately preceding the day on which the
Debentures (or specified portions thereof) are deemed to have been converted.
(d) Notwithstanding anything to the contrary in this Indenture, at
any time prior to Stated Maturity, the Company may irrevocably elect, in its
sole discretion without the consent of the holders of the Debentures, by notice
to the Trustee and the holders of the Debentures to satisfy in cash 100% of the
Accreted Principal Amount of the Debentures converted after the date of such
election. After making such an election, the Company still may satisfy the
remainder of the Conversion Obligation to the extent it exceeds the Accreted
Principal Amount in cash or Common Stock or a combination of cash and Common
Stock. If the Company chooses to satisfy all or a portion of the remainder of
the Conversion Obligation in cash, the Company will provide notice of such
election in the same manner as set forth above under either clause (a) or (b),
whichever is applicable. If the Company chooses to satisfy all of the remainder
of the Conversion Obligation in Common Stock, notice of the election to deliver
cash for the Accreted Principal Amount will be deemed to have been provided on
the last date of the Cash Settlement Notice Period and the notice of conversion
will not be retractable. Settlement amounts will be computed and settlement
dates will be determined in the same manner as set forth above under clause (a)
or (b), as applicable.
Section 15.04. Conversion Rate. Each $1,000 Original Principal Amount
of the Debentures shall be convertible into the number of shares of Common Stock
specified in the form of Debenture (herein called the "CONVERSION RATE")
attached as Exhibit A hereto (initially 18.8434 shares), subject to adjustment
as provided in this Article 15.
Section 15.05. Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:
(a) If the Company issues shares of Common Stock as a dividend or
distribution on shares of the Common Stock, or effects a share split or share
combination, the Conversion Rate will be adjusted based on the following
formula:
OS'
CR' = CR(0) x ------
OS(0)
80
where,
CR(0) = the Conversion Rate in effect immediately prior to such event
CR' = the Conversion Rate in effect immediately after such event
OS(0) = the number of shares of Common Stock outstanding immediately
prior to such event
OS' = the number of shares of Common Stock outstanding immediately
after such event.
Such adjustment shall become effective immediately after the opening of business
on the Business Day following the date fixed for such determination. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in treasury by the Company. If any dividend or distribution of the type
described in this Section 15.05(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.
(b) If the Company issues to all or substantially all holders of
its Common Stock any rights or warrants entitling them for a period of not more
than 45 days to subscribe for or purchase shares of Common Stock, at a price per
share less than the Last Reported Sale Price of shares of Common Stock on the
Business Day immediately preceding the time of announcement of such issuance,
the Conversion Rate will be adjusted based on the following formula (provided
that the Conversion Rate will be readjusted to the extent that such rights or
warrants are not exercised prior to their expiration):
OS(0) + X
CR' = CR(0) x -----------
OS(0) + Y
where,
CR(0) = the Conversion Rate in effect immediately prior to such event
CR' = the Conversion Rate in effect immediately after such event
OS(0) = the number of shares of Common Stock outstanding immediately
prior to such event
X = the total number of shares of Common Stock issuable pursuant
to such rights
Y = the number of shares of Common Stock equal to the aggregate
price payable to exercise such rights divided by the average
of the Last Reported Sale Prices of Common Stock for the ten
consecutive Trading Days prior to the Business Day
81
immediately preceding the Record Date for the issuance of
such rights.
Such adjustment shall be successively made whenever any such rights or warrants
are issued and shall become effective immediately after the opening of business
on the Business Day following the date fixed for such determination. The Company
shall not issue any such rights, options or warrants in respect of shares of
Common Stock held in treasury by the Company. To the extent that shares of
Common Stock are not delivered after the expiration of such rights or warrants,
the Conversion Rate shall be readjusted to the Conversion Rate that 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 Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such date fixed for the determination of shareholders
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 Last Reported Sale
Price, and in determining the aggregate offering price of such shares of Common
Stock, there shall be taken into account any consideration received by the
Company for such rights or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) If the Company distributes shares of its capital stock,
evidences of its indebtedness or other assets or property of the Company to all
or substantially all holders of the Common Stock, excluding:
(i) dividends, distributions and rights or warrants
referred to in clause (a) or (b) above; and
(ii) dividends or distributions paid exclusively in cash;
then the Conversion Rate will be adjusted based on the following
formula:
SP(0)
CR' = CR(0) x -------------
Sp(0) - FMV
where,
CR(0) = the Conversion Rate in effect immediately prior to such
distribution
CR' = the Conversion Rate in effect immediately after such
distribution
82
SP(0) = the average of the Last Reported Sale Prices of the Common
Stock for the ten days prior to the Business Day immediately
preceding the record date for such distribution
FMV = the fair market value (as determined by the Board of
Directors) of the shares of capital stock, evidences of
indebtedness, assets or property distributed with respect to
each outstanding share of Common Stock on the Record Date for
such distribution.
Such adjustment shall become effective immediately prior to the opening of
business on the Business Day following the date fixed for the determination of
shareholders entitled to receive such distribution.
With respect to an adjustment pursuant to this clause (c) where there has been a
payment of a dividend or other distribution on the Common Stock or shares of
capital stock of any class or series, or similar equity interest, of or relating
to a subsidiary or other business unit (a "SPIN-OFF") the Conversion Rate in
effect immediately before the close of business on the Record Date fixed for
determination of shareholders entitled to receive the distribution will be
increased based on the following formula:
FMV(0) + MP(0)
CR' = CR(0) x ----------------
MP(0)
where,
CR(0) = the Conversion Rate in effect immediately prior to such
distribution
CR' = the Conversion Rate in effect immediately after such
distribution
FMV(0) = the average of the Last Reported Sale Prices of the capital
stock or similar equity interest distributed to holders of
Common Stock applicable to one share of Common Stock over the
first 10 Trading Days after the effective date of the Spin-Off
MP(0) = the average of the Last Reported Sale Prices of Common Stock
over the first 10 consecutive Trading Days after the effective
date of the Spin-Off.
