XXXXXXXXXX INDUSTRIES, INC.
AND
U.S. TRUST COMPANY, NATIONAL ASSOCIATION
AS TRUSTEE
$15,000,000
_____% Convertible Subordinated Notes due 2008*
------------------
INDENTURE
Dated as of December __, 1998
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*Plus an over-allotment option to purchase up to $2,250,000 principal amount of
____% Convertible Subordinated Notes due 2008.
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.8, 7.10, 10.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6, 10.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.1, 10.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.5, 10.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.4
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.7
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.8
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.4
N.A. means not applicable.
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*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Other Definitions. . . . . . . . . . . . . . . . . . 8
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. . 9
SECTION 1.4 Rules of Construction. . . . . . . . . . . . . . . . 9
ARTICLE 2 THE CONVERTIBLE SUBORDINATED NOTES . . . . . . . . . . . . . . 10
SECTION 2.1 Form and Dating. . . . . . . . . . . . . . . . . . . 10
SECTION 2.2 Execution and Authentication . . . . . . . . . . . . 10
SECTION 2.3 Registrar, Paying Agent and Conversion Agent . . . . 11
SECTION 2.4 Paying Agent To Hold Money in Trust. . . . . . . . . 12
SECTION 2.5 Holder Lists . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.6 Transfer and Exchange. . . . . . . . . . . . . . . . 12
SECTION 2.7 Replacement Convertible Subordinated Notes . . . . . 14
SECTION 2.8 Outstanding Convertible Subordinated Notes . . . . . 15
SECTION 2.9 When Treasury Convertible Subordinated Notes
Disregarded. . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.10 Temporary Convertible Subordinated Notes . . . . . . 16
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . 17
SECTION 2.13 CUSIP Number . . . . . . . . . . . . . . . . . . . . 17
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ARTICLE 3 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.1 Optional Redemption. . . . . . . . . . . . . . . . . 17
SECTION 3.2 Notices to Trustee . . . . . . . . . . . . . . . . . 18
SECTION 3.3 Selection of Convertible Subordinated Notes To Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.4 Notice of Redemption . . . . . . . . . . . . . . . . 19
SECTION 3.5 Effect of Notice of Redemption . . . . . . . . . . . 20
SECTION 3.6 Deposit of Redemption Price. . . . . . . . . . . . . 20
SECTION 3.7 Convertible Subordinated Notes Redeemed in Part. . . 21
SECTION 3.8 Conversion Arrangement on Call for Redemption. . . . 21
ARTICLE 4 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 4.1 Payment of Convertible Subordinated Notes. . . . . . 22
SECTION 4.2 Commission Reports . . . . . . . . . . . . . . . . . 23
SECTION 4.3 Compliance Certificate . . . . . . . . . . . . . . . 23
SECTION 4.4 Maintenance of Office or Agency. . . . . . . . . . . 23
SECTION 4.5 Continued Existence. . . . . . . . . . . . . . . . . 24
SECTION 4.6 Repurchase Upon Designated Event . . . . . . . . . . 24
SECTION 4.7 Appointments to Fill Vacancies in Trustee's Office . 27
SECTION 4.8 Stay, Extension and Usury Laws . . . . . . . . . . . 27
SECTION 4.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 27
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ARTICLE 5 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.1 When the Company May Merge, Etc. . . . . . . . . . . 27
SECTION 5.2 Successor Substituted. . . . . . . . . . . . . . . . 29
SECTION 5.3 Purchase Option on Change of Control . . . . . . . . 29
ARTICLE 6 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . 29
SECTION 6.1 Events of Default. . . . . . . . . . . . . . . . . . 29
SECTION 6.2 Acceleration . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.3 Other Remedies . . . . . . . . . . . . . . . . . . . 32
SECTION 6.4 Waiver of Past Defaults. . . . . . . . . . . . . . . 32
SECTION 6.5 Control by Majority. . . . . . . . . . . . . . . . . 33
SECTION 6.6 Limitation on Suits. . . . . . . . . . . . . . . . . 33
SECTION 6.7 Rights of Holders To Receive Payment . . . . . . . . 34
SECTION 6.8 Collection Suit by Trustee . . . . . . . . . . . . . 34
SECTION 6.9 Trustee May File Proofs of Claim . . . . . . . . . . 34
SECTION 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.11 Undertaking for Costs. . . . . . . . . . . . . . . . 35
ARTICLE 7 THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.1 Duties of the Trustee. . . . . . . . . . . . . . . . 35
SECTION 7.2 Rights of the Trustee. . . . . . . . . . . . . . . . 37
SECTION 7.3 Individual Rights of the Trustee . . . . . . . . . . 38
SECTION 7.4 Trustee's Disclaimer . . . . . . . . . . . . . . . . 39
SECTION 7.5 Notice of Defaults . . . . . . . . . . . . . . . . . 39
SECTION 7.6 Reports by the Trustee to Holders. . . . . . . . . . 39
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SECTION 7.7 Compensation and Indemnity . . . . . . . . . . . . . 40
SECTION 7.8 Replacement of the Trustee . . . . . . . . . . . . . 41
SECTION 7.9 Successor Trustee by Xxxxxx, etc.. . . . . . . . . . 42
SECTION 7.10 Eligibility, Disqualification. . . . . . . . . . . . 42
SECTION 7.11 Preferential Collection of Claims Against Company. . 42
ARTICLE 8 SATISFACTION AND DISCHARGE OF INDENTURE. . . . . . . . . . . . 43
SECTION 8.1 Discharge of Indenture . . . . . . . . . . . . . . . 43
SECTION 8.2 Deposited Monies to be Held in Trust by Trustee. . . 44
SECTION 8.3 Paying Agent to Repay Monies Held. . . . . . . . . . 44
SECTION 8.4 Return of Unclaimed Monies . . . . . . . . . . . . . 44
SECTION 8.5 Reinstatement. . . . . . . . . . . . . . . . . . . . 44
ARTICLE 9 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 9.1 Without the Consent of Holders . . . . . . . . . . . 45
SECTION 9.2 With the Consent of Holders. . . . . . . . . . . . . 46
SECTION 9.3 Compliance with the Trust Indenture Act. . . . . . . 47
SECTION 9.4 Revocation and Effect of Consents. . . . . . . . . . 47
SECTION 9.5 Notation on or Exchange of Convertible Subordinated
Notes. . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.6 Trustee Protected. . . . . . . . . . . . . . . . . . 48
ARTICLE 10 GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 49
SECTION 10.1 Trust Indenture Act Controls . . . . . . . . . . . . 49
-iv-
SECTION 10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.3 Communication by Holders With Other Holders. . . . . 50
SECTION 10.4 Certificate and Opinion as to Conditions Precedent . 50
SECTION 10.5 Statements Required in Certificate or Opinion. . . . 50
SECTION 10.6 Rules by Trustee and Agents. . . . . . . . . . . . . 51
SECTION 10.7 Legal Holidays . . . . . . . . . . . . . . . . . . . 51
SECTION 10.8 No Recourse Against Others . . . . . . . . . . . . . 52
SECTION 10.9 Counterparts . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.10 Other Provisions . . . . . . . . . . . . . . . . . . 52
SECTION 10.11 Governing Law. . . . . . . . . . . . . . . . . . . . 53
SECTION 10.12 No Adverse Interpretation of Other Agreements. . . . 53
SECTION 10.13 Successors . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.14 Severability . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.15 Table of Contents, Headings, Etc . . . . . . . . . . 53
ARTICLE 11 SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.1 Agreement to Subordinate . . . . . . . . . . . . . . 54
SECTION 11.2 Liquidation; Dissolution; Bankruptcy . . . . . . . . 54
SECTION 11.3 Default on Senior Debt and/or Designated Senior
Debt . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.4 Acceleration of Convertible Subordinated Notes . . . 56
SECTION 11.5 When Distribution Must Be Paid Over. . . . . . . . . 56
SECTION 11.6 Notice by Company. . . . . . . . . . . . . . . . . . 57
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SECTION 11.7 Subrogation. . . . . . . . . . . . . . . . . . . . . 57
SECTION 11.8 Relative Rights. . . . . . . . . . . . . . . . . . . 57
SECTION 11.9 Subordination May Not Be Impaired by Company . . . . 58
SECTION 11.10 Distribution or Notice to Representative . . . . . . 58
SECTION 11.11 Rights of Trustee and Paying Agent . . . . . . . . . 58
SECTION 11.12 Authorization to Effect Subordination. . . . . . . . 59
SECTION 11.13 Article Applicable to Paying Agents. . . . . . . . . 59
SECTION 11.14 Senior Debt Entitled to Rely . . . . . . . . . . . . 59
ARTICLE 12 CONVERSION OF CONVERTIBLE SUBORDINATED NOTES. . . . . . . 60
SECTION 12.1 Right to Convert . . . . . . . . . . . . . . . . . . 60
SECTION 12.2 Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or
Dividends. . . . . . . . . . . . . . . . . . . . . . 60
SECTION 12.3 Cash Payments in Lieu of Fractional Shares . . . . . 62
SECTION 12.4 Conversion Price . . . . . . . . . . . . . . . . . . 63
SECTION 12.5 Adjustment of Conversion Price . . . . . . . . . . . 63
SECTION 12.6 Effect of Reclassification, Consolidation, Merger or
Sale . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.7 Taxes on Shares Issued . . . . . . . . . . . . . . . 76
SECTION 12.8 Reservation of Shares; Shares to Be Fully Paid; Listing
of Common Stock. . . . . . . . . . . . . . . . . . . 77
SECTION 12.9 Responsibility of Trustee. . . . . . . . . . . . . . 77
-vi-
SECTION 12.10 Notice to Holders Prior to Certain Actions . . . . . 78
-vii-
THIS INDENTURE, dated as of December __, 1998, is between Xxxxxxxxxx
Industries, Inc., an Oregon corporation (the "Company"), and U.S. Trust
Company, National Association, a national banking association duly organized
and existing under federal laws of the United States (the "Trustee"). The
Company has duly authorized the creation of its ___% Convertible Subordinated
Notes due 2008 (the "Convertible Subordinated Notes") and to provide therefor
the Company and the Trustee have duly authorized the execution and delivery
of this Indenture. Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the holders from time to time
of the Convertible Subordinated Notes:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS.
"Acquiring Person" means any person (as defined in Section 13(d)(3) of
the Exchange Act) who or which, together with all affiliates and associates
(each as defined in Rule 12b-2 under the Exchange Act), becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act
and as further defined below) of shares of Common Stock or other voting
securities of the Company having more than 50% of the total voting power of
the Voting Stock of the Company; PROVIDED, HOWEVER, that an Acquiring Person
shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii)
any Permitted Holder, (iv) an underwriter engaged in a firm commitment
underwriting in connection with a public offering of the Voting Stock of the
Company or (v) any current or future employee or director benefit plan of the
Company or any Subsidiary of the Company or any entity holding Common Stock
of the Company for or pursuant to the terms of any such plan. For purposes
hereof, a person shall not be deemed to be the beneficial owner of (A) any
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such person or any of such person's affiliates until such tendered
securities are accepted for purchase or exchange thereunder, or (B) any
securities if such beneficial ownership (1) arises solely as a result of a
revocable proxy delivered in response to a proxy or consent solicitation made
pursuant to the applicable rules and regulations under the Exchange Act, and
(2) is not also then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act.
"Affiliate" means, when used with reference to any person, any other
person directly or indirectly controlling, controlled by, or under direct or
indirect common control of, the referent 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 management or policies of the referent
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise. The terms "controlling" and
"controlled" have meanings correlative of the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Note or beneficial interest therein, the rules
and procedures of the Depositary for such Global Note to the extent
applicable to such transaction and as in effect from time to time.
"Board of Directors" means the Board of Directors of the Company or
any authorized committee of the Board of Directors.
"Capital Stock" of any person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) equity of such person, but excluding any
debt securities convertible into such equity.
"Change of Control" means the occurrence of one or more of the
following events: (a) any person has become an Acquiring Person, (b) the
Company consolidates with or merges into any other corporation, or conveys,
transfers or leases all or substantially all of its assets to any person, or
any other corporation merges into the Company, and, in the case of any such
transaction, the outstanding Common Stock of the Company is changed or
exchanged as a result, unless the shareholders of the Company immediately
before such transaction own, directly or indirectly immediately following
such transaction, at least a majority of the combined voting power of the
outstanding voting securities of the person resulting from such transaction
in substantially the same proportion as their ownership of the Voting Stock
of the Company immediately before such transaction, or (c) any time the
Continuing Directors do not constitute a majority of the Board of Directors
of the Company (or, if applicable, a successor person to the Company).
"Commission" means the Securities and Exchange Commission.
"Common Stock" means any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and
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which is not subject to redemption by the Company. Subject to the provisions
of Section 12.6, however, shares issuable on conversion of Convertible
Subordinated Notes shall include only shares of the class designated as
Common Stock of the Company at the date of this Indenture or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which are not subject to redemption by the
Company; PROVIDED that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
"Company" means the party named as such above until a successor
replaces it in accordance with Article 5 and thereafter means the successor.
A "consolidated subsidiary" of any person means a subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such person as a consolidated subsidiary.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Convertible Subordinated Notes" means the ____% Convertible
Subordinated Notes due 2008 issued, authenticated and delivered under this
Indenture.
"Conversion Price" means the initial conversion price specified in the
form of Convertible Subordinated Note in Paragraph 16 of such form, as
adjusted in accordance with the provisions of Article 12.
"Corporate Trust Office" means the corporate trust office of the
Trustee at which at any particular time the trust created by this Indenture
shall principally be administered; as of the date hereof, the Corporate Trust
Office is located at Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX
00000.
"Default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
-3-
"Depositary" means, with respect to any Global Notes, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Global Notes (or any successor
securities clearing agency so registered), which shall initially be DTC.
"Designated Event" means the occurrence of a Change of Control or a
Termination of Trading.
"Designated Senior Debt" means any particular Senior Debt if the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Indebtedness shall be "Designated Senior Debt"
for purposes of this Indenture (PROVIDED that such instrument, agreement or
other document may place limitations and conditions on the right of such
Senior Debt to exercise the rights of Designated Senior Debt.)
"DTC" means The Depository Trust Company, a New York corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States, which are in effect from
time to time.
"Global Note" means a Convertible Subordinated Note that is registered
in the Register.