Such adjustment shall occur on the tenth Trading Day from, and
including, the effective date of the Spin-Off.
(d) If the Company makes any cash dividend or distribution during
any quarterly fiscal period to all or substantially all holders of Common Stock,
in an aggregate amount that, together with other cash dividends or distributions
made during such quarterly fiscal period, exceeds the product of $0.16
(appropriately
83
adjusted from time to time for any share dividends on or subdivisions of the
Common Stock) multiplied by the number of shares of Common Stock outstanding on
the Record Date for such distribution, the Conversion Rate will be adjusted
based on the following formula:
SP(0)
CR' = CR(0) x -----------
SP(0) - C
where,
CR(0) = the Conversion Rate in effect immediately prior to the Record
Date for such distribution
CR' = the Conversion Rate in effect immediately after the Record
Date for such distribution
SP(0) = the average of the Last Reported Sale Prices of the Common
Stock for the ten consecutive Trading Days prior to the
Business Day immediately preceding the Record Date of such
distribution
C = the amount in cash per share the Company distributes to
holders of Common Stock that exceeds $0.16 (appropriately
adjusted from time to time for any share dividends on, or
subdivisions of, Common Stock).
Such adjustment shall become effective immediately after the close of
business on the date for such determination.
(e) If the Company or any of its Subsidiaries purchases shares of
the Common Stock pursuant to a tender or exchange offer which involves an
aggregate per share consideration that exceeds the Last Reported Sale Price of
the Common Stock on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer (such
last date, the "EXPIRATION TIME"), the Conversion Rate will be increased based
on the following formula:
AC + (SP' x OS')
CR' = CR(0) x ------------------
OS(0) x SP'
where,
CR(0) = the Conversion Rate in effect on the date such tender offer
expires
CR' = the Conversion Rate in effect on the day next succeeding the
date such tender offer expires
84
AC = the aggregate value of all cash and any other consideration
(as determined by the Board of Directors) paid or payable for
shares purchased in such tender offer
OS(0) = the number of shares of Common Stock outstanding immediately
prior to the date such tender offer expires
OS' = the number of shares of Common Stock outstanding immediately
after the date such tender offer expires
SP' = the average of the Last Reported Sale Prices of Common Stock
for the ten consecutive trading days commencing on the Trading
Day next succeeding the date such tender offer expires.
If the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such tender or exchange offer had not been made.
If, however, the application of the foregoing formula would result in a decrease
in the Conversion Rate, no adjustment to the Conversion Rate will be made.
Except as stated herein, the Company will not adjust the Conversion Rate for the
issuance of shares of Common Stock or any securities convertible into or
exchangeable for shares of Common Stock or the right to purchase shares of
Common Stock or such convertible or exchangeable securities.
(f) [Reserved]
(g) Notwithstanding the foregoing provisions of this Section
15.05, no adjustment shall be made thereunder, nor shall an adjustment be made
to the ability of a Holder of a Debenture to convert, for any distribution
described therein if the Holder will otherwise participate in the distribution
without conversion of such Holder's Debentures.
(h) The Company may (but is not required to) make such increases
in the Conversion Rate, in addition to those required by clauses (a) through (e)
of this Section 15.05 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 in connection with a dividend or distribution of shares
(or rights to acquire shares) or any similar event treated as such for income
tax purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of at least
twenty (20) days if the Board of Directors shall have made a determination that
such increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
85
preceding sentence, the Company shall mail to holders of record of the
Debentures a notice of the increase at least fifteen (15) days prior to the date
the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect.
(i) No adjustment to the Conversion Rate need be made:
(i) upon the issuance of any shares of Common Stock
pursuant to any present or future plan providing for the reinvestment
of dividends or interest payable on securities of the Company and the
investment of additional optional amounts in shares of Common Stock
under any plan;
(ii) upon the issuance of any shares of Common Stock or
options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program of or
assumed by the Company or any of its Subsidiaries;
(iii) upon the issuance of any shares of Common Stock
pursuant to any option, warrant, right, or exercisable, exchangeable or
convertible security not described in (ii) above and outstanding as of
the date the Debentures were first issued;
(iv) for a change in the par value of the Common Stock; or
(v) for accrued and unpaid Interest.
To the extent the Debentures become convertible into cash, assets or property
(other than capital stock of the Company or securities to which Section 15.06
applies), no adjustment shall be made thereafter as to the cash, assets or
property. Interest shall not accrue on such cash, assets or property.
(j) All calculations under this Article 15 shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be.