"Indebtedness" means, with respect to any person, all obligations,
whether or not contingent, of such person (i) (a) for borrowed money
(including, but not limited to, any indebtedness secured by a security
interest, mortgage or other lien on the assets of the Company that is (1)
given to secure all or part of the purchase price of property subject
thereto, whether given to the vendor of such property or to another, or (2)
existing on property at the time of acquisition thereof), (b) evidenced by a
note, debenture, bond or other written instrument, (c) under a lease required
to be capitalized on the balance sheet of the lessee under GAAP or under any
lease or related document (including a purchase agreement) that provides that
the Company is contractually obligated to purchase or cause a third party to
purchase and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of the Company under such lease
-4-
or related document to purchase or to cause a third party to purchase such
leased property, (d) in respect of letters of credit, bank guarantees or
bankers' acceptances (including reimbursement obligations with respect to any
of the foregoing), (e) with respect to Indebtedness secured by a mortgage,
pledge, lien, encumbrance, charge or adverse claim affecting title or
resulting in an encumbrance to which the property or assets of such person
are subject, whether or not the obligation secured thereby shall have been
assumed by or shall otherwise be such person's legal liability, (f) in
respect of the balance of deferred and unpaid purchase price of any property
or assets, (g) under interest rate or currency swap agreements, cap, floor
and collar agreements, spot and forward contracts and similar agreements and
arrangements; (ii) with respect to any obligation of others of the type
described in the preceding clause (i) or under clause (iii) below assumed by
or guaranteed in any manner by such person through an agreement to purchase
(including, without limitation, "take or pay" and similar arrangements),
contingent or otherwise (and the obligations of such person under any such
assumptions, guarantees or other such arrangements); and (iii) any and all
deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any of the foregoing.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Payment Date" means January 15 and July 15 of each year,
beginning July 15, 1999.
"Issue Date" means the date on which Convertible Subordinated Notes
are first issued and authenticated under this Indenture.
"Material Subsidiary" means any subsidiary of the Company which at the
date of determination is a "significant subsidiary" as defined in Rule
1-02(w) of Regulation S-X under the Securities Act and the Exchange Act.
"Maturity Date" means December __, 2008.
"Note Custodian" means U.S. Trust Company, National Association, as
custodian with respect to any Global Note, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, collection expenses, legal fees,
late charges, and other liabilities payable under the documentation governing
any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, the Chief Accounting
Officer, any Executive Vice President,
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Senior Vice President or Vice President (whether or not designated by a
number or numbers or word or words before or after the title "Vice
President"), the Treasurer, any other executive officer, the Secretary and
any Assistant Treasurer or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the principal executive officer, principal financial
officer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who
may be an employee of or counsel to the Company or the Trustee except to the
extent otherwise indicated in this Indenture.
"Permitted Holders" means Xxxxxx X. Xxxxxxxxxx and his estates,
spouses, ancestors and lineal descendants (and spouses thereof), the legal
representatives of any of the foregoing, and the trustee of any bona fide
trust of which one or more of the foregoing are the sole beneficiaries or the
grantors, or any person of which any of the foregoing, individually or
collectively, beneficially own (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) voting securities representing at least a majority of the total
voting power of all classes of Capital Stock of such person (exclusive of any
matters as to which class voting rights exist).
A "person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization, limited liability
company or government or any agency or political subdivision thereof.
"redemption date" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the date fixed by the Company for
such redemption pursuant to Article 3 of this Indenture and the Convertible
Subordinated Notes.
"redemption price" when used with respect to any of the Convertible
Subordinated Notes to be redeemed, means the price fixed for such redemption
pursuant to Article 3 of this Indenture and the Convertible Subordinated
Notes.
"Regular Record Date" means the January 1 or July 1 immediately
preceding each Interest Payment Date.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Debt or (b) with respect to any Senior
Debt that does not have any such trustee, agent or other representative, (i)
in the case of such Senior Debt issued pursuant to an agreement providing for
voting arrangements as among the holders or owners of such Senior Debt, any
holder or owner of such Senior Debt acting
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with the consent of the required persons necessary to bind such holders or
owners of such Senior Debt and (ii) in the case of all other such Senior
Debt, the holder or owner of such Senior Debt.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Debt" means the principal of, premium, if any, and interest
on, rent under, and any other amounts payable on or in respect of any
Indebtedness of the Company (including, without limitation, any Obligations
in respect of such Indebtedness and, in the case of Designated Senior Debt,
any interest accruing after the filing of a petition by or against the
Company under any bankruptcy law, whether or not allowed as a claim after
such filing in any proceeding under such bankruptcy law), whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to the foregoing); PROVIDED, HOWEVER, that Senior Debt does not
include (v) Indebtedness evidenced by the Convertible Subordinated Notes, (w)
any liability for federal, state, local or other taxes owed or owing by the
Company, (x) Indebtedness of the Company to any Subsidiary of the Company
except to the extent such Indebtedness is of a type described in clause (ii)
of the definition of Indebtedness, (y) trade payables of the Company for
goods, services or materials purchased in the ordinary course of business
(other than, to the extent they may otherwise constitute trade payables, any
obligations of the type described in clause (ii) of the definition of
Indebtedness), and (z) any particular Indebtedness in which the instrument
creating or evidencing the same expressly provides that such Indebtedness
shall not be senior in right of payment to, or is pari passu with, or is
subordinated or junior to, the Convertible Subordinated Notes.
A "Subsidiary" means, with respect to any person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of equity capital 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).
"Termination of Trading" will be deemed to have occurred if the Common
Stock (or other common stock into which the
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Convertible Subordinated Notes are then convertible) is neither listed for
trading on a United States national securities exchange nor approved for
trading on an established automated over-the-counter trading market in the
United States; PROVIDED, HOWEVER, that a "Termination of Trading" shall not
be deemed to occur on account of an involuntary de-listing of such securities
by any such exchange or over-the-counter trading market if (A) within 45 days
following such involuntary de-listing, such securities are again listed or
approved for trading on any such exchange or over-the-counter market or (B)
such securities are not eligible for listing or trading on any such exchange
or over-the-counter market.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of execution of this Indenture, except
as provided in Sections 9.3 and 12.6.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture
and thereafter xxxxx the successor.
"Trust Officer" means an officer in the Corporate Trust Office of the
Trustee.
"U.S. Government Obligations" means direct obligation of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged. In order to have money available on a
payment date to pay principal or interest on the Convertible Subordinated
Notes, the U.S. Government Obligations shall be payable as to principal or
interest on or before such payment date in such amounts as will provide the
necessary money. U.S. Government Obligations shall not be callable at the
issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the
election of directors.
SECTION 1.2 OTHER DEFINITIONS.
DEFINED IN
SECTION
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"business day" . . . . . . . . . . . . . . . . . . . . . . . . . . 10.7
"Current Market Price" . . . . . . . . . . . . . . . . . . . . . . 12.5
"closing price". . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"Conversion Agent" . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Custodian". . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Designated Event Date" . . . . . . . . . . . . . . . . . . . . . 4.6
"Designated Event Offer" . . . . . . . . . . . . . . . . . . . . . 4.6
"Designated Event Offer Termination Date" . . . . . . . . . . . . 4.6
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"Designated Event Payment" . . . . . . . . . . . . . . . . . . . . 4.6
"Designated Event Payment Date" . . . . . . . . . . . . . . . . . 4.6
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Expiration Time" . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"fair market value" . . . . . . . . . . . . . . . . . . . . . . . 12.5
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . 10.7
"New Rights Plan". . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"non-electing share" . . . . . . . . . . . . . . . . . . . . . . . 12.6
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Payment Blockage Notice" . . . . . . . . . . . . . . . . . . . . 10.4
"Purchased Shares" . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"Record Date". . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"Register" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"trading day" . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
"Trigger Event" . . . . . . . . . . . . . . . . . . . . . . . . . 12.5
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Commission;
"indenture securities" means the Convertible Subordinated Notes;
"indenture security holder" means a holder of a Convertible
Subordinated Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the Convertible Subordinated Notes means the Company
or any other obligor on the Convertible Subordinated Notes.
All other terms in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the
TIA have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) the male, female and neuter genders include one another.
ARTICLE 2
THE CONVERTIBLE SUBORDINATED NOTES
SECTION 2.1 FORM AND DATING.
The Convertible Subordinated Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form set forth
in EXHIBIT A hereto, which is part of this Indenture, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture. The Convertible Subordinated Notes may have
notations, legends or endorsements required by law, stock exchange rule or
the Depositary or usage. The Company shall approve the form of the
Convertible Subordinated Notes and any notation, legend or endorsement on
them. Each Convertible Subordinated Note shall be dated the date of its
authentication.
The terms and provisions contained in the Convertible Subordinated
Notes shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Convertible Subordinated Notes for the
Company by manual or facsimile signature. The Company's seal shall be
reproduced on the Convertible Subordinated Notes.
If an Officer whose signature is on a Convertible Subordinated Note no
longer holds that office at the time the Convertible Subordinated Note is
authenticated, the Convertible Subordinated Note shall nevertheless be valid.
A Convertible Subordinated Note shall not be valid until authenticated
by the manual signature of the Trustee. The
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signature shall be conclusive evidence that the Convertible Subordinated Note
has been authenticated under this Indenture.
Upon a written order of the Company signed by an Officer of the
Company, the Trustee shall authenticate Convertible Subordinated Notes for
original issue up to an aggregate principal amount of $15,000,000 (plus up to
$2,250,000 aggregate principal amount of Convertible Subordinated Notes that
may be sold by the Company pursuant to the over-allotment option granted
pursuant to the Underwriting Agreement, dated as of December __, 1998, among
the Company and Advest, Inc. and Black & Company, Inc.). The aggregate
principal amount of Convertible Subordinated Notes outstanding at any time
may not exceed that amount except as provided in Section 2.7.
The Convertible Subordinated Notes shall be issuable only in
registered form without coupons and only in denominations of $50 or any
integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Convertible Subordinated Notes. An authenticating
agent may authenticate Convertible Subordinated Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
right as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain or cause to be maintained in such locations
as it shall determine, which may be the Corporate Trust Office, an office or
agency: (i) where securities may be presented for registration of transfer
or for exchange ("Registrar"); (ii) where Convertible Subordinated Notes may
be presented for payment ("Paying Agent"); (iii) an office or agency where
Convertible Subordinated Notes may be presented for conversion (the
"Conversion Agent"); and (iv) where notices and demands to or upon the
Company in respect of Convertible Subordinated Notes and this Indenture may
be served by the holders of the Convertible Subordinated Notes. The
Registrar shall keep a Register ("Register") of the Convertible Subordinated
Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any
additional Conversion Agent. The Company may change any Paying Agent,
Registrar, Conversion Agent or co-registrar without prior notice. The Company
shall notify the Trustee of the name and address of any Agent not a party to
this Indenture and shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar not a party to this
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Indenture. The agreement shall implement the provisions of this Indenture
that relate to such Agent. The Company or any of its Subsidiaries may act as
Paying Agent, Registrar, Conversion Agent or co-registrar, except that for
purposes of Articles 3 and 8 and Section 4.6, neither the Company nor any of
its Subsidiaries shall act as Paying Agent. If the Company fails to appoint
or maintain another entity as Registrar, or Paying Agent or Conversion Agent,
the Trustee shall act as such, and the Trustee shall initially act as such.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent (other than the Trustee,
who hereby so agrees), to agree in writing that the Paying Agent will hold in
trust for the benefit of holders of the Convertible Subordinated Notes or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Convertible Subordinated Notes, and will notify the Trustee
of any default by the Company in respect of making any such payment. While
any such default continues, the Trustee may require a Paying Agent to pay all
money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over
to the Trustee, the Paying Agent (if other than the Company or a Subsidiary
of the Company) shall have no further liability for the money. If the
Company or a Subsidiary of the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the holders of
the Convertible Subordinated Notes all money held by it as Paying Agent.
SECTION 2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of holders of Convertible Subordinated Notes and shall otherwise comply with
TIA Section 312(a). If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least seven business days before each Interest
Payment Date, and as the Trustee may request in writing within fifteen (15)
days after receipt by the Company of any such request (or such lesser time as
the Trustee may reasonably request in order to enable it to timely provide
any notice to be provided by it hereunder), a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
holders of Convertible Subordinated Notes.
SECTION 2.6 TRANSFER AND EXCHANGE.
When Convertible Subordinated Notes are presented to the Registrar or
a co-registrar with a request to register a transfer or to exchange them for
an equal principal amount of Convertible Subordinated Notes for other
denominations, the Registrar shall register the transfer or make the exchange
if
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its requirements for such transactions (including appropriate endorsements
and evidence of transfer) are met. To permit registrations of transfers and
exchanges, the Company shall issue and the Trustee shall authenticate
Convertible Subordinated Notes at the Registrar's request, bearing
registration numbers not contemporaneously outstanding. No service charge
shall be made to a holder for any registration of transfer or exchange
(except as otherwise expressly permitted herein), but the Company may require
payment of a sum sufficient to cover any transfer tax or other governmental
charge payable upon exchanges pursuant to Sections 2.10, 3.7, 9.5 or 12.2.
The Company or the Registrar shall not be required (i) to issue,
register the transfer of or exchange Convertible Subordinated Notes during a
period beginning at the opening of business fifteen (15) days before the day
of any selection of Convertible Subordinated Notes for redemption under
Section 3.3 and ending at the close of business on the day of selection, (ii)
to register the transfer or exchange of any Convertible Subordinated Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Convertible Subordinated Note being redeemed in part or (iii) to register
the transfer of any Convertible Subordinated Notes surrendered for repurchase
pursuant to Section 4.6.
All Convertible Subordinated Notes issued upon any transfer or
exchange of Convertible Subordinated Notes in accordance with this Indenture
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture as the Convertible
Subordinated Notes surrendered upon such registration of transfer or exchange.
The provisions of Clauses (1), (2), (3), (4) and (5) below shall apply
only to Global Notes:
(1) Each Global Note authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Note or a
nominee thereof and delivered to such Depositary or a nominee thereof or Note
Custodian therefor, and each such Global Note shall constitute a single
Convertible Subordinated Note for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, in the
event that (i) the Depositary is unwilling, unable or ineligible to continue
as Depositary and a successor Depositary is not appointed by the Company
within 90 days, or (ii) if, at any time in the Company's sole discretion, the
Company determines not to have a Global Note, the Company will issue
Convertible Subordinated Notes in definitive form in exchange for the Global
Notes.
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(3) Subject to Clause (2) above, any exchange of a Global Note for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Note or any portion thereof shall be registered in
such names as the Depositary for such Global Note shall direct.
(4) Every Convertible Subordinated Note authenticated and delivered
upon registration of transfer of, or in exchange for or in lieu of, a Global
Note or any portion thereof, whether pursuant to this Article 2 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Note, unless such Convertible Subordinated Note is registered in the name of
a person other than the Depositary for such Global Note or a nominee thereof.
(5) The Depositary or its nominee, as registered owner of a Global
Note, shall be the Holder of such Global Note for all purposes under the
Indenture and the Convertible Subordinated Notes, and owners of beneficial
interests in a Global Note shall hold such interests pursuant to the
Applicable Procedures. Accordingly, any such owner's beneficial interest in
a Global Note will be shown only on, and the transfer of such interest shall
be effected only through, records maintained by the Depositary or its nominee
or its Agent Members and such owners of beneficial interests in a Global Note
will not be considered the owners or holders thereof.
SECTION 2.7 REPLACEMENT CONVERTIBLE SUBORDINATED NOTES.
If the holder of a Convertible Subordinated Note claims that the
Convertible Subordinated Note has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Convertible Subordinated Note if the Trustee's, the Company's and any
authenticating agent's requirements are met. If required by the Trustee or
the Company as a condition of receiving a replacement Convertible
Subordinated Note, the holder of a Convertible Subordinated Note must provide
a certificate of loss and an indemnity and/or an indemnity bond sufficient,
in the judgment of both the Company and the Trustee, to fully protect the
Company, the Trustee, any Agent and any authenticating agent from any loss,
liability, cost or expense which any of them may suffer or incur if the
Convertible Subordinated Note is replaced. The Company and the Trustee may
charge the relevant holder for their expenses in replacing any Convertible
Subordinated Note.
The Trustee or any authenticating agent may authenticate any such
substituted Convertible Subordinated Note, and deliver the same upon the
receipt of such security or indemnity as the Trustee, the Company and, if
applicable, such authenticating agent may require. Upon the issuance of any
substituted Convertible Subordinated Note, the Company may
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require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Convertible Subordinated Note
which has matured or is about to mature, or has been called for redemption
pursuant to Article 3, submitted for repurchase pursuant to Section 4.6 or is
about to be converted into Common Stock pursuant to Article 12, shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Convertible Subordinated Note, pay or authorize the
payment of or convert or authorize the conversion of the same (without
surrender thereof except in the case of a mutilated Convertible Subordinated
Note), as the case may be, if the applicant for such payment or conversion
shall furnish to the Company, to the Trustee and, if applicable, to the
authenticating agent such security or indemnity as may be required by them to
save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or
theft, evidence satisfactory to the Company, the Trustee and, if applicable,
any paying agent or conversion agent of the destruction, loss or theft of
such Convertible Subordinated Note and of the ownership thereof.
Every replacement Convertible Subordinated Note is an additional
obligation of the Company and shall be entitled to all the benefits provided
under this Indenture equally and proportionately with all other Convertible
Subordinated Notes duly issued, authenticated and delivered hereunder.
SECTION 2.8 OUTSTANDING CONVERTIBLE SUBORDINATED NOTES.
The Convertible Subordinated Notes outstanding at any time are all the
Convertible Subordinated Notes properly authenticated by the Trustee except
for those canceled by the Trustee, those delivered to it for cancellation,
and those described in this Section as not outstanding.
If a Convertible Subordinated Note is replaced pursuant to Section
2.7, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Convertible Subordinated Note is held by
a bona fide purchaser.
If Convertible Subordinated Notes are considered paid under Section
4.1 or converted under Article 12, they cease to be outstanding and interest
on them ceases to accrue.
Subject to Section 2.9 hereof, a Convertible Subordinated Note does
not cease to be outstanding because the Company or an Affiliate of the
Company holds the Convertible Subordinated Note.
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SECTION 2.9 WHEN TREASURY CONVERTIBLE SUBORDINATED NOTES DISREGARDED.
In determining whether the holders of the required principal amount of
Convertible Subordinated Notes have concurred in any direction, waiver or
consent, Convertible Subordinated Notes owned by the Company or an Affiliate of
the Company shall be considered as though they are not outstanding except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Convertible Subordinated
Notes which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10 TEMPORARY CONVERTIBLE SUBORDINATED NOTES.
Until definitive Convertible Subordinated Notes are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Convertible
Subordinated Notes. Temporary Convertible Subordinated Notes shall be
substantially in the form of definitive Convertible Subordinated Notes but may
have variations that the Company considers appropriate for temporary Convertible
Subordinated Notes. If temporary Convertible Subordinated Notes are issued, the
Company will cause definitive Convertible Subordinated Notes to be prepared
without unreasonable delay. After the preparation of definitive Convertible
Subordinated Notes, the temporary Convertible Subordinated Notes shall be
exchangeable for definitive Convertible Subordinated Notes upon surrender of the
temporary Convertible Subordinated Notes at any office or agency of the Company
designated pursuant to Section 2.3 without charge to the holder of the
Convertible Subordinated Note, except as specified in Section 2.6. Upon
surrender for cancellation of any one or more temporary Convertible Subordinated
Notes the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Convertible
Subordinated Notes of authorized denominations. Until so exchanged, the
temporary Convertible Subordinated Notes shall in all respects be entitled to
the same benefits under this Indenture as definitive Convertible Subordinated
Notes.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Convertible Subordinated Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Convertible Subordinated Notes surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else may cancel
Convertible Subordinated Notes surrendered for registration of transfer,
exchange, payment, replacement, conversion, redemption, repurchase or
cancellation. Upon written instructions of the Company, the Trustee shall
destroy and dispose of canceled Convertible Subordinated Notes as the Company
directs and, after such
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destruction, shall deliver a certificate of destruction to the Company. The
Company may not issue new Convertible Subordinated Notes to replace
Convertible Subordinated Notes that it has paid, redeemed or repurchased or
that have been delivered to the Trustee for cancellation or that any holder
has (i) converted pursuant to Article 12 hereof, (ii) submitted for
redemption pursuant to Article 3 hereof or (iii) submitted for repurchase
pursuant to Section 4.6 hereof (unless revoked).
SECTION 2.12 DEFAULTED INTEREST.
If the Company fails to make a payment of interest on the Convertible
Subordinated Notes, it shall pay such defaulted interest plus, to the extent
lawful, any interest payable on the defaulted interest. It may pay such
defaulted interest, plus any such interest payable on it, to the persons who are
holders of Convertible Subordinated Notes on a subsequent special record date.
The Company shall fix any such record date and payment date. At least 15 days
before any such record date, the Company shall mail to holders of the
Convertible Subordinated Notes a notice that states the record date, payment
date and amount of such interest to be paid.
SECTION 2.13 CUSIP NUMBER.
The Company in issuing the Convertible Subordinated Notes may use a
"CUSIP" number, and if so, such CUSIP number shall be included in notices of
redemption, repurchase or exchange as a convenience to holders of Convertible
Subordinated Notes; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Convertible Subordinated Notes and that reliance
may be placed only on the other identification numbers printed on the
Convertible Subordinated Notes. The Company will promptly notify the Trustee of
any change in the CUSIP number.
ARTICLE 3
REDEMPTION
SECTION 3.1 OPTIONAL REDEMPTION.
The Company may redeem all or any portion of the Convertible Subordinated
Notes upon the terms and at the redemption prices set forth in each of the
Convertible Subordinated Notes, subject to the other terms and conditions set
forth in Paragraph 5 of the Convertible Subordinated Notes. Any redemption
shall be made pursuant to Paragraph 5 of the Convertible Subordinated Notes and
this Article 3.
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SECTION 3.2 NOTICES TO TRUSTEE.
If the Company elects to redeem Convertible Subordinated Notes pursuant
to the optional redemption provisions of paragraph 5 of the Convertible
Subordinated Notes, it shall furnish to the Trustee, at least 15 (20 if less
than all of the then outstanding Convertible Subordinated Notes are to be
redeemed or if the Company requests the Trustee to give notice of redemption
pursuant to Section 3.4) days but not more than 60 days before a redemption date
(unless a shorter period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Convertible Subordinated Notes (if less than all) to be redeemed, (iv) the
redemption price and (v) the CUSIP number of the Convertible Subordinated Notes
being redeemed.
SECTION 3.3 SELECTION OF CONVERTIBLE SUBORDINATED NOTES TO BE REDEEMED.
If less than all the Convertible Subordinated Notes are to be redeemed,
the Trustee shall select the Convertible Subordinated Notes to be redeemed, on a
pro rata basis by lot or by such method that the Company shall direct in writing
at least 30 days prior to the applicable redemption date. The Trustee shall make
the selection not more than 30 days and not less than 15 days before the
redemption date from Convertible Subordinated Notes outstanding and not
previously called for redemption. The Trustee may select for redemption a
portion of the principal of any Convertible Subordinated Note that has a
denomination larger than $50. Convertible Subordinated Notes and portions
thereof will be redeemed in the amount of $50 or integral multiples of $50.
Provisions of this Indenture that apply to Convertible Subordinated Notes
called for redemption also apply to portions of Convertible Subordinated Notes
called for redemption. The Trustee shall notify the Company promptly of the
Convertible Subordinated Notes or portions of Convertible Subordinated Notes to
be called for redemption.
If any Convertible Subordinated Note selected for partial redemption
is converted in part after such selection, the converted portion of such
Convertible Subordinated Note shall be deemed (so far as may be) to be the
portion to be selected for redemption. The Convertible Subordinated Notes
(or portion thereof) so selected shall be deemed duly selected for redemption
for all purposes hereof, notwithstanding that any such Convertible
Subordinated Note is converted in whole or in part before the mailing of the
notice of redemption. Upon any redemption of less than all the Convertible
Subordinated Notes, the Company and the Trustee may treat as outstanding any
Convertible Subordinated Notes surrendered for conversion
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during the period of 15 days next preceding the mailing of a notice of
redemption and need not treat as outstanding any Convertible Subordinated
Note authenticated and delivered during such period in exchange for the
unconverted portion of any Convertible Subordinated Note converted in part
during such period.
SECTION 3.4 NOTICE OF REDEMPTION.
At least 15 days but not more than 30 days before a redemption date, the
Company shall mail by first class mail a notice of redemption to each holder
whose Convertible Subordinated Notes are to be redeemed.
The notice shall identify the Convertible Subordinated Notes to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Convertible Subordinated Note is being redeemed in part,
the portion of the principal amount of such Convertible Subordinated Note to be
redeemed and that, after the redemption date, upon surrender of such Convertible
Subordinated Note, a new Convertible Subordinated Note or Convertible
Subordinated Notes in principal amount equal to the unredeemed portion will be
issued in the name of the holder thereof;
(4) that Convertible Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) that interest on Convertible Subordinated Notes called for
redemption and for which funds have been set apart for payment, ceases to accrue
on and after the redemption date (unless the Company defaults in the payment of
the redemption price or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture);
(6) the paragraph of the Convertible Subordinated Notes pursuant to
which the Convertible Subordinated Notes called for redemption are being
redeemed;
(7) the aggregate principal amount of Convertible Subordinated Notes
(if less than all) that are being redeemed;
(8) the CUSIP number of the Convertible Subordinated Notes (PROVIDED
that the disclaimer permitted by Section 2.13 may be made);
(9) the name and address of the Paying Agent;
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(10) that Convertible Subordinated Notes called for redemption may be
converted at any time prior to the close of business on the last trading day
immediately preceding the redemption date and if not converted prior to the
close of business on such date, the right of conversion will be lost; and
(11) that in the case of Convertible Subordinated Notes or portions
thereof called for redemption on a date that is also an Interest Payment Date,
the interest payment due on such date shall be paid to the person in whose name
the Convertible Subordinated Note is registered at the close of business on the
relevant Regular Record Date.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the holder receives such notice. In
any case, failure to give such notice my mail or any defect in the notice to the
holder of any Convertible Subordinated Note designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any Convertible Subordinated Note.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at its expense.
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Convertible Subordinated Notes
called for redemption become due and payable on the redemption date at the
redemption price set forth in the Convertible Subordinated Note.
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money in immediately available funds sufficient
to pay the redemption price of and accrued interest on all Convertible
Subordinated Notes to be redeemed on that date. The Trustee or the Paying Agent
shall return to the Company any money not required for that purpose.
On and after the redemption date, unless the Company shall default in the
payment of the redemption price, interest will cease to accrue on the principal
amount of the Convertible Subordinated Notes or portions thereof called for
redemption and for which funds have been set apart for payment and such
Convertible Subordinated Notes shall cease after the close of business on the
trading day immediately preceding the Redemption Date to be convertible into
Common Stock and, except as provided in this Section 3.6 and Section 8.4, shall
cease after the close of business on the business day immediately preceding the
Redemption Date to be entitled to
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any benefit or security under this Indenture, and the holders thereof shall
have no right in respect of such Convertible Subordinated Notes except the
right to receive the Redemption Price thereof and unpaid interest to (but
excluding) the Redemption Date. In the case of Convertible Subordinated
Notes or portions thereof redeemed on a redemption date which is also an
Interest Payment Date, the interest payment due on such date shall be paid to
the person in whose name the Convertible Subordinated Note is registered at
the close of business on the relevant Regular Record Date.
SECTION 3.7 CONVERTIBLE SUBORDINATED NOTES REDEEMED IN PART.
Upon surrender of a Convertible Subordinated Note that is redeemed in
part only, the Company shall issue and the Trustee shall authenticate and
deliver to the holder of a Convertible Subordinated Note a new Convertible
Subordinated Note equal in principal amount to the unredeemed portion of the
Convertible Subordinated Note surrendered, at the expense of the Company, except
as specified in Section 2.6.
SECTION 3.8 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Convertible Subordinated Notes, the
Company may arrange for the purchase and conversion of any Convertible
Subordinated Notes by an arrangement with one or more investment bankers or
other purchasers to purchase such Convertible Subordinated Notes by paying to
the Trustee in trust for the holders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with interest accrued to the date fixed for redemption, of such Convertible
Subordinated Notes. Notwithstanding anything to the contrary contained in this
Article 3, the obligation of the Company to pay the redemption price of such
Convertible Subordinated Notes, together with interest accrued to the date fixed
for redemption, shall be deemed to be satisfied and discharged to the extent
such amount is so paid by the purchasers. If an agreement reflecting such an
arrangement is entered into, a copy of such agreement will be filed with the
Trustee prior to the date fixed for redemption (it being understood that, unless
the Trustee otherwise agrees, the Trustee shall have no responsibility for
content of any such agreement), any Convertible Subordinated Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 12) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the date fixed for redemption
(and the right to convert any such Convertible Subordinated Notes shall be
deemed to have been extended through such time), subject to payment of the above
amount as
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aforesaid. At the direction of the Company, the Trustee shall hold
and dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Convertible Subordinated
Notes. Without the Trustee's prior written consent, no arrangement between the
Company and such purchasers for the purchase and conversion of any Convertible
Subordinated Notes shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture,
and the Company agrees to indemnify the Trustee from, and hold it harmless
against, any loss, liability or expense arising out of or in connection with any
such arrangement for the purchase and conversion of any Convertible Subordinated
Notes between the Company and such purchasers to which the Trustee has not
consented in writing, including the costs and expenses incurred by the Trustee
in the defense of any claim or liability arising out of or in connection with
the exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF CONVERTIBLE SUBORDINATED NOTES.