(k) Whenever the Conversion Rate 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 Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Debenture at his
86
last address appearing on the Debenture Register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after (1) a record date or Stock
Record Date for an event, (2) the date fixed for the determination of
shareholders entitled to receive a dividend or distribution pursuant to Section
15.05(a), (3) a date fixed for the determination of shareholders entitled to
receive rights or warrants pursuant to Section 15.05(b) or (4) the Expiration
Time for any tender or exchange offer pursuant to Section 15.05(e), (each a
"DETERMINATION DATE"), the Company may elect to defer until the occurrence of
the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
holder of any Debenture converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to such
holder any amount in cash in lieu of any fraction pursuant to Section 15.03. For
purposes of this Section 15.05(l), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the
date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 15.05, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
Section 15.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.05(c) applies), (ii) any consolidation, merger,
binding share exchange or combination of the Company with another Person as a
result of which holders of Common Stock shall be entitled to receive cash,
securities or
87
other property with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of all or substantially all of the properties and assets
of the Company to any other Person as a result of which holders of Common Stock
shall be entitled to receive cash, securities or other property with respect to
or in exchange for such Common Stock, then the Company or the successor or
purchasing Person, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the Trust Indenture Act as in
force at the date of execution of such supplemental indenture) providing that
each Debenture shall be convertible into the kind and amount of cash, securities
or other property receivable upon such reclassification, change, consolidation,
merger, binding share exchange, combination, sale or conveyance by a holder of a
number of shares of Common Stock issuable upon conversion of such Debentures
(assuming, for such purposes, a sufficient number of authorized shares of Common
Stock are available to convert all such Debentures) immediately prior to such
reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of cash,
securities or other property receivable upon such reclassification, change,
consolidation, merger, binding share exchange, combination, sale or conveyance
(provided that, if the kind or amount of cash, securities or other property
receivable upon such reclassification, change, consolidation, merger, binding
share exchange, combination, sale or conveyance is not the same for each share
of Common Stock in respect of which such rights of election shall not have been
exercised ("NON-ELECTING SHARE"), then for the purposes of this Section 15.06
the kind and amount of cash, securities or other property receivable upon such
reclassification, change, consolidation, merger, binding share exchange,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 15.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, binding share
exchanges, combinations, sales and conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05
shall not apply.
Section 15.07. Taxes on Shares Issued. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any documentary, stamp or similar issue or transfer tax in
88
respect of the issue thereof. The Company shall not, however, be required to pay
any such 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
Debenture 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 15.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Debentures from time to time as such Debentures are
presented for conversion.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Debentures, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue 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 covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the New York Stock Exchange, Nasdaq National Market or any
other national securities exchange or automated quotation system, the Company
will, if permitted by the rules of such exchange or automated quotation system,
list and keep listed, so long as the Common Stock shall be so listed on such
exchange or automated quotation system, all Common Stock issuable upon
conversion of the Debentures; provided that if the rules of such exchange or
automated quotation system permit the Company to defer the listing of such
Common Stock until the first conversion of the Debentures into Common Stock in
accordance with the provisions of this Indenture, the Company covenants to list
such Common Stock issuable upon conversion of the Debentures in accordance
89
with the requirements of such exchange or automated quotation system at such
time.
Section 15.09. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
the Company or any holder of Debentures to determine the Conversion Rate or
whether any facts exist which may require any adjustment of the Conversion Rate,
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
and any other Conversion Agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Debenture; and the Trustee and any other Conversion Agent
make no representations with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Debenture for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article 15. Without limiting the
generality of the foregoing, neither the Trustee nor any Conversion Agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 15.06
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Debentureholders upon the conversion of
their Debentures after any event referred to in such Section 15.06 or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Section 8.01, 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 15.10. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a
90
party and for which approval of any shareholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture Register provided
for in Section 2.05 of this Indenture, as promptly as possible but in any event
at least ten (10) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. 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.
Section 15.11. Shareholder Rights Plan. To the extent that the Company
has a rights plan in effect upon conversion of the Debentures into Common Stock,
the Debentureholder will receive, in addition to the Common Stock, the rights
under the rights plan, unless prior to any conversion, the rights have separated
from the Common Stock, in which case the Conversion Rate will be adjusted at the
time of separation as if the Company distributed to all holders of Common Stock,
shares of the Company's capital stock, evidences of indebtedness or assets as
described in Section 15.04(c) above, subject to readjustment in the event of the
expiration, termination or redemption of such rights. In lieu of any such
adjustment, the Company may amend such applicable shareholder rights agreement
to provide that upon conversion of the debentures the holders will receive, in
addition to the Common Stock issuable upon such conversion, the rights which
would have attached to such Common Stock if the rights had not become separated
from the Common Stock under such applicable shareholder rights agreement.
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
91
Section 16.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 16.03 Addresses for Notices, Etc.. Any request, notice or
demand which by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of Debentures on the Company
shall be deemed to have been sufficiently given or made, for all purposes, if
delivered by messenger or overnight carrier, given or served by being deposited
postage prepaid by registered or certified mail in a post office letter box or
sent by telecopier transmission addressed as follows: to Kellwood Company, 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Telecopier No.: (000) 000-0000,
Attention: Treasurer. Any notice, direction, request or demand hereunder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if delivered by messenger or overnight carrier, given or served by
being deposited, postage prepaid, by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed as follows: Union
Bank of California, N.A., 120 S, San Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxx, XX
00000, Telecopier No.: (000) 000-0000, Attention: Corporate Trust Department;
provided, however, that the Trustee shall not be deemed to have received notice
until such notice is actually received.
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 16.04. Governing Law. This Indenture and each Debenture shall
be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York (including Section 5-1401 of the New York General Obligations Law or any
successor to such statute).
Section 16.05. Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon any application, request or demand by the Company
to the Trustee to take any action under any of the provisions of this
92
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.06. Legal Holidays. In any case in which the date of
maturity of Interest on or principal of the Debentures or the Redemption Date of
any Debenture or any Repurchase Date with respect to any Debenture will not be a
Business Day, then payment of such Interest on or the Accreted Principal Amount
of the Debentures need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the Redemption Date or the Repurchase Date, as the case may be, and
no interest shall accrue for the period from and after such date.