The Company shall pay the principal of and interest on the Convertible
Subordinated Notes on the dates and in the manner provided in the Convertible
Subordinated Notes. Principal, interest, the redemption price and the
Designated Event Payment shall be considered paid on the date due if the Trustee
or Paying Agent (other than the Company or a Subsidiary of the Company) holds as
of 10:00 a.m. New York City time on that date immediately available funds
designated for and sufficient to pay all principal, interest, the redemption
price and the Designated Event Payment then due, PROVIDED, HOWEVER, that money
held by the Agent for the benefit of holders of Senior Debt pursuant to the
provisions of Article 11 hereof or the payment of which to the holders of the
Convertible Subordinated Notes is prohibited by Article 11 shall not be
considered to be designated for the payment of any principal of or interest on
the Convertible Subordinated Notes within the meaning of this Section 4.1.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
(i) overdue principal, at the rate borne by Convertible Subordinated Notes,
compounded semiannually; and (ii) overdue installments of interest (without
regard to any applicable grace period) at the same rate, compounded
semiannually.
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SECTION 4.2 COMMISSION REPORTS.
The Company shall comply with Section 314(a) of the TIA.
SECTION 4.3 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company (which fiscal year, as of the date hereof,
coincides with the calendar year), an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has fully performed its
obligations under this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge, the Company
is not in default in the performance or observance of any of the terms and
conditions hereof (or, if any Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge) and, that to the best of his or her knowledge, no event has occurred
and remains in existence by reason of which payments on account of the principal
of or interest on the Convertible Subordinated Notes are prohibited.
The Company shall, so long as any of the Convertible Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default.
SECTION 4.4 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain or cause to be maintained the office or agency
required under Section 2.3. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not maintained 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, presentations, surrenders, notices and demands with
respect to the Convertible Subordinated Notes may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Convertible Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designation.
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SECTION 4.5 CONTINUED EXISTENCE.
Subject to Article 5, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
SECTION 4.6 REPURCHASE UPON DESIGNATED EVENT.
Following a Designated Event (the date of each such occurrence being the
"Designated Event Date"), the Company shall notify the holders of Convertible
Subordinated Notes in writing of such occurrence and shall make an offer (the
"Designated Event Offer") to repurchase all or any part (equal to $50 or an
integral multiple thereof) Convertible Subordinated Notes then outstanding at a
repurchase price in cash (the "Designated Event Payment") equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to, but
excluding, the Designated Event Payment Date (as defined below).
Notice of a Designated Event shall be mailed by or at the direction of
the Company to the holders of Convertible Subordinated Notes as shown on the
Register of such holders maintained by the Registrar not more than 20 days after
the applicable Designated Event Date at the addresses as shown on the Register
of holders maintained by the Registrar, with a copy to the Trustee and the
Paying Agent. The Designated Event Offer shall remain open until a specified
date (the "Designated Event Offer Termination Date") which is at least 20
business days from the date such notice is mailed. During the period specified
in such notice, holders of Convertible Subordinated Notes may elect to tender
their Convertible Subordinated Notes in whole or in part in integral multiples
of $50 in exchange for cash. Payment shall be made by the Company in respect of
Convertible Subordinated Notes properly tendered pursuant to this Section on a
specified business day (the "Designated Event Payment Date") which shall be no
earlier than five business days after the applicable Designated Event Offer
Termination Date and no later than 60 days after the applicable Designated
Event.
The notice, which shall govern the terms of the Designated Event Offer,
shall include such disclosures as are required by law and shall state:
(a) that a Designated Event Offer is being made pursuant to this
Section 4.6 and that all Convertible Subordinated Notes will be accepted for
payment;
(b) the transaction or transactions that constitute the Designated
Event;
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(c) the Designated Event Payment for each Convertible Subordinated
Note, the Designated Event Offer Termination Date and the Designated Event
Payment Date;
(d) that any Convertible Subordinated Note not accepted for payment
will continue to accrue interest in accordance with the terms thereof;
(e) that, unless the Company defaults on making the Designated Event
Payment, any Convertible Subordinated Note accepted for payment pursuant to the
Designated Event Offer shall cease to accrue interest on the Designated Event
Payment Date and no further interest shall accrue on or after such date;
(f) that holders electing to have Convertible Subordinated Notes
repurchased pursuant to a Designated Event Offer will be required to surrender
their Convertible Subordinated Notes to the Paying Agent at the address
specified in the notice prior to 5:00 p.m., New York City time, on the
Designated Event Offer Termination Date and must complete any form letter of
transmittal proposed by the Company and acceptable to the Trustee and the Paying
Agent;
(g) that holders of Convertible Subordinated Notes will be entitled to
withdraw their election if the Paying Agent receives, not later than 5:00 p.m.,
New York City time, on the Designated Event Offer Termination Date, a facsimile
transmission or letter setting forth the name of the holder, the principal
amount of Convertible Subordinated Notes the holder delivered for purchase, the
Convertible Subordinated Note certificate number (if any) and a statement that
such holder is withdrawing his election to have such Convertible Subordinated
Notes purchased;
(h) that holders whose Convertible Subordinated Notes are repurchased
only in part will be issued Convertible Subordinated Notes equal in principal
amount to the unpurchased portion of the Convertible Subordinated Notes
surrendered;
(i) the instructions that holders must follow in order to tender their
Convertible Subordinated Notes; and
(j) that in the case of a Designated Event Offer Termination Date that
is also an interest payment date, the interest payment due on such date shall be
paid to the person in whose name the Convertible Subordinated Note is registered
at the close of business on the relevant Designated Event Offer Termination
Date.
On the Designated Event Offer Termination Date the Company shall, to the
extent lawful, (i) accept for payment all Convertible Subordinated Notes or
portions thereof
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properly tendered pursuant to the Designated Event Offer, (ii) deposit with
the Paying Agent money sufficient to pay the Designated Event Payment with
respect to all Convertible Subordinated Notes or portions thereof so tendered
and (iii) deliver or cause to be delivered to the Trustee the Convertible
Subordinated Notes so accepted together with an Officers' Certificate setting
forth the aggregate principal amount of Convertible Subordinated Notes or
portions thereof tendered to and accepted for payment by the Company. On the
Designated Event Payment Date, the Paying Agent shall mail or deliver to the
holders of Convertible Subordinated Notes so accepted, the Designated Event
Payment, and on such date the Trustee shall authenticate and mail or cause to
be transferred by book entry to such holders a new Convertible Subordinated
Note equal in principal amount to any unpurchased portion of the Convertible
Subordinated Note surrendered, if any; PROVIDED that such new Convertible
Subordinate Notes will be in a principal amount of $50 or an integral
multiple thereof. Any Convertible Subordinated Notes not so accepted shall
be promptly mailed or delivered by the Company to the holder thereof.
In the case of any reclassification, change, consolidation, merger,
combination or sale or conveyance to which Section 12.6 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash) which
includes shares of common stock of the Company or 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 stock, securities other property and assets (including cash) (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 (which shall comply with the TIA 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 Convertible Subordinated
Notes to cause the Company to repurchase Convertible Subordinated Notes
following a Designated Event, including the applicable provisions of this
Section 4.6 and the definitions of Designated Event, Change of Control and
Termination of Trading, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provision apply to such common stock and the issuer thereof if different from
the Company and Common Stock of the Company (in lieu of the Company and the
Common Stock of the Company).
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The Designated Event Offer shall be made by the Company in compliance
with all applicable provisions of the Exchange Act, and all applicable tender
offer rules promulgated thereunder, to the extent such laws and regulations are
then applicable and shall include all instructions and materials that the
Company shall reasonably deem necessary to enable such holders of Convertible
Subordinated Notes to tender their Convertible Subordinated Notes.
SECTION 4.7 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE.
The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 7.8, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 4.8 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter enforced, that may affect the Company's
obligation to pay the Convertible Subordinated Notes; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law insofar as such law applies to the Convertible
Subordinated Notes, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law has been enacted.
SECTION 4.9 TAXES.
The Company shall, and shall cause each of its Subsidiaries to, pay prior
to delinquency all taxes, assessments and government levies, except as contested
in good faith and by appropriate proceedings.
ARTICLE 5
SUCCESSORS
SECTION 5.1 WHEN THE COMPANY MAY MERGE, ETC.
The Company may not, in a single transaction or series of related
transactions, consolidate or merge with or into (whether or not the Company is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or
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more related transactions to, any person as an entirety or substantially as
an entirety unless:
(a) either
(i) the Company shall be the surviving or continuing
corporation or
(ii) the person formed by or surviving any such consolidation or
into which the Company is merged (if other than the Company) or the person which
acquires by sale, assignment, transfer, lease, conveyance or other disposition
the properties and assets of the Company substantially as an entirety
(1) shall be organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(2) shall expressly assume, by supplemental indenture in
form reasonably satisfactory to the Trustee, executed and delivered to the
Trustee, the due and punctual payment of the principal of, and premium, if any,
and interest on all of the Convertible Subordinated Notes and the performance of
every covenant of the Convertible Subordinated Notes and this Indenture on the
part of the Company to be performed or observed, including, without limitation,
modifications to rights of holders to cause the repurchase of Convertible
Subordinated Notes upon a Designated Event in accordance with the last paragraph
of Section 4.6 and conversion rights in accordance with Section 12.6 to the
extent required by such Sections;
(b) immediately after giving effect to such transaction no Default and
no Event of Default shall have occurred and be continuing; and
(c) the Company or such person shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with this provision of this Indenture and that all conditions
precedent in this Indenture relating to such transaction have been satisfied.
For purposes of this Section 5.1, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries of the
Company, the capital stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
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SECTION 5.2 SUCCESSOR SUBSTITUTED.
Upon any such consolidation, merger, sale, assignment, conveyance,
lease, transfer or other disposition in accordance with Section 5.1, the
successor person formed by such consolidation or into which the Company is
merged or to which such sale, assignment, conveyance, lease, transfer or
other disposition is made will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor had been named as the Company therein, and
thereafter (except in the case of a sale, assignment, transfer, lease,
conveyance or other disposition) the predecessor corporation will be relieved
of all further obligations and covenants under this Indenture and the
Convertible Subordinated Notes.
SECTION 5.3 PURCHASE OPTION ON CHANGE OF CONTROL.
This Article 5 does not affect the obligations of the Company
(including without limitation, any successor to the Company) under Section
4.6.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" with respect to any Convertible Subordinated
Notes occurs if:
(a) the Company defaults in the payment (whether or not such
payment is prohibited by the subordination provisions set forth in Article 11
of this Indenture) of principal of, or premium, if any, on the Convertible
Subordinated Notes when due at maturity, upon repurchase, upon acceleration
or otherwise, including, without limitation, failure of the Company to make
any optional redemption payment when required pursuant to Article 3; or
(b) the Company defaults in the payment (whether or not such
payment is prohibited by the subordination provisions set forth in Article 11
of this Indenture) of any installment of interest on the Convertible
Subordinated Notes when due (including any interest payable in connection
with a repurchase pursuant to Section 4.6 or in connection with any optional
redemption payment pursuant to Article 3) and continuance of such default for
30 days or more; or
(c) the Company defaults (other than a default set forth in clauses
(a) and (b) above and clause (d) below) in the performance of, or breaches, any
other covenant or warranty of the Company set forth in this Indenture or the
Convertible
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Subordinated Notes and fails to remedy such default or breach within a period
of 60 days after the receipt of written notice from the Trustee or the
holders of at least 25% in aggregate principal amount of the then outstanding
Convertible Subordinated Notes; or
(d) the Company defaults in the payment of the Designated Event
Payment in respect of the Convertible Subordinated Notes on the date
therefor, whether or not such payment is prohibited by the subordination
provisions set forth in Article 11 of this Indenture; or
(e) the Company fails to provide timely notice of any Designated
Event in accordance with Section 4.6; or
(f) failure of the Company or any Material Subsidiary to make any
payment at maturity, including any applicable grace period, in respect of
indebtedness for borrowed money of, or guaranteed or assumed by, the Company
or any Material Subsidiary, which payment is in an amount in excess of
$1,000,000, and continuance of such failure for 30 days after notice thereof
from the Trustee or the holders of at least 25% in aggregate principal amount
of the then outstanding Convertible Subordinated Notes; or
(g) default by the Company or any Material Subsidiary with respect
to any indebtedness referred to in clause (f) above, which default results in
the acceleration of any such indebtedness of an amount in excess of
$1,000,000 without such indebtedness having been paid or discharged or such
acceleration having been cured, waived, rescinded or annulled for 30 days
after notice thereof from the Trustee or the holders of at least 25% in
aggregate principal amount of the then outstanding Convertible Subordinated
Notes; or
(h) the Company or any Material Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:
(v) commences a voluntary case,
(w) consents to the entry of an order for relief against it
in an involuntary case,
(x) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(y) makes a general assignment for the benefit of its
creditors, or
(z) makes the admission in writing that it generally is
unable to pay its debts as the same become due; or
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(i) a court of competent jurisdiction enters a judgment, order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Material
Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for 30
days, or
(iii) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for 30
days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term "Custodian" means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
In the case of any Event of Default, pursuant to the provisions of
this Section 6.1, occurring by reason of any wilful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium which the Company would have had to pay if
the Company then had elected to redeem the Convertible Subordinated Notes
pursuant to Paragraph 5 of the Convertible Subordinated Notes, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law, upon the acceleration of the Convertible Subordinated Notes
notwithstanding anything contained in this Indenture or in the Convertible
Subordinated Notes to the contrary.
If an Event of Default occurs prior to any date on which the Company
is prohibited from redeeming the Convertible Subordinated Notes, pursuant to
Paragraph 5 of the Convertible Subordinated Notes, by reason of any wilful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Convertible
Subordinated Notes prior to such date, then the premium specified in this
Indenture shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Convertible Subordinated Notes.
SECTION 6.2 ACCELERATION.
If an Event of Default (other than an Event of Default with respect to
the Company specified in clauses (h) and (i) of Section 6.1) occurs and is
continuing, then and in every such case the Trustee, by written notice to the
Company, or the holders of at least 25% in aggregate principal amount of the
then outstanding Convertible Subordinated Notes, by written notice to the
Company and the Trustee, may declare the unpaid principal of, premium, if
any, and accrued and unpaid interest on all the Convertible Subordinated
Notes to be due
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and payable. Upon such declaration such principal amount, premium, if any,
and accrued and unpaid interest shall become immediately due and payable,
notwithstanding anything contained in this Indenture or the Convertible
Subordinated Notes to the contrary, but subject to the provisions of Article
11 hereof. If any Event of Default with respect to the Company specified in
clauses (h) or (i) of Section 6.1 occurs, all unpaid principal of and
premium, if any, and accrued and unpaid interest on the Convertible
Subordinated Notes then outstanding shall become automatically due and
payable subject to the provisions of Article 11 hereof, without any
declaration or other act on the part of the Trustee or any holder of
Convertible Subordinated Notes.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Subordinated Notes by notice to the Trustee may
rescind an acceleration of the Convertible Subordinated Notes and its
consequences if all existing Events of Default (other than nonpayment of
principal of or premium, if any, and interest on the Convertible Subordinated
Notes which has become due solely by virtue of such acceleration) have been
cured or waived and if the rescission would not conflict with any judgment or
decree of any court of competent jurisdiction. No such rescission shall
affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Convertible Subordinated Notes or
to enforce the performance of any provision of the Convertible Subordinated
Notes or this Indenture. The Trustee may maintain a proceeding even if it
does not possess any of the Convertible Subordinated Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or
any holder of a Convertible Subordinated Note in exercising any right or
remedy occurring upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default.
All remedies are cumulative to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
The holders of a majority in aggregate principal amount of the
Convertible Subordinated Notes then outstanding may, on behalf of the holders
of all the Convertible Subordinated Notes, waive an existing Default or Event
of Default and its consequences, except a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the
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Convertible Subordinated Notes (other than the non-payment of principal of
and premium, if any, and interest on the Convertible Subordinated Notes which
has become due solely by virtue of an acceleration which has been duly
rescinded as provided above), or in respect of a covenant or provision of
this Indenture which cannot be modified or amended without the consent of all
holders of Convertible Subordinated Notes. When a Default or Event of
Default is waived, it is cured and stops continuing. No waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
The holders of a majority in aggregate principal amount of the then
outstanding Convertible Subordinated Notes may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture that
the Trustee determines may be unduly prejudicial to the rights of other
holders of Convertible Subordinated Notes or that may involve the Trustee in
personal liability; PROVIDED that the Trustee shall have no duty or
obligation (subject to Section 7.1) to ascertain whether or not such actions
of forebearances are unduly prejudicial to such holders; PROVIDED, FURTHER,
that the Trustee may take any other action the Trustee deems proper that is
not inconsistent with such directions.
SECTION 6.6 LIMITATION ON SUITS.
A holder of a Convertible Subordinated Note may not pursue any remedy
with respect to this Indenture or the Convertible Subordinated Notes unless:
(1) the holder gives to the Trustee notice of a continuing Event of
Default;
(2) the holders of at least 25% in principal amount of the then
outstanding Convertible Subordinated Notes make a request to the Trustee to
pursue the remedy;
(3) such holder or holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(5) during such 60-day period the holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes do
not give the Trustee a direction inconsistent with the request.
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A holder of a Convertible Subordinated Note may not use this Indenture
to prejudice the rights of another holder or to obtain a preference or
priority over another holder.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Subject to the provisions of Article 11 hereof, notwithstanding any
other provision of this Indenture, the right of any holder of a Convertible
Subordinated Note to receive payment of principal, premium, if any, and
interest on the Convertible Subordinated Note, on or after the respective due
dates expressed in the Convertible Subordinated Note, or to bring suit for
the enforcement of any such payment on or after such respective dates, or to
bring suit for the enforcement of the right to convert the Convertible
Subordinated Note shall not be impaired or affected without the consent of
the holder of a Convertible Subordinated Note.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(a), (b) or (d) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal and interest remaining unpaid on the Convertible Subordinated Notes
and interest on overdue principal and interest and such further amount as
shall be sufficient to cover the costs and, to the extent lawful, expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the holders of Convertible Subordinated Notes allowed in any
judicial proceedings relative to the Company, its creditors or its property.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any holder of a
Convertible Subordinated Note any plan of reorganization, arrangement,
adjustment or composition affecting the Convertible Subordinated Notes or the
rights of any holder thereof, or to authorize the Trustee to vote in respect
of the claim of any holder in any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7, including
payment of all compensation, expenses and
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liabilities incurred, and all advances made, by the Trustee, and the costs
and expenses of collection;
Second: to holders of Senior Debt to the extent required by Article 11;
Third: ratably (a) to holders of Convertible Subordinated Notes for
amounts due and unpaid on the Convertible Subordinated Notes for principal,
premium, if any, and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Convertible
Subordinated Notes for principal, premium, if any, and interest,
respectively, and (b) to the holders of any Indebtedness PARI PASSU with the
Convertible Subordinated Notes; and
Fourth: to the Company.
Except as otherwise provided in Section 2.12, the Trustee may fix a
record date and payment date for any payment to holders of Convertible
Subordinated Notes.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit, other than the Trustee, of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit
by the Trustee, a suit by a holder pursuant to Section 6.7 or a suit by
holders of more than 10% in principal amount of the then outstanding
Convertible Subordinated Notes.
ARTICLE 7
THE TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed. Whether
or not herein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Article 7.
SECTION 7.1 DUTIES OF THE TRUSTEE.
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(a) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested
in it by this Indenture and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default known to
the Trustee:
(1) The duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no others
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the form required by this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that is in any way related to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any financial liability in the performance of any
of its duties or the exercise of any of its rights and powers hereunder, if it
shall have reasonable grounds for believing that repayment of
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such funds or adequate indemnity against such risk of liability is not
reasonably assured to it.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.2 RIGHTS OF THE TRUSTEE.
(a) The Trustee may rely on and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, security or other document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter contained therein.
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof is herein specifically prescribed).
In addition, before the Trustee acts or refrains from acting, it may require
an Officers' Certificate, an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection
from liability in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(c) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its
attorneys and agents and other persons not regularly in its employ and shall
not be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith without negligence or willful misconduct which it
believes to be authorized or within its discretion, rights or powers.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by Officers of the Company.
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(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
discretion of any of the holders of Convertible Subordinated Notes pursuant
to the provisions of this Indenture, unless such holders have offered to the
Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities which might be incurred therein or thereby.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, security or
other document unless requested in writing to do so by the holders of not
less than a majority in aggregate principal amount of the Convertible
Subordinated Notes then outstanding, PROVIDED that if the Trustee determines
in its discretion to make any such investigation, then it shall be entitled,
upon reasonable prior notice and during normal business hours, to examine the
books and records and the premises of the Company, personally or by agent or
attorney, and the reasonable expenses of every such examination shall be paid
by the Company or, if paid by the Trustee or any predecessor Trustee, shall
be reimbursed by the Company upon demand.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or wilful misconduct.
(j) The Trustee shall not be responsible for the computation of any
adjustment to the Conversion Price or for any determination as to whether an
adjustment is required and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received the notice from the
Company contemplated by Section 12.5(k).
SECTION 7.3 INDIVIDUAL RIGHTS OF THE TRUSTEE.
Subject to Sections 7.10 and 7.11, the Trustee in its individual or
any other capacity may become the owner or pledgee of Convertible
Subordinated Notes with the same rights it would have if it were not the
Trustee and may otherwise deal with the Company or an Affiliate of the
Company and receive, collect, hold and retain collections from the Company
with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
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SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Convertible
Subordinated Notes. It shall not be accountable for the Company's use of the
proceeds from the Convertible Subordinated Notes or any money paid to the
Company or upon the Company's direction under any provision of this
Indenture. It shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not
be responsible for any statement or recital herein or any statement in the
Convertible Subordinated Notes or any other document in connection with the
sale of the Convertible Subordinated Notes or pursuant to this Indenture
other than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each holder of a Convertible
Subordinated Note a notice of the Default or Event of Default within 60 days
after it occurs. A Default or an Event of Default shall not be considered
known to the Trustee unless it is a Default or Event of Default in the
payment of principal or interest when due under Section 6.1(a), (b) or (d) or
the Trustee shall have received notice thereof, in accordance with this
Indenture (including Section 10.12 hereof), from the Company or from the
holders of a majority in principal amount of the outstanding Convertible
Subordinated Notes. Except in the case of a Default or Event of Default in
payment of principal of, premium, if any, or interest on any Convertible
Subordinated Note, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interest of the holders of the Convertible Subordinated
Notes.
SECTION 7.6 REPORTS BY THE TRUSTEE TO HOLDERS.
Within 60 days after the reporting date stated in Section 10.10, the
Trustee shall mail to holders of Convertible Subordinated Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within twelve
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to holders of
Convertible Subordinated Notes shall be filed, at the expense of the Company, by
the Trustee with the Commission and each stock exchange or securities market, if
any, on which
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the Convertible Subordinated Notes are listed. The Company shall timely
notify the Trustee when the Convertible Subordinated Notes are listed or
quoted on any stock exchange or securities market.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time and the Trustee
shall be entitled to reasonable compensation for its acceptance of this
Indenture and its services hereunder. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by or on behalf of it
in addition to the compensation for its services. Such expenses may include
the reasonable compensation, disbursements and expenses of the Trustee's
agents, counsel and other persons not regularly in its employ.
The Company shall indemnify the Trustee against any loss, liability or
expense incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture and the trusts hereunder,
including the costs and expenses of defending itself against or investigating
any claim of liability in the premises, except as set forth in the next
paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim with counsel
designated by the Company, who may be outside counsel to the Company but
shall in all events be reasonably satisfactory to the Trustee, and the
Trustee shall cooperate in the defense. In addition, the Trustee may retain
separate counsel and, if deemed advisable by such counsel, local counsel, and
the Company shall pay the reasonable fees and expenses of such separate
counsel and local counsel. The indemnification herein extends to any
settlement, PROVIDED that the Company will not be liable for any settlement
made without its consent, PROVIDED, FURTHER, that such consent will not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or
wilful misconduct.
The Trustee shall have a lien prior to the Convertible Subordinated
Notes on all money or property held or collected by the Trustee to secure the
Company's payment obligations in this Section 7.7, except that held in trust
to pay principal and interest on Convertible Subordinated Notes. Such liens
and the Company's obligations under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(h) or (i) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.8 REPLACEMENT OF THE TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance
of appointment as provided in this Section 7.8.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company. The holders of a majority in
principal amount of the then outstanding Convertible Subordinated Notes may
remove the Trustee by so notifying the Trustee and the Company in writing and
may appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the holders of a majority in principal amount of the then outstanding
Convertible Subordinated Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the holders of at least 10% in principal amount of the then outstanding
Convertible Subordinated Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee after written request by any holder of a Convertible
Subordinated Note who has been a holder for at least six months fails to
comply with Section 7.10, such holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to holders of Convertible Subordinated Notes. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, PROVIDED that all sums owing to the retiring Trustee
hereunder have been paid and subject to the lien provided for in Section 7.7.
Notwithstanding the replacement of the Trustee pursuant to this Section 7.8,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee with respect to expenses and liabilities incurred by it
prior to such replacement.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in the preceding paragraph.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business (including
the trust created by this Indenture) to, another corporation or national
banking association, the resulting, surviving or transferee corporation or
national banking association without any further act shall be the successor
Trustee with the same effect as if the successor Trustee had been named as
the Trustee herein.
SECTION 7.10 ELIGIBILITY, DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a
combined capital and surplus as stated in Section 10.10. The Trustee is
subject to TIA Section 310(b) regarding the disqualification of a trustee
upon acquiring a conflicting interest.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship set forth in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
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ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 DISCHARGE OF INDENTURE.
When (a) the Company delivers to the Trustee for cancellation all
Convertible Subordinated Notes theretofore authenticated (other than any
Convertible Subordinated Notes which have been destroyed, lost or stolen and
in lieu of or in substitution for which other Convertible Subordinated Notes
have been authenticated and delivered) and not theretofore canceled, or (b)
all the Convertible Subordinated Notes not theretofore canceled or delivered
to the Trustee for cancellation have become due and payable, or by their
terms will become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company deposits with the
Trustee, in trust, amounts sufficient to pay at maturity or upon redemption
of all of the Convertible Subordinated Notes (other than any Convertible
Subordinated Notes which have been mutilated, destroyed, lost or stolen and
in lieu of or in substitution for which other Convertible Subordinated Notes
have been authenticated and delivered) not theretofore canceled or delivered
to the Trustee for cancellation, including principal and premium, if any, and
interest due or to become due to such date of maturity or redemption date, as
the case may be, and if in either case the Company also pays, or causes to be
paid, all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to (i) rights of registration
of transfer, substitution, replacement and exchange and conversion of
Convertible Subordinated Notes, (ii) rights hereunder of holders of
Convertible Subordinated Notes to receive payments of principal of and
premium, if any, and interest on, the Convertible Subordinated Notes, (iii)
the obligations under Sections 2.3 and 8.5 hereof and (iv) the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel as required by Section 10.4 and at the Company's cost and expense,
shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, xxxxxx agrees to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Convertible Subordinated Notes.
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SECTION 8.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE.
Subject to Section 8.4, all monies deposited with the Trustee pursuant
to Section 8.1 shall be held in trust and applied by it to the payment,
notwithstanding the provisions of Article 11, either directly or through the
Paying Agent, to the holders of the particular Convertible Subordinated Notes
for the payment or redemption of which such monies have been deposited with
the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
SECTION 8.3 PAYING AGENT TO REPAY MONIES HELD.
Upon the satisfaction and discharge of this Indenture, all monies then
held by any Paying Agent (other than the Trustee) shall, upon the Company's
demand, be repaid to it or paid to the Trustee, and thereupon such Paying
Agent shall be released from all further liability with respect to such
monies.
SECTION 8.4 RETURN OF UNCLAIMED MONIES.
Anything contained herein to the contrary notwithstanding, and subject
to any applicable law, any money held by the Trustee in trust for the payment
and discharge of the interest or premium (if any) on or principal of any of
the Convertible Subordinated Notes which remains unclaimed for two (2) years
after the date when each payment of such interest, premium and principal has
become payable shall be repaid within sixty (60) days of such date by the
Trustee to the Company as its absolute property free from trust, and the
Trustee shall thereupon be released and discharged with respect thereto and
the holders shall look only to the Company for the payment of the principal
of and interest and redemption premium (if any) on such Convertible
Subordinated Notes. The Company may cause, or, if requested by the Company,
the Trustee shall cause notice of such payment to the Company to be mailed to
each holder of a Convertible Subordinated Note entitled thereto prior to such
payment. The Trustee shall not be liable to the Company or any holder for
interest on funds held by it for the payment and discharge of the interest,
or premium (if any) on or principal of any of the Convertible Subordinated
Notes to any holder. The Company shall not be liable for any interest on the
sums paid to it pursuant to this paragraph and shall not be regarded as a
trustee of such money.