Section 16.07. Company Responsible for Making Calculations. The Company
will be responsible for making all calculations called for under this Indenture.
These calculations include, but are not limited to, determination of the Last
Reported Sale Price, Spin-Off Market Price and Trading Price, the amount of
accrued Interest (including any Contingent Interest and Additional Amounts)
payable on the Debentures, the Accreted Principal Amount and the Conversion Rate
of the Debentures. The Company will make these calculations in good faith and,
absent manifest error, these calculations will be final and binding on the
Debentureholders. Promptly after the calculation thereof, the Company will
provide to each of the Trustee and the Conversion Agent an Officers' Certificate
setting forth a schedule of its calculations, and each of the Trustee and the
Conversion Agent is entitled to conclusively rely upon the accuracy of such
calculations without independent verification. The Trustee will forward the
Company's calculations to any Holder upon the written request of such Holder.
Section 16.08. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Debentures issued hereunder shall not be
subject
93
to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of
the Trust Indenture Act as now in effect or as hereafter amended or modified;
provided further that this Section 16.08 shall not require this Indenture or the
Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
Section 16.09. No Security Interest Created. Except as provided in
Section 8.06, nothing in this Indenture or in the Debentures, expressed or
implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect, in any jurisdiction in which property of the Company or its subsidiaries
is located.
Section 16.10. Benefits of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent, any authenticating agent, any Debenture
Registrar and their successors hereunder and the holders of Debentures, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.11. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.12. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.02 and 3.08, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Debentures. For all purposes of this Indenture, the authentication and
delivery of Debentures by the authenticating agent shall be deemed to be
authentication and delivery of such Debentures "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Debentures for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 8.09.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from
94
any merger, consolidation or conversion to which any authenticating agent shall
be a party, or any corporation succeeding to the corporate trust business of any
authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.12, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 8.02, 8.03, 8.04 and 9.03 and this Section
16.12 shall be applicable to any authenticating agent.
Section 16.13. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 16.14. Severability. In case any provision in this Indenture or
in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Union Bank of California, N.A. hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
95
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
KELLWOOD COMPANY
By: /s/ W. Xxx Xxxxx, III
-------------------------------
Name: W. Xxx Xxxxx, III
Title: Executive Vice President
Finance & Chief Financial
Officer
UNION BANK OF CALIFORNIA, N.A.,
as Trustee
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
SCHEDULE A
The following table sets forth the number of Additional Shares to be received
per $1,000 Original Principal Amount of Debentures:
Stock Price $ 41.04 $ 47.00 $ 53.00 $ 59.00 $ 65.00 $ 71.00 $ 77.00
Effective Date
June 15, 2004 5.6231 4.2216 3.0930 2.2927 1.7114 1.2809 0.9571
June 15, 2005 5.6231 4.2157 3.0474 2.2296 1.6435 1.2152 0.8974
June 15, 2006 5.6231 4.1348 2.9339 2.1074 1.5258 1.1087 0.8050
June 15, 2007 5.6231 4.1155 2.8467 1.9916 1.4048 0.9949 0.7037
June 15, 2008 5.6231 3.9259 2.6062 1.7456 1.1781 0.7987 0.5409
June 15, 2009 5.6231 3.6689 2.2686 1.4017 0.8691 0.5414 0.3374
June 15, 2010 5.6231 3.2164 1.6815 0.8303 0.3952 0.1862 0.0885
June 15, 2011 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
Stock Price $ 83.00 $ 89.00 $ 95.00 $ 101.00 $ 107.00 $ 113.00 $ 119.00 $ 125.00
Effective Date
June 15, 2004 0.7101 0.5205 0.3741 0.2609 0.1738 0.1072 0.0568 0.0000
June 15, 2005 0.6577 0.4757 0.3368 0.2306 0.1495 0.0883 0.0426 0.0000
June 15, 2006 0.5793 0.4109 0.2842 0.1888 0.1169 0.0634 0.0244 0.0000
June 15, 2007 0.4938 0.3409 0.2281 0.1451 0.0842 0.0395 0.0097 0.0000
June 15, 2008 0.3629 0.2385 0.1497 0.0864 0.0415 0.0096 0.0000 0.0000
June 15, 2009 0.2079 0.1252 0.0677 0.0290 0.0041 0.0000 0.0000 0.0000
June 15, 2010 0.0414 0.0160 0.0001 0.0000 0.0000 0.0000 0.0000 0.0000
June 15, 2011 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
EXHIBIT A
[Include only for Global Debentures:]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
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 REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.]
[Include only for Debentures that are Restricted Securities:]
[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")); (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO KELLWOOD
COMPANY (THE "ISSUER"), (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT
REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM;
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO
CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION).]
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS DEBENTURE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT.
THE ISSUE PRICE OF EACH DEBENTURE IS $1,000 PER $1,000 OF ORIGINAL PRINCIPAL
AMOUNT, AND THE ISSUE DATE IS JUNE 22, 2004. IN ADDITION, THIS DEBENTURE IS
SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING CONTINGENT
PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS DEBENTURE IS 7.65%,
COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES).
THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN THIS
DEBENTURE EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS DEBENTURE WILL BE DEEMED
TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS
DEBENTURE AS A DEBT INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE
"CONTINGENT PAYMENT REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE OF ANY
COMMON STOCK RECEIVED UPON ANY CONVERSION OF THIS DEBENTURE OR UPON A PURCHASE
OF THIS DEBENTURE AT THE HOLDER'S OPTION AS A CONTINGENT PAYMENT FOR PURPOSES OF
THE CONTINGENT PAYMENT REGULATIONS, AND (3) TO ACCRUE INTEREST WITH RESPECT TO
THE DEBENTURE AS ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES ACCORDING TO THE "NONCONTINGENT BOND METHOD," SET FORTH
A-2
IN THE CONTINGENT PAYMENT REGULATIONS], AND TO BE BOUND BY THE ISSUER'S
DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE," WITHIN
THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH RESPECT TO THIS
DEBENTURE. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS
DEBENTURE, UPON WRITTEN REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE
DISCOUNT, ISSUE DATE, YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT
SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING
ADDRESS: KELLWOOD COMPANY, 000 XXXXXXXX XXXXXXX, XXXXXXXXXXXX, XXXXXXXX 00000,
ATTN: TREASURER.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT DATED JUNE 22, 2004 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND
BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.
A-3
KELLWOOD COMPANY
3.50% CONVERTIBLE SENIOR DEBENTURE DUE 2034
CUSIP: 488044 AE 8
No. ___ ORIGINAL PRINCIPAL AMOUNT $[180,000,000]
Kellwood Company, a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "COMPANY", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to [CEDE & CO.] or
its registered assigns, the Accreted Principal Amount (as defined in the
Indenture referred to on the reverse side of this Security) on June 15, 2034 at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, 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, and to pay regular interest, semiannually on June 15
and December 15 of each year, commencing December 15, 2004, on the Original
Principal Amount set forth on Schedule I hereto at said office or agency, in
like coin or currency, at the rate per annum of 3.50%, from June 15 or December
15, as the case may be, next preceding the date of this Debenture to which
interest has been paid or duly provided for, unless the date hereof is a date to
which interest has been paid or duly provided for, in which case from the date
of this Debenture, or unless no interest has been paid or duly provided for on
the Debentures, in which case from June 22, 2004 until June 15, 2011.
Notwithstanding the foregoing, if the date hereof is after any June 1 or
December 1, as the case may be, and before the following June 15 or December 15,
this Debenture shall bear regular interest, if any, from such June 15 or
December 15; provided that if the Company shall default in the payment of
regular interest due on such June 15 or December 15, then this Debenture shall
bear regular interest from the next preceding June 15 or December 15 to which
regular interest has been paid or duly provided for; and provided further that
if no regular interest has been paid or duly provided for on this Debenture,
then this Debenture shall bear regular interest from June 22, 2004. Contingent
Interest will accrue for the period commencing on June 20, 2011 and ending
December 14, 2011 and thereafter for any six-month period commencing on December
15, 2011 under the circumstances and in the amounts described in Article 4 of
the Indenture and be payable semi-annually in arrears to the holders of this
Debenture on the applicable Contingent Interest Payment Date on the
corresponding Record Date. Except as otherwise provided in the Indenture,
Interest payable on the Debenture pursuant to the Indenture on any June 15 or
December 15 will be paid to the Person entitled thereto as it appears in the
Debenture Register at the close of business on the Regular Record Date, which
shall be the June 1 or December 1 (whether or not a Business Day) next preceding
such June 15 or December 15, as provided in the Indenture; provided that any
A-4
such Interest not punctually paid or duly provided for shall be payable as
provided in the Indenture. The Company shall pay Interest (i) on any Debentures
in certificated form by check mailed to the address of the Person entitled
thereto as it appears in the Debenture Register (or, upon written notice, by
wire transfer in immediately available funds, if such Person is entitled to
interest on Debentures with an aggregate Original Principal Amount in excess of
$2,000,000) or (ii) on any Global Debenture by wire transfer of immediately
available funds to the account of the Depositary or its nominee.
After June 15, 2011, the Company will not pay regular interest.
Instead, on June 15, 2034, the holder will receive the Accreted Principal
Amount, which will be equal to the Original Principal Amount increased daily at
a fixed yield equal to 0% per annum until June 14, 2011 and commencing on June
15, 2011 equal to 3.50% per annum, or $2,221.18 on June 15, 2034.
The Company promises to pay interest on overdue Accreted Principal
Amount and (to the extent that payment of such interest is enforceable under
applicable law) Interest at the rate of 3.50%, per annum, compounded
semi-annually.
Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Debenture the right to convert this Debenture into Common Stock,
cash or a combination of cash and Common Stock on the terms and subject to the
limitations referred to on the reverse hereof and as more fully specified in the
Indenture. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York (including Section 5-1401
of the New York General Obligations Law or any successor to such statute).
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
A-5
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.
KELLWOOD COMPANY
By: ________________________________
[Date of authentication]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
UNION BANK OF CALIFORNIA, N.A.
as Trustee
By: ___________________________________
Authorized Signatory
, or
By: ___________________________________
As Authenticating Agent
(if different from Trustee)
By: _______________________________
Authorized Signatory
A-6
FORM OF REVERSE OF DEBENTURE
KELLWOOD COMPANY
3.50% CONVERTIBLE SENIOR DEBENTURE DUE 2034
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 3.50% Convertible Senior Debentures due 2034 (herein
called the "DEBENTURES"), limited in aggregate Original Principal Amount to
$180,000,000 (or up to $200,000,000 if the Initial Purchasers exercise their
option in full), issued and to be issued under and pursuant to an Indenture
dated as of June 22, 2004 (herein called the "INDENTURE"), between the Company
and Union Bank of California, N.A., as trustee (herein called the "TRUSTEE"), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures.