SECTION 8.5 REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 8.2 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the
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Company's obligations under this Indenture and the Convertible Subordinated
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 until such time as the Trustee or the Paying Agent is
permitted to apply all such money in accordance with Section 8.2; PROVIDED,
HOWEVER, that if the Company makes any payment of interest on or principal of
any Convertible Subordinated Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders
thereof to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.1 WITHOUT THE CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Convertible Subordinated Notes without notice to or the consent of any
holder of a Convertible Subordinated Note for the purposes of:
(a) curing any ambiguity or correcting or supplementing any
defective or inconsistent provision contained in this Indenture or making any
other changes in the provisions of this Indenture which the Company and the
Trustee may deem necessary or desirable PROVIDED such amendment does not
adversely affect the legal rights under the Indenture of the holders of
Convertible Subordinated Notes.
(b) providing for uncertificated Convertible Subordinated Notes in
addition to or in place of certificated Convertible Subordinated Notes;
(c) evidencing the succession of another person to the Company and
providing for the assumption by such successor of the covenants and
obligations of the Company thereunder and in the Convertible Subordinated
Notes as permitted by Section 5.1;
(d) providing for conversion rights and/or repurchase rights of
holders of Convertible Subordinated Notes in the event of consolidation,
merger or sale of all or substantially all of the assets of the Company as
required to comply with Sections 5.1 and/or 12.6;
(e) reducing the Conversion Price;
(f) making any changes that would provide the holders of the
Convertible Subordinated Notes with any additional rights or benefits or that
does not adversely affect the legal rights under this Indenture of any such
holder; or
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(g) complying with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the TIA.
SECTION 9.2 WITH THE CONSENT OF HOLDERS.
Subject to Section 6.7, the Company and the Trustee may amend or
supplement this Indenture or the Convertible Subordinated Notes with the
written consent of the holders of at least a majority in principal amount of
the then outstanding Convertible Subordinated Notes (including consents
obtained in connection with a tender offer or exchange offer for Convertible
Subordinated Notes).
Subject to Sections 6.4 and 6.7, the holders of a majority in
principal amount of the Convertible Subordinated Notes then outstanding may
also waive any existing default or compliance in a particular instance by the
Company with any provision of this Indenture or the Convertible Subordinated
Notes.
However, without the consent of each holder of a Convertible
Subordinated Note affected, an amendment or waiver under this Section may not
(with respect to any Convertible Subordinated Notes held by a non-consenting
holder):
(a) reduce the principal amount of Convertible Subordinated Notes
whose holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or premium on or change the fixed
maturity of any Convertible Subordinated Note or, except as permitted
pursuant to Section 9.1(a), alter the redemption provisions with respect
thereto;
(c) reduce the rate of, or change the time for payment of,
interest, including defaulted interest, on any Convertible Subordinated Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Convertible Subordinated Notes
(except a rescission of acceleration of the Convertible Subordinated Notes by
the holders of at least a majority in aggregate principal amount of the
Convertible Subordinated Notes then outstanding and a waiver of the payment
default that resulted from such acceleration);
(e) make the principal of, or premium, if any, or interest on, any
Convertible Subordinated Note payable in money other than as provided for
herein and in the Convertible Subordinated Notes;
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(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or Events of Default or the rights of holders of
Convertible Subordinated Notes to receive payments of principal of, premium,
if any, or interest on the Convertible Subordinated Notes;
(g) waive a redemption payment with respect to any Convertible
Subordinated Notes;
(h) except as permitted herein (including Section 9.1(a)), increase
the Conversion Price or modify the provisions contained herein relating to
conversion of the Convertible Subordinated Notes in a manner adverse to the
holders thereof; or
(i) make any change to the abilities of holders of Convertible
Subordinated Notes to enforce their rights under the provisions of clauses
(a) through (i) of this Section 9.2.
To secure a consent of the holders of Convertible Subordinated Notes
under this Section, it shall not be necessary for such holders to approve the
particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to holders of Convertible Subordinated Notes a notice
briefly describing the amendment or waiver. In order to amend any provisions
of Article 11, holders of at least 75% in aggregate principal amount of
Convertible Subordinated Notes then outstanding must consent to such
amendment if such amendment would adversely affect the rights of holders of
Convertible Subordinated Notes.
SECTION 9.3 COMPLIANCE WITH THE TRUST INDENTURE ACT.
Every amendment to this Indenture or the Convertible Subordinated
Notes shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
holder of a Convertible Subordinated Note is a continuing consent by the
holder and every subsequent holder of a Convertible Subordinated Note or
portion of a Convertible Subordinated Note that evidences the same debt as
the consenting holder's Convertible Subordinated Note, even if notation of
the consent is not made on any Convertible Subordinated Note. However, any
such holder or subsequent holder may revoke the consent as to his or her
Convertible Subordinated Note or portion of a Convertible Subordinated Note
if the Trustee receives the notice of revocation before the date on which the
Trustee receives an Officers'
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Certificate certifying that the holders of the requisite principal amount of
Convertible Subordinated Notes have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the holders of Convertible Subordinated Notes
entitled to consent to any amendment or waiver. If a record date is fixed,
then notwithstanding the provisions of the immediately preceding paragraph,
those persons who were holders of Convertible Subordinated Notes at such
record date (or their duly designated proxies), and only those persons, shall
be entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be valid or
effective for more than 90 days after such record date unless consents from
holders of the principal amount of Convertible Subordinated Notes required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
holder of a Convertible Subordinated Note, unless it is of the type described
in clauses (a)-(i) of Section 9.2. In such case, the amendment or waiver
shall bind each holder of a Convertible Subordinated Note who has consented
to it and every subsequent holder of a Convertible Subordinated Note or
portion of a Convertible Subordinated Note that evidences the same debt as
the consenting holder's Convertible Subordinated Note.
SECTION 9.5 NOTATION ON OR EXCHANGE OF CONVERTIBLE SUBORDINATED NOTES.
Convertible Subordinated Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article 9 may, and
shall if required by the Trustee, bear a notation in the form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Convertible Subordinated Notes so modified as
to conform, in the opinion of the Company and the Trustee, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Convertible Subordinated Notes without charge to the holders of the
Convertible Subordinated Notes, except as specified in Section 2.6.
SECTION 9.6 TRUSTEE PROTECTED.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if such amendment or supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In
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signing such amendment or supplemental indenture, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that
such amendment or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid
and binding upon the Company in accordance with its terms.
ARTICLE 10
GENERAL PROVISIONS
SECTION 10.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), such duties imposed by such section
of the TIA shall control. If any provision of this Indenture expressly
modifies or excludes any provision of the TIA that may be so modified or
excluded, the Indenture provision so modifying or excluding such provision of
the TIA shall be deemed to apply.
SECTION 10.2 NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail, with postage prepaid (registered or certified, return receipt
requested), or sent by facsimile or overnight air couriers guaranteeing next
day delivery, to the other's address as stated in Section 10.10. The Company
or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
All notices and communications (other than those sent to holders of
Convertible Subordinated Notes) shall be deemed to have been duly given at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when transmission is
confirmed, if transmitted by facsimile; and the next business day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery. Notwithstanding the foregoing, all notices to the Trustee
shall be effective only upon receipt by a Trust Officer.
Any notice or communication to a holder of a Convertible Subordinated
Note shall be mailed by first-class mail, with postage prepaid, to his or her
address shown on the Register kept by the Registrar. Failure to mail a
notice or communication to a holder or any defect in it shall not affect its
sufficiency with respect to other holders.
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If a notice or communication is sent in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company sends a notice or communication to holders of
Convertible Subordinated Notes, it shall send a copy to the Trustee and each
Agent at the same time.
All notices or communications shall be in writing.
SECTION 10.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
holders with respect to their rights under this Indenture or the Convertible
Subordinated Notes. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
SECTION 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the statements
set forth in Section 10.5) stating that, in the opinion of such person, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 10.5) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she
has made such examination or investigation
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as is necessary to enable him or her to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any Officers' Certificate may be based, insofar as it relates to legal
matters, upon an Opinion of Counsel, unless such Officer knows that the
opinion with respect to the matters upon which his or her certificate may be
based as aforesaid is erroneous. Any Opinion of Counsel may be based,
insofar as it relates to factual matters, upon certificates, statements or
opinions of, or representations by an officer or officers of the Company, or
other persons or firms deemed appropriate by such counsel, unless such
counsel knows that the certificates, statements or opinions or
representations with respect to the matters upon which his or her opinion may
be based as aforesaid are erroneous.
Any Officers' Certificate, statement or Opinion of Counsel may be
based, insofar as it relates to accounting matters, upon a certificate or
opinion of or representation by an accountant (who may be an employee of the
Company), or firm of accountants, unless such Officer or counsel, as the case
may be, knows that the certificate or opinion or representation with respect
to the accounting matters upon which his or her certificate, statement or
opinion may be based as aforesaid is erroneous.
SECTION 10.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by, or a meeting of,
holders of Convertible Subordinated Notes. The Registrar or Paying Agent may
make reasonable rules and set reasonable requirements for its functions.
SECTION 10.7 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the Corporate Trust
Office of the Trustee is located or the City of Portland, Oregon are not
required to be open, and a "business day" is any day that is not a Legal
Holiday. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If any
date specified in this Indenture, including, without limitation, a redemption
date under Paragraph 5 of Convertible Subordinated Notes, is a Legal Holiday,
then such date shall be the next succeeding business day.
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SECTION 10.8 NO RECOURSE AGAINST OTHERS.
No director, officer, employee or shareholder, as such, of the Company
from time to time shall have any liability for any obligations of the Company
under the Convertible Subordinated Notes or this Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each holder by accepting a Convertible Subordinated Note waives and releases
all such liability. This waiver and release are part of the consideration
for the Convertible Subordinated Notes. Each of such directors, officers,
employees and shareholders is a third party beneficiary of this Section 10.8.
SECTION 10.9 COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 10.10 OTHER PROVISIONS.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The reporting date for Section 7.6 is [May 15] of each year. The
first reporting date is the [May 15] following the issuance of Convertible
Subordinated Notes hereunder.
The Trustee shall always have, or shall be a Subsidiary of a bank or
bank holding company which has, a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
The Company's address is:
Xxxxxxxxxx Industries, Inc.
1270 S.E. Monmouth Cutoff
Dallas, OR 97338-9532
Attention: Chief Financial Office
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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The Trustee's address is:
U.S. Trust Company, National Association
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Corporate Trust Department (Xxxxxxxxxx
Industries, Inc.
____% Convertible Notes due 2008)
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
SECTION 10.11 GOVERNING LAW.
The internal laws of the State of New York shall govern this Indenture
and the Convertible Subordinated Notes, without regard to the conflict of
laws provisions thereof.
SECTION 10.12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such other
indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 10.13 SUCCESSORS.
All agreements of the Company in this Indenture and the Convertible
Subordinated Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 10.14 SEVERABILITY.
In case any provision in this Indenture or in the Convertible
Subordinated Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 10.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
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ARTICLE 11
SUBORDINATION
SECTION 11.1 AGREEMENT TO SUBORDINATE.
The Company agrees, and each holder of Convertible Subordinated Notes by
accepting a Convertible Subordinated Note agrees, that the indebtedness
evidenced by the Convertible Subordinated Note is subordinated in right of
payment, to the extent and in the manner provided in this Article 11, to the
prior payment in full in cash or payment satisfactory to holders of Senior Debt
of all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
SECTION 11.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment
in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in
the applicable Senior Debt) in cash or other payment satisfactory to the holders
of the Senior Debt before holders of Convertible Subordinated Notes shall be
entitled to receive any payment with respect to the Convertible Subordinated
Notes (except that the holders of Convertible Subordinated Notes may receive
(i) securities that are subordinated to at least the same extent as the
Convertible Subordinated Notes to (a) Senior Debt and (b) any securities issued
in exchange for Senior Debt and (ii) payments and other distributions made from
any trust created pursuant to Section 8.1 hereof); and
(2) until all Senior Debt is paid in full in cash or other
payment satisfactory to the holders of the Senior Debt, any distribution to
which holders of Convertible Subordinated Notes would be entitled but for this
Article 11 shall be made to holders of Senior Debt (except that holders of
Convertible Subordinated Notes may receive securities that are subordinated to
at least the same extent as the Convertible Subordinated Notes to (a) Senior
Debt and (b) any securities issued in exchange for Senior Debt), as their
interests may appear.
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SECTION 11.3 DEFAULT ON SENIOR DEBT AND/OR DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution to the Trustee or
any holder of Convertible Subordinated Notes in respect of Obligations with
respect to the Convertible Subordinated Notes and may not acquire from the
Trustee or any holder of Convertible Subordinated Notes any Convertible
Subordinated Notes (other than, in each case, (i) distributions of securities
that are subordinated to at least the same extent as the Convertible
Subordinated Notes to (a) Senior Debt and (b) any securities issued in exchange
for Senior Debt and (ii) payments and other distributions made from any trust
created pursuant to Section 8.1 hereof) until all Senior Debt has been paid in
full in cash or other payment satisfactory to the holders of the Senior Debt if:
(i) a default in the payment of any principal of, premium, if
any, interest, rent or other Obligations in respect of Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement, indenture or
other document governing such Senior Debt; or
(ii) a default, other than a payment default, on Designated
Senior Debt occurs and is continuing that then permits holders of such
Designated Senior Debt to accelerate its maturity and the Trustee receives a
notice of the default (a "Payment Blockage Notice") from a person who may give
it pursuant to Section 11.11 hereof.
If the Trustee receives any Payment Blockage Notice pursuant to Section
11.3 (ii) hereof, no subsequent Payment Blockage Notice shall be effective for
purposes of such Section unless and until at least 365 days shall have elapsed
since the effectiveness of the immediately prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in respect
of the Convertible Subordinated Notes and may acquire them upon the earlier of:
(1) in the case of a payment default, upon the date upon which
the default is cured or waived or ceases to exist, or
(2) in the case of a nonpayment default referred to in
Section 11.3(ii) hereof, the earlier of the date upon which the default is
cured or waived ceases to exist or 179 days after the date on which the
Payment Blockage Notice is received if the maturity of such Designated Senior
Debt has not been accelerated,
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if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 11.4 ACCELERATION OF CONVERTIBLE SUBORDINATED NOTES.