In case an Event of Default shall have occurred and be continuing, the
Accreted Principal Amount of and accrued Interest on all Debentures may be
declared by either the Trustee or the holders of not less than 25% in aggregate
Original Principal Amount of the Debentures then outstanding, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
Original Principal Amount of the Debentures at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Debentures; provided that no such supplemental indenture shall (i) extend the
Stated Maturity of any Debenture, or reduce the rate or extend the time of
payment of Interest thereon, or reduce the Original Principal Amount thereof or
the Accreted Principal Amount thereof or the accretion rate thereon, or reduce
any amount payable upon redemption or repurchase thereof, or impair the right of
any Debentureholder to institute suit for the payment thereof, or make the
Accreted Principal Amount thereof or Interest thereon payable in any coin or
currency other than that provided in the Debentures, or affect the obligation of
the Company to redeem any Debenture on a Redemption Date in a manner adverse to
the holders, or affect the obligation of the Company to repurchase any Debenture
upon a Fundamental Change in a manner adverse to the holder of the Debentures,
or affect the obligation of the Company to repurchase any Debenture on a Company
Repurchase Date in a manner adverse to the holder of the Debentures, or impair
the right to convert the Debentures into Common Stock, cash or combination of
cash and Common Stock subject to the terms set forth in the Indenture, including
A-7
Section 15.06 thereof, or reduce the number of shares of Common Stock, the
amount of cash or the amount of other property receivable upon conversion, in
each case without the consent of the holder of each Debenture so affected, or
modify any of the provisions of Section 11.02 or Section 7.07 thereof, except to
increase any such percentage or to provide that certain other provisions of the
Indenture cannot be modified or waived without the consent of the holder of each
Debenture so affected, or reduce the quorum or voting requirements set forth in
Article 10 or (ii) reduce the aforesaid percentage in Original Principal Amount
of Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Debentures
then outstanding. Subject to the provisions of the Indenture, the holders of a
majority in aggregate Original Principal Amount of the Debentures at the time
outstanding may on behalf of the holders of all of the Debentures waive any past
default or Event of Default under the Indenture and its consequences except (A)
a default in the payment of Interest on or the Accreted Principal Amount of any
of the Debentures, (B) a failure by the Company to convert any Debentures into
Common Stock, cash or a combination of cash and Common Stock in accordance with
the terms of the Indenture, (C) a default in the payment of the Redemption Price
pursuant to Article 3 of the Indenture, (D) a default in the payment of the
Company Repurchase Price or Fundamental Change Repurchase Price pursuant to
Article 3 of the Indenture, or (E) a default in respect of a covenant or
provision of the Indenture which under Article 11 of the Indenture cannot be
modified or amended without the consent of the holders of each or all Debentures
then outstanding or affected thereby. Any such consent or waiver by the holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and any Debentures which may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Debenture or such other Debentures.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the Accreted Principal Amount of and
Interest on this Debenture at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Debentures are issuable in fully registered form, without interest
coupons, in denominations of $1,000 Original Principal Amount and any multiple
of $1,000. At the office or agency of the Company referred to on the face
hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection
A-8
with any registration or exchange of Debentures, Debentures may be exchanged for
a like aggregate Original Principal Amount of Debentures of any other authorized
denominations.
At any time on or after June 20, 2011 and prior to maturity, the
Debentures may be redeemed at the option of the Company, in whole or in part, in
cash upon mailing a notice of such redemption not less than 30 days but not more
than 60 days before the Redemption Date to the holders of Debentures at their
last registered addresses, all as provided in the Indenture, at a Redemption
Price equal to 100% of the Accreted Principal Amount of debentures being
redeemed plus accrued and unpaid Interest to, but excluding, the Redemption
Date; provided that if the applicable Redemption Date is an Interest Payment
Date, the Interest payable on such Interest Payment Date shall be paid on such
Interest Payment Date to the holders of record of such Debentures on the
applicable record date instead of the holders surrendering such Debentures for
redemption on such date.
In no event will any Security be redeemable at the option of the
Company before June 20, 2011.
The Company may not give notice of any redemption of the Debentures if
a default in the payment of Interest on the Debentures has occurred and is
continuing.
The Debentures are not subject to redemption through the operation of
any sinking fund.
If a Fundamental Change occurs at any time prior to maturity of the
Debentures, this Debenture will be redeemable on a Fundamental Change Repurchase
Date, specified by the Company, which shall be no later than 30 days after
notice thereof, at the option of the holder of this Debenture at a Fundamental
Change Repurchase Price equal to 100% of the Accreted Principal Amount thereof,
together with accrued Interest to (but excluding) the Fundamental Change
Repurchase Date; provided that if the applicable Fundamental Change Repurchase
Date is an Interest Payment Date, the Interest payable on such Interest Payment
Date shall be paid on such Interest Payment Date to the holders of record of
such Debentures on the applicable record date instead of the holders
surrendering such Debentures for repurchase on such date. The Company shall mail
to all holders of record of the Debentures a notice of the occurrence of a
Fundamental Change and of the repurchase right arising as a result thereof on or
before the 30th day after the occurrence of such Fundamental Change. For a
Debenture to be so repurchased at the option of the holder, the Company must
receive at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, such Debenture with the form
entitled "FORM OF FUNDAMENTAL CHANGE REPURCHASE ELECTION" on the reverse thereof
duly completed, together with such Debenture, duly endorsed for transfer at any
A-9
time prior to the close of business on the Business Day immediately preceding
the Fundamental Change Repurchase Date.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase, at the option of the holder, all or any portion
of the Debentures held by such holder on June 15, 2011, June 15, 2014, June 15,
2019, June 15, 2024 and June 15, 2029 in integral multiples of $1,000 Original
Principal Amount at a Company Repurchase Price of 100% of the Accreted Principal
Amount, plus any accrued and unpaid Interest on such Debenture to but excluding
the Company Repurchase Date; provided that if the applicable Company Repurchase
Date is an Interest Payment Date, the Interest payable on such Interest Payment
Date shall be paid on such Interest Payment Date to the holders of record of
such Debentures on the applicable record date instead of the holders
surrendering such Debentures for repurchase on such date. To exercise such
right, a holder shall deliver to the Company such Debenture with the form
entitled "FORM OF COMPANY REPURCHASE ELECTION" on the reverse thereof duly
completed, together with the Debenture, duly endorsed for transfer, at any time
from the opening of business on the date that is 20 Business Days prior to such
Company Repurchase Date until the close of business on the Business Day
immediately preceding the Company Repurchase Date, and shall deliver the
Debentures to the Trustee (or other Paying Agent appointed by the Company) as
set forth in the Indenture.