In the event of the acceleration of the Convertible Subordinated Notes
because of an Event of Default, the Company may not make any payment or
distribution to the Trustee or any holder of Convertible Subordinated Notes in
respect of Obligations with respect to Convertible Subordinated Notes and may
not acquire or purchase from the Trustee or any holder of Convertible
Subordinated Notes any Convertible Subordinated Notes (other than, in each case,
(i) distributions of securities that are subordinated to at least the same
extent as the Convertible Subordinated Notes to (a) Senior Debt and (b) any
securities issued in exchange for Senior Debt, and (ii) payments and other
distributions made from any trust created pursuant to Section 8) until all
Senior Debt has been paid in full in cash or other payment satisfactory to the
holders of Senior Debt or such acceleration is rescinded in accordance with the
terms of this Indenture.
If payment of the Convertible Subordinated Notes is accelerated because
of an Event of Default, the Company or the Trustee shall promptly notify holders
of Senior Debt or trustee(s) of such Senior Debt of the acceleration. The
Company may not pay the Convertible Subordinated Notes until five business days
after such holders or trustee(s) of Senior Debt receive notice of such
acceleration and, thereafter, may pay the Convertible Subordinated Notes only if
the provisions of this Article 11 otherwise permit payment at that time.
SECTION 11.5 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee, any holder of Convertible Subordinated
Notes or any other person receives any payment or distributions of assets of the
Company of any kind with respect to the Convertible Subordinated Notes in
contravention of any terms contained in this Indenture, whether in cash,
property or securities, including, without limitation, by way of set-off or
otherwise, then such payment shall be held by the recipient in trust for the
benefit of holders of Senior Debt, and shall be immediately paid over and
delivered to the holders of Senior Debt or their representative(s), to the
extent necessary to make payment in full of all Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution or provision
therefor, to or for the holders of Senior Debt; PROVIDED that the foregoing
shall apply to the Trustee only if the Trustee has actual knowledge (as
determined in accordance with Section 11.11) that such payment or distribution
is prohibited by this Indenture.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the
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Trustee as are specifically set forth in this Article 11, and no implied
covenants or obligations with respect to the holders of Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not
be liable to any such holders if the Trustee shall pay over or distribute to
or on behalf of holders of Convertible Subordinated Notes or the Company or
any other person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 11, except if such payment is made as a
result of the wilful misconduct or gross negligence of the Trustee.
SECTION 11.6 NOTICE BY COMPANY.
The Company shall promptly notify the Trustee of any facts known to the
Company that would cause a payment of any Obligations with respect to the
Convertible Subordinated Notes or the purchase of any Convertible Subordinated
Notes by the Company to violate this Article, but failure to give such notice
shall not affect the subordination of the Convertible Subordinated Notes to the
Senior Debt as provided in this Article.
SECTION 11.7 SUBROGATION.
After all Senior Debt is paid in full and until the Convertible
Subordinated Notes are paid in full, holders of Convertible Subordinated Notes
shall be subrogated (equally and ratably with all other indebtedness pari passu
with the Convertible Subordinated Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the holders of Convertible Subordinated Notes
have been applied to the payment of Senior Debt. A distribution made under this
Article to holders of Senior Debt that otherwise would have been made to holders
of Convertible Subordinated Notes is not, as between the Company and holders of
Convertible Subordinated Notes, a payment by the Company on the Convertible
Subordinated Notes.
SECTION 11.8 RELATIVE RIGHTS.
This Article defines the relative rights of holders of Convertible
Subordinated Notes and holders of Senior Debt. Nothing in this Indenture
shall:
(1) impair, as between the Company and holders of Convertible
Subordinated Notes, the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any, and interest on the
Convertible Subordinated Notes in accordance with their terms;
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(2) affect the relative rights of holders of Convertible
Subordinated Notes and creditors (other than with respect to Senior Debt) of the
Company, other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any holder of Convertible
Subordinated Notes from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and owners of Senior Debt to
receive distributions and payments otherwise payable to holders of Convertible
Subordinated Notes.
If the Company fails because of this Article to pay principal of or
interest on a Convertible Subordinated Note on the due date, the failure is
still a Default or Event of Default.
SECTION 11.9 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Convertible Subordinated Notes shall be impaired
by any act or failure to act by the Company or any holder of Convertible
Subordinated Notes or by the failure of the Company or any such holder to comply
with this Indenture.
SECTION 11.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee and the holders of Convertible Subordinated Notes
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the holders of Convertible Subordinated Notes for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 11.
SECTION 11.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 11 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee (other than pursuant to Section 11.4), and the
Trustee may continue to make payments on the Convertible
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Subordinated Notes, unless a Trust Officer shall have received at least two
business days prior to the date of such payment or distribution written
notice of facts that would cause such payment or distribution with respect to
the Convertible Subordinated Notes to violate this Article. Only the Company
or a Representative may give the notice.
Nothing in this Article 11 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
SECTION 11.12 AUTHORIZATION TO EFFECT SUBORDINATION.
Each holder of a Convertible Subordinated Note by the holder's acceptance
thereof authorizes and directs the Trustee on the holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 11, and appoints the Trustee to act as the holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.9 hereof at least 30 days before the expiration of the
time to file such claim, the holders of any Senior Debt or their Representatives
are hereby authorized to file an appropriate claim for and on behalf of the
holders of the Convertible Subordinated Notes.
SECTION 11.13 ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that the second and third paragraphs of Section 11.11 shall not apply
to the Company or any Subsidiary of the Company if it or such Subsidiary acts as
Paying Agent.
SECTION 11.14 SENIOR DEBT ENTITLED TO RELY.
The holders of Senior Debt shall have the right to rely upon this Article
11, and no amendment or modification of the provisions contained herein shall
diminish the rights of such holders unless such holders shall have agreed in
writing thereto.
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ARTICLE 12
CONVERSION OF CONVERTIBLE SUBORDINATED NOTES
SECTION 12.1 RIGHT TO CONVERT.
Subject to and upon compliance with the provisions of this Indenture,
each holder of Convertible Subordinated Notes shall have the right, at his or
her option, at any time on or before the close of business on the last trading
day prior to the Maturity Date (except that, (a) with respect to any Convertible
Subordinated Note or portion thereof which is called for redemption prior to
such date, such right shall terminate, except as provided in the fourth
paragraph of Section 12.2, at the close of business on the last trading day
preceding the date fixed for redemption (unless the Company defaults in payment
of the redemption price in which case the conversion right will terminate at the
close of business on the date such default is cured) and (b) with respect to any
Convertible Subordinated Note or portion thereof subject to a duly completed
election for repurchase, such right shall terminate on or before the close of
business on the Designated Event Offer Termination Date (unless the Company
defaults in the payment due upon repurchase or such holder elects to withdraw
the submission of such election to repurchase)) to convert the principal amount
of any Convertible Subordinated Note held by such holder, or any portion of such
principal amount which is $50 or an integral multiple thereof, into that number
of fully paid and non-assessable shares of Common Stock (as such shares shall
then be constituted) obtained by dividing the principal amount of the
Convertible Subordinated Note or portion thereof to be converted by the
Conversion Price in effect at such time, by surrender of the Convertible
Subordinated Note so to be converted in whole or in part in the manner provided
in Section 12.2. A holder of Convertible Subordinated Notes is not entitled to
any rights of a holder of Common Stock until such holder of Convertible
Subordinated Notes has converted his or her Convertible Subordinated Notes to
Common Stock, and only to the extent such Convertible Subordinated Notes are
deemed to have been converted to Common Stock under this Article 12.
SECTION 12.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.
To exercise, in whole or in part, the conversion privilege with respect
to any Convertible Subordinated Note, the holder of such Convertible
Subordinated Note shall surrender such Convertible Subordinated Note, duly
endorsed, at an office or agency maintained by the Company pursuant to Section
4.4, accompanied by the funds, if any, required by the penultimate paragraph of
this Section 12.2, and shall give written notice of conversion in the form
provided on the
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Convertible Subordinated Notes (or such other notice which is acceptable to
the Company) to the office or agency that the holder of Convertible
Subordinated Notes elects to convert such Convertible Subordinated Note or
such portion thereof specified in said notice. Such notice shall also state
the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which are issuable on such conversion
shall be issued, and shall be accompanied by transfer taxes, if required
pursuant to Section 12.7. Each such Convertible Subordinated Note
surrendered for conversion shall, unless the shares issuable on conversion
are to be issued in the same name as the registration of such Convertible
Subordinated Note, be duly endorsed by, or be accompanied by instruments of
transfer in form satisfactory to the Company duly executed by, the holder of
Convertible Subordinated Notes or his or her duly authorized attorney. The
holder of such Convertible Subordinated Notes will not be required to pay any
tax or duty which may be payable in respect of the issue or delivery of
Common Stock on conversion, but will be required to pay any tax or duty which
may be payable in respect of any transfer involved in the issue or delivery
of Common Stock in a name other than the same name as the registration of
such Convertible Subordinated Note.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, the Company shall issue and shall deliver to such
holder at the office or agency maintained by the Company for such purpose
pursuant to Section 4.4, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Convertible
Subordinated Note or portion thereof in accordance with the provisions of this
Article 12 and a check or cash in respect of any fractional interest in respect
of a share of Common Stock arising upon such conversion, as provided in Section
12.3 (which payment, if any, shall be paid no later than five business days
after satisfaction of the requirements for conversion set forth above).
Certificates representing shares of Common Stock will not be issued or delivered
unless all taxes and duties, if any, payable by the holder have been paid. In
case any Convertible Subordinated Note of a denomination of an integral multiple
greater than $50 is surrendered for partial conversion, and subject to Section
2.2, the Company shall execute, and the Trustee shall authenticate and deliver
to the holder of the Convertible Subordinated Note so surrendered, without
charge to him or her, a new Convertible Subordinated Note or Convertible
Subordinated Notes in authorized denominations in an aggregate principal amount
equal to the unconverted portion of the surrendered Convertible Subordinated
Note.
Each conversion shall be deemed to have been effected as to any such
Convertible Subordinated Note (or portion thereof) on the date on which the
requirements set forth above in this
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Section 12.2 have been satisfied as to such Convertible Subordinated Note (or
portion thereof), and the person in whose name any certificate or
certificates for shares of Common Stock are issuable upon such conversion
shall be deemed to have become on said date the holder of record of the
shares represented thereby; PROVIDED, HOWEVER, that any such surrender on any
date when the Company's stock transfer books are closed shall constitute the
person in whose name the certificates are to be issued as the record holder
thereof for all purposes on the next succeeding day on which such stock
transfer books are open, but such conversion shall be at the Conversion Price
in effect on the date upon which such Convertible Subordinated Note is
surrendered.
Any Convertible Subordinated Note or portion thereof surrendered for
conversion during the period from the close of business on the record date for
any interest payment through the close of business on the last trading day
immediately preceding such interest payment date shall (unless such Convertible
Subordinated Note or portion thereof being converted has been called for
redemption pursuant to a notice of redemption mailed by the Company to the
holders in accordance with the provisions of Section 3.4) be accompanied by
payment, in funds acceptable to the Company, of an amount equal to the interest
otherwise payable on such interest payment date on the principal amount being
converted; PROVIDED HOWEVER, that no such payment need be made if there exists
at the time of conversion a default in the payment of interest on the
Convertible Subordinated Notes. An amount equal to such payment shall be paid
by the Company on such interest payment date to the holder of such Convertible
Subordinated Note at the close of business on such record date; PROVIDED,
HOWEVER, that if the Company defaults in the payment of interest on such
interest payment date, such amount shall be paid to the person who made such
required payment. Except as provided above in this Section 12.2, no adjustment
shall be made for interest accrued on any Convertible Subordinated Note
converted or for dividends on any shares issued upon the conversion of such
Convertible Subordinated Note as provided in this Article 12.
SECTION 12.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Convertible Subordinated Notes. If
more than one Convertible Subordinated Note shall be surrendered for conversion
at one time by the same holder, the number of full shares which shall be
issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Convertible Subordinated Notes (or specified portions
thereof to the extent permitted hereby) so surrendered for conversion. If any
fractional share of stock otherwise would be issuable upon the conversion of any
Convertible Subordinated Note or
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Convertible Subordinated Notes, the Company shall pay a cash adjustment
therefor in an amount equal to the Current Market Price of the Common Stock
on the last trading day prior to the date of conversion.
SECTION 12.4 CONVERSION PRICE.
The conversion price shall be as specified in the form of Convertible
Subordinated Note attached as EXHIBIT A hereto, subject to adjustment as
provided in this Article 12.
SECTION 12.5 ADJUSTMENT OF CONVERSION PRICE.
The Conversion Price shall be adjusted from time to time by the Company
as follows:
(a) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the Record Date
(as defined in Section 12.5(h)) fixed for such determination and the denominator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
Record Date. If any dividend or distribution of the type described in this
Section 12.5(a) is declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(b) If the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, if the outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(c) If the Company shall issue rights or warrants to all or
substantially all holders of its outstanding shares of Common Stock entitling
them to subscribe for or purchase
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shares of Common Stock at a price per share less than the Current Market
Price (as defined in Section 12.5(h)) on the Record Date fixed for the
determination of shareholders entitled to receive such rights or warrants,
the Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect at the opening of
business on the date after such Record Date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the Record Date plus the number of shares which the
aggregate offering price of the total number of shares so offered would
purchase at such Current Market Price, and of which the denominator shall be
the number of shares of Common Stock outstanding on the close of business on
the Record Date plus the total number of additional shares of Common Stock so
offered for subscription or purchase. Such adjustment shall become effective
immediately after the opening of business on the day following the Record
Date fixed for determination of shareholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not delivered
pursuant to such rights or warrants, upon the expiration or termination of
such rights or warrants the Conversion Price shall be readjusted to be the
Conversion Price which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. If such rights
or warrants are not so issued, the Conversion Price shall again be adjusted
to be the Conversion Price which would then be in effect if such date fixed
for the determination of 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 Current Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into
account any consideration received for such rights or warrants, with the
value of such consideration, if other than cash, to be determined by the
Board of Directors.
(d) If the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 12.5(a)
applies) or evidences of its indebtedness, cash or other assets (including
securities, but excluding (i) any rights or warrants of a type referred to in
Section 12.5(c) and (ii) dividends and distributions paid exclusively in cash)
(the foregoing hereinafter in this Section 12.5(d) called the "Securities"),
then, in each such case, the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Record Date (as defined
in Section 12.5(h)) with respect to such distribution by a fraction of which the
numerator shall be the
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Current Market Price (determined as provided in Section 12.5(h)) on such date
less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board
of Directors) on such date of the portion of the Securities so distributed
applicable to one share of Common Stock and the denominator shall be such
Current Market Price, such reduction to become effective immediately prior to
the opening of business on the day following the Record Date; PROVIDED,
HOWEVER, that in the event the then fair market value (as so determined) of
the portion of the Securities so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of Convertible Subordinated Notes shall have the
right to receive upon conversion of a Convertible Subordinated Note (or any
portion thereof) the amount of Securities such holder would have received had
such holder converted such Convertible Subordinated Note (or portion thereof)
immediately prior to such Record Date. If such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
fair market value of any distribution for purposes of this Section 12.5(d) by
reference to the actual or when issued trading market for any securities
comprising all or part of such distribution, it must in doing so consider the
prices in such market over the same period used in computing the Current
Market Price pursuant to Section 12.5(h) to the extent possible.