The Company Repurchase Price to be paid on any of June 15, 2011, June
15, 2014, June 15, 2019, June 15, 2024 and June 15, 2029 and the Fundamental
Change Repurchase Price to be paid on any Fundamental Change Repurchase Date
shall be paid in cash, subject to the terms and conditions of the Indenture.
Holders have the right to withdraw any Repurchase Election by
delivering to the Trustee (or other Paying Agent appointed by the Company) a
written notice of withdrawal up to the close of business on the Business Day
immediately preceding the Repurchase Date, all as provided in the Indenture.
If money sufficient to pay the Repurchase Price with respect to all
Debentures or portions thereof to be repurchased as of any Repurchase Date is
deposited with the Trustee (or other Paying Agent appointed by the Company),
then on and after such Repurchase Date, Interest will cease to accrue and the
principal amount will cease to accrete on such Debentures (or portions thereof),
and the holder thereof shall have no other rights as such other than the right
to receive the Repurchase Price upon surrender of such Debenture.
Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the Stated Maturity of the Debentures, the
holder hereof has the right, at its option, to convert its Debentures into
shares of the Company's Common Stock at an initial Conversion Rate of 18.7434
shares of
A-10
Common Stock per $1,000 Original Principal Amount of the Debentures (an initial
Conversion Price of approximately $53.35 per share), subject to the Company's
right to deliver, in lieu of Common Stock, cash or a combination of cash and
Common Stock, as such shares shall be constituted at the date of conversion and
subject to adjustment from time to time as provided in the Indenture, upon
surrender of this Debenture with the form entitled "FORM OF CONVERSION NOTICE"
on the reverse hereof duly completed, to the Company at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such holder, the Corporate Trust Office, and,
unless the shares issuable on conversion are to be issued in the same name as
this Debenture, duly endorsed by, or accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. The Company will notify the holder thereof of any event
triggering the right to convert the Debentures as specified above in accordance
with the Indenture.
If the Company (i) is a party to a consolidation, merger, statutory
share exchange or combination, (ii) reclassifies the Common Stock, or (iii)
sells or conveys its properties and assets substantially as an entirety to any
Person, the right to convert a Security into shares of Common Stock may be
changed into a right to convert it into the kind or amount of cash, securities
or other property receivable upon such event, in each case in accordance with
the Indenture.
In addition, following certain corporate transactions as set forth in
Section 15.01(b) of the Indenture that occur prior to June 15, 2011 and that
also constitute a Fundamental Change, a Debentureholder who elects to convert
its Debentures in connection with such corporate transaction will be entitled to
receive Additional Shares of Common Stock upon conversion in certain
circumstances, subject to the Company's payment elections set forth in the
Indenture.
No adjustment in respect of Interest on any Debenture converted (other
than the payment of Additional Amounts, if any) or dividends on any shares
issued upon conversion of such Debenture will be made upon any conversion except
as set forth in the next sentence. If this Debenture (or portion hereof) is
surrendered for conversion during the period from the close of business on any
record date for the payment of Interest to the opening of business on the
immediately following Interest Payment Date, this Debenture (or portion hereof
being converted) must be accompanied by payment, in immediately available funds
or other funds acceptable to the Company, of an amount equal to the Interest
otherwise payable on such Interest Payment Date on the Original Principal Amount
being converted; provided that no such payment shall be required (1) if the
Company has specified a Redemption Date that is after a record date and on or
prior to the Business Day immediately following the next Interest Payment Date,
(2) if the Company has specified a Repurchase Date following a Fundamental
Change that is after a record date and prior to the next Interest
A-11
Payment Date or (3) to the extent of any overdue Interest, if any overdue
Interest exists at the time of conversion with respect to such Debenture.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture or Debentures for conversion.
A Debenture in respect of which a holder is exercising its right to
require repurchase upon a Fundamental Change or repurchase on a Repurchase Date
may be converted only if such holder withdraws its election to exercise such
right in accordance with the terms of the Indenture.
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate Original Principal Amount will be issued to
the transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any Paying Agent,
any Conversion Agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any Paying Agent nor
other Conversion Agent nor any Debenture Registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the Accreted Principal Amount of or
Interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any supplemental indenture or in
any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, shareholder, employee, agent,
officer or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by acceptance
A-12
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
The Company agrees, and by acceptance of a Debenture, each beneficial
holder of a Debenture will be deemed to have agreed to treat the Debentures as
indebtedness of the Company for U.S. federal income tax purposes that are
subject to the regulations governing contingent payment debt instruments and to
be bound (in the absence of an administrative determination or judicial ruling
to the contrary) by the Company's determination of the comparable yield and
projected payment schedule within the meaning of the regulations governing
contingent payment debt instruments. A holder of Debentures may obtain the issue
price, the amount of original issue discount, issue date, yield to maturity,
comparable yield and projected payment schedule for the Debentures, determined
by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by submitting a written
request for it to the Company at the following address: Kellwood Company, 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Attention: Treasurer.
Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.
A-13
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants in common ____________________________
(State)
Additional abbreviations may also be used though not in the above list.
A-14
FORM OF
CONVERSION NOTICE
TO: KELLWOOD COMPANY
UNION BANK OF CALIFORNIA, N.A.
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
$1,000 Original Principal Amount or a multiple thereof) below designated, into
shares of Common Stock of Kellwood Company in accordance with the terms of the
Indenture referred to in this Debenture, subject to the Company's payment
elections, and directs that the shares issuable and deliverable payable upon
such conversion, together with any check in payment for fractional shares and
any Debentures representing any unconverted Original Principal Amount hereof, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below. Capitalized terms used herein but not defined shall have
the meanings ascribed to such terms in the Indenture. If shares, any portion of
this Debenture not converted or a check for cash payable are to be issued in the
name of a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
Interest accompanies this Debenture.
Dated: ________________________________
____________________________________
____________________________________
Signature(s)
A-15
Signature(s) must be guaranteed by
an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the
Debenture Registrar, which
requirements include membership or
participation in the Security
Transfer Agent Medallion Program
("STAMP") or such other "SIGNATURE
GUARANTEE PROGRAM" as may be
determined by the Debenture
Registrar in addition to, or in
substitution for, STAMP, all in
accordance with the Securities
Exchange Act of 1934, as amended.
______________________________
Signature Guarantee
Fill in the registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
_______________________________________
(Name)
_______________________________________
(Xxxxxx Xxxxxxx)
_______________________________________
(City, State and Zip Code)
_______________________________________
Please print name and address
Original Principal Amount to be converted
(if less than all):
$______________________________________
Social Security or Other Taxpayer
Identification Number:
_______________________________________
X-00
XXXX XX
XXXXXXXXXXX XXXXXX XXXXXXXXXX ELECTION
TO: KELLWOOD COMPANY
UNION BANK OF CALIFORNIA, N.A.
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Kellwood Company (the "COMPANY") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repurchase the entire Original Principal Amount of this
Debenture, or the portion thereof (which is $1,000 Original Principal Amount or
a multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Debenture at the price of 100% of the entire
Accreted Principal Amount or portion thereof, together with accrued Interest to,
but excluding, the Fundamental Change Repurchase Date, to the registered holder
hereof. Capitalized terms used herein but not defined shall have the meanings
ascribed to such terms in the Indenture.
Dated: ________________________________
____________________________________
____________________________________
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Original Principal Amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
A-17
FORM OF
COMPANY REPURCHASE ELECTION
TO: KELLWOOD COMPANY
UNION BANK OF CALIFORNIA, N.A.
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Kellwood Company (the "COMPANY") regarding
the right of holders to elect to require the Company to repurchase the
Debentures and requests and instructs the Company to repay the entire Original
Principal Amount of this Debenture, or the portion thereof (which is $1,000
Original Principal Amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture at a price of 100% of the entire
Accreted Principal Amount or portion thereof, together with accrued Interest to,
but excluding, the Company Repurchase Date, to the registered holder hereof.
Capitalized terms used herein but not defined shall have the meanings ascribed
to such terms in the Indenture. The Debentures shall be repurchased by the
Company as of the Company Repurchase Date pursuant to the terms and conditions
specified in the Indenture.
Dated: ________________________________
____________________________________
____________________________________
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Debenture in every particular without
alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Original Principal Amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
A-18
ASSIGNMENT
For value received ___________________________ hereby sell(s) assign(s)
and transfer(s) unto ____________________________ (Please insert social security
or other Taxpayer Identification Number of assignee) the within Debenture, and
hereby irrevocably constitutes and appoints ___________________________________
attorney to transfer said Debenture on the books of the Company, with full power
of substitution in the premises.
In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), the undersigned confirms
that such Debenture is being transferred:
[ ] To Kellwood Company or a subsidiary thereof; or
[ ] To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule
144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement which has been declared
effective under the Securities Act of 1933, as amended, and
which continues to be effective at the time of transfer;
and unless the Debenture has been transferred to Kellwood Company or a
subsidiary thereof, the undersigned confirms that such Debenture is not being
transferred to an "AFFILIATE" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.
Dated: ________________________________
____________________________________
____________________________________
Signature(s)
A-19
Signature(s) must be guaranteed by
an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the
Debenture Registrar, which
requirements include membership or
participation in the Security
Transfer Agent Medallion Program
("STAMP") or such other "SIGNATURE
GUARANTEE PROGRAM" as may be
determined by the Debenture
Registrar in addition to, or in
substitution for, STAMP, al in
accordance with the Securities
Exchange Act of 1934, as amended.
______________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Fundamental Change
Repurchase Election, the Company Repurchase Election or the Assignment must
correspond with the name as written upon the face of the Debenture in every
particular without alteration or enlargement or any change whatever.
A-20
Schedule I
[Include Schedule I only for a Global Debenture]
KELLWOOD COMPANY
3.50% Convertible Senior Debenture due 2034
No. _______
Authorized Signature
Notation Explaining Original of Trustee or
Date Original Principal Amount Principal Amount Recorded Custodian
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
A-21