Notwithstanding any other provision of this Section 12.5(d) to the
contrary, rights, warrants, evidences of indebtedness, other securities, cash or
other assets (including, without limitation, any rights distributed pursuant to
any shareholder rights plan) shall be deemed not to have been distributed for
purposes of this Section 12.5(d) if the Company makes proper provision so that
each holder of Convertible Subordinated Notes who converts a Convertible
Subordinated Note (or any portion thereof) after the date fixed for
determination of shareholders entitled to receive such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the amount and kind of such distributions
that such holder would have been entitled to receive if such holder had,
immediately prior to such determination date, converted such Convertible
Subordinated Note into Common Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
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rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of
Common Stock; (ii) are not exercisable; and (iii) are also issued in respect
of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 12.5(d) (and no adjustment to the
Conversion Price under this Section 12.5(d) shall be required) until the
occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment to the
Conversion Price under this Section 12.5(d) shall be made. If any such
rights or warrants, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to subsequent
events, upon the occurrence of each of which such rights or warrants shall
become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the occurrence of each such event shall be
deemed to be such date of issuance and record date with respect to new rights
or warrants (and a termination or expiration of the existing rights or
warrants without exercise by the holder thereof). In addition, in the event
of any distribution (or deemed distribution) of rights or warrants, or any
Trigger Event with respect thereto, that was counted for purposes of
calculating a distribution amount for which an adjustment to the Conversion
Price under this Section 12.5 was made, (1) in the case of any such rights or
warrants which shall all have been redeemed or repurchased without exercise
by any holders thereof, the Conversion Price shall be readjusted upon such
final redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to
the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as
of the date of such redemption or repurchase, and (2) in the case of such
rights or warrants which shall have expired or been terminated without
exercise by any holders thereof, the Conversion Price shall be readjusted as
if such rights and warrants had not been issued.
For purposes of this Section 12.5(d) and Sections 12.5(a) and (c), any
dividend or distribution to which this Section 12.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock to which Section 12.5(c) applies (or both),
shall be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets, shares of capital stock, rights or warrants other than
such shares of Common Stock or rights or warrants to which Section 12.5(c)
applies (and any Conversion Price reduction required by this Section 12.5(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or
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warrants (and any further Conversion Price reduction required by
Sections 12.5(a) and (c) with respect to such dividend or distribution shall
then be made, except that (A) the Record Date of such dividend or distribution
shall be substituted as "the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution", "Record Date fixed for
such determination" and "Record Date" within the meaning of Section 12.5(a) and
as "the date fixed for the determination of shareholders entitled to receive
such rights or warrants", "the Record Date fixed for the determination of the
shareholders entitled to receive such rights or warrants" and "such Record Date"
within the meaning of Section 12.5(c) and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed "outstanding at
the close of business on the date fixed for such determination" within the
meaning of Section 12.5(a)).
(e) If the Company shall, by dividend or otherwise, distribute
cash to all holders of its Common Stock (excluding any cash that is distributed
upon a merger or consolidation to which Section 12.6 applies or as part of a
distribution referred to in Section 12.5(d)) in an aggregate amount that,
combined together with (1) the aggregate amount of any other such all-cash
distributions to all holders of its Common Stock within the 12 months preceding
the date of payment of such distribution, and in respect of which no adjustment
pursuant to this Section 12.5(e) has been made, and (2) the aggregate of any
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) of consideration payable in respect of any tender offer by the
Company or any of its Subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section 12.5(f)
has been made, exceeds 10% of an amount equal to the Current Market Price
(determined as provided in Section 12.5(h)) on the Record Date with respect to
such distribution multiplied by the number of shares of Common Stock outstanding
on such date, then, and in each such case, immediately after the close of
business on such date, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on such Record Date by a fraction
(i) the numerator of which shall be equal to the Current Market Price on the
Record Date less an amount equal to the quotient of (x) the excess of such
combined amount over such 10% and (y) the number of shares of Common Stock
outstanding on the Record Date and (ii) the denominator of which shall be equal
to the Current Market Price on such Record Date; PROVIDED, HOWEVER, that if the
portion of the cash so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall
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be made so that each holder of Convertible Subordinated Notes shall have the
right to receive upon conversion of a Convertible Subordinated Note (or any
portion thereof) the amount of cash such holder would have received had such
holder converted such Convertible Subordinated Note (or portion thereof)
immediately prior to such Record Date. If such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared. Any cash distribution to all holders of
Common Stock as to which the Company makes the election permitted by Section
12.5(n) and as to which the Company has complied with the requirements of
such Section shall be treated as not having been made for all purposes of
this Section 12.5(e).
(f) If a tender offer made by the Company or any of its
Subsidiaries for all or any portion of the Common Stock expires and such
tender offer (as amended upon the expiration thereof) requires the payment to
shareholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in
a resolution of the Board of Directors) that, combined together with (1) the
aggregate of the cash plus the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors), as of the expiration of such tender
offer, of consideration payable in respect of any other tender offers, by the
Company or any of its Subsidiaries for all or any portion of the Common
Stock, expiring within the 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to this Section 12.5(f)
has been made and (2) the aggregate amount of any such all-cash distributions
to all holders of the Common Stock within 12 months preceding the expiration
of such tender offer and in respect of which no adjustment pursuant to
Section 12.5(e) has been made, exceeds 10% of an amount equal to the Current
Market Price (determined as provided in Section 12.5(h)) as of the last time
(the "Expiration Time") tenders could have been made pursuant to such tender
offer (as it may be amended) multiplied by the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business on
the day after the date of the Expiration Time, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to close of business on the date
of the Expiration Time by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time multiplied by the Current Market Price of the Common
Stock on the trading day
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next succeeding the Expiration Time and the denominator shall be the sum of
(x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to any
maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) an amount equal to the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time multiplied by
the Current Market Price of the Common Stock on the trading day next
succeeding the Expiration Time, such reduction (if any) to become effective
immediately prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares pursuant to
any such tender offer, but the Company is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such tender offer had not been made. If the
application of this Section 12.5(f) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 12.5(f).
(g) If the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per share (or, as
applicable, having a conversion or exchange price per share) that is less than
the Current Market Price (determined as provided in Section 12.5(h)) determined
at the time of such issuance, the Conversion Price shall be adjusted so that the
holder of each Convertible Note shall be entitled to receive, upon the
conversion thereof, the number of shares of Common Stock determined by
multiplying (i) the Conversion Price on the date (the "Measurement Date")
immediately prior to the day of such issuance by (ii) a fraction, the numerator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding on the Measurement Date day and (2) the number of shares of Common
Stock which the aggregate consideration receivable by the Company for the total
number of shares of Common Stock so issued (or into which the convertible
securities may convert) would purchase at such Conversion Price on the
Measurement Date, and the denominator of which shall be the sum of (x) the
number of shares of Common Stock outstanding on the Measurement Date and (y) the
number of additional shares of Common Stock so issued (or into which the
convertible securities may convert). An adjustment made pursuant to this
Section 12.5 (g) shall be made on the next business day following the day on
which any such issuance is made and shall be effective retroactively to the day
of such issuance immediately after the close of business on such date. For
purposes of this Section 12.5 (g), the aggregate consideration receivable by the
Company in connection with the issuance of
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shares of Common Stock or of securities convertible into shares of Common
Stock shall be deemed to be equal to the sum of the aggregate offering price
(before deduction of underwriting discounts or commissions and expenses
payable to third parties) of all such securities plus the minimum aggregate
amount, if any, payable upon conversion of any such convertible securities
into shares of Common Stock; PROVIDED, HOWEVER, that any non-cash
consideration received or receivable by the Company shall be valued at its
fair market value as of the date of the adjustment made pursuant to this
Section 12.5(g), such fair market value to be as determined in good faith by
the Company's board of directors.
Notwithstanding any other provision of this Section 12.5(g) to the
contrary, the following shall be deemed not to have been issued for purposes
of this Section 12.5(g): (A) issuances pursuant to any bona fide plan for
the benefit of employees, directors or consultants of the Company or any
Subsidiary in effect on the date of the Indenture or thereafter, (B)
issuances to acquire all or any portion of a business in an arm's-length
transaction between the Company and an unaffiliated third party including, if
applicable, issuances upon exercise of options or warrants assumed in
connection with such an acquisition, (C) issuances in a bona fide public
offering pursuant to a firm commitment underwriting (or similar type of
offering made pursuant to Rule 144A and/or Regulation S under the Securities
Act) or sales at the market pursuant to a continuous offering stock program,
(D) issuances pursuant to the exercise of warrants, rights (including,
without limitation, earnout rights) or options, or upon the conversion of
convertible securities, which are issued and outstanding on the date of this
Indenture, or which may be issued in the future at fair value and with an
exercise price or conversion price at least equal to the Current Market Price
(determined as provided in Section 12.5(h)) at the time of issuance of such
warrant, right, option or convertible security, (E) issuances pursuant to a
dividend reinvestment plan or other plan hereafter adopted for the
reinvestment of dividends or interest, PROVIDED that such Common Stock is
issued at a price at least equal to 95% of the Current Market Price
(determined as provided in Section 12.5(h)) determined at the time of such
issuance, and (f) issuances to which Section 12.5(a), (c) or (d) applies.
(h) For purposes of this Section 12.5, the following terms
shall have the meaning indicated:
(1) "closing price" with respect to any securities on
any day means the closing price on such day or, if no such sale takes place on
such day, the average of the reported high and low prices on such day, in each
case on the Nasdaq National Market or New York Stock Exchange, as applicable,
or, if such security is not listed or admitted to trading on such national
market or exchange, on the principal
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national securities exchange or quotation system on which such security is
quoted or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation system,
the average of the high and low prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or, if not so available, in such manner as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose, or a price determined in good faith by the Board
of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors.
(2) "Current Market Price" means the average of the
daily closing prices per share of Common Stock for the 10 consecutive trading
days immediately prior to the date in question; PROVIDED, HOWEVER, that (1) if
the "ex" date (as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Sections 12.5(a), (b), (c), (d), (e), (f) or (g)
occurs during such 10 consecutive trading days, the closing price for each
trading day prior to the "ex" date for such other event shall be adjusted by
multiplying such closing price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, (2) if the
"ex" date for any event (other than the issuance or distribution requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 12.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the "ex" date
for the issuance or distribution requiring such computation and prior to the day
in question, the closing price for each trading day on and after the "ex" date
for such other event shall be adjusted by multiplying such closing price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, and (3) if the "ex" date for the
issuance or distribution requiring such computation is prior to the day in
question, after taking into account any adjustment required pursuant to clause
(1) or (2) of this proviso, the closing price for each trading day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash and
the fair market value (as determined by the Board of Directors in a manner
consistent with any determination of such value for purposes of Sections 12.5(d)
or (f), whose determination shall be conclusive and described in a resolution of
the Board of Directors) of the evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common Stock as of
the close of business on the day before such "ex" date. For purposes of any
computation under Section 12.5(f), the Current Market Price on any date shall be
deemed to be the average of the daily closing prices per share of Common Stock
for such day and the next two succeeding trading days; PROVIDED,
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HOWEVER, that if the "ex" date for any event (other than the tender offer
requiring such computation) that requires an adjustment to the Conversion
Price pursuant to Section 12.5(a), (b), (c), (d), (e), (f) or (g) occurs on
or after the Expiration Time for the tender or exchange offer requiring such
computation and prior to the day in question, the closing price for each
trading day on and after the "ex" date for such other event shall be adjusted
by multiplying such Closing Price by the reciprocal of the fraction by which
the Conversion Price is so required to be adjusted as a result of such other
event. For purposes of this paragraph, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the closing price was obtained without the right
to receive such issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective,
and (3) when used with respect to any tender or exchange offer means the
first date on which the Common Stock trades regular way on such exchange or
in such market after the Expiration Time of such offer. Notwithstanding the
foregoing, whenever successive adjustments to the Conversion Price are called
for pursuant to this Section 12.5, such adjustments shall be made to the
Current Market Price as may be necessary or appropriate to effectuate the
intent of this Section 12.5 and to avoid unjust or inequitable results as
determined in good faith by the Board of Directors.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of
Common Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other property, the date
fixed for determination of 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).
(5) "trading day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York Stock Exchange or
another national securities exchange, a day on which the New York Stock Exchange
or such other national securities exchange is open for business or (y) if the
applicable security is quoted on the Nasdaq National Market, a day on which
trades may be made thereon or (z) if the applicable security is not so listed,
admitted for
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trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law or executive order to close.
(i) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 12.5(a), (b), (c), (d), (e),
(f) and (g), as the Board of Directors considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or rights
to acquire stock) or from any event treated as such for income tax purposes.
The Company from time to time may, to the extent permitted by law,
reduce the Conversion Price by any amount for any period of at least 20 days,
if the Board of Directors has made a determination that such reduction would
be in the Company's best interests, which determination shall be conclusive
and described in a resolution of the Board of Directors. The reduction in
Conversion Price shall be irrevocable during this period. Whenever the
Conversion Price is reduced pursuant to the preceding sentence, the Company
shall mail to the holders of Convertible Subordinated Notes at his or her
last address appearing on the Register of holders maintained for that purpose
a notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1%
in such price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 12.5(j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article 12 shall be made by the Company and shall be made to the nearest cent
or to the nearest one hundredth of a share, as the case may be.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
(k) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any Conversion
Agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of Convertible Subordinated
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Notes at his or her last address appearing on the Register of holders
maintained for that purpose within 20 days of the effective date of such
adjustment. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(l) In any case in which this Section 12.5 provides that an
adjustment shall become effective immediately after a Record Date for an
event, the Company may defer until the occurrence of such event issuing to
the holder of any Convertible Subordinated Note converted after such Record
Date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by
such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment.
(m) For purposes of this Section 12.5, the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(n) In lieu of making any adjustment to the Conversion Price
pursuant to Section 12.5(e), the Company may elect to reserve an amount of
cash for distribution to the holders of Convertible Subordinated Notes upon
the conversion of the Convertible Subordinated Notes so that any such holder
converting Convertible Subordinated Notes will receive upon such conversion,
in addition to the shares of Common Stock and other items to which such
holder is entitled, the full amount of cash which such holder would have
received if such holder had, immediately prior to the Record Date for such
distribution of cash, converted its Convertible Subordinated Notes into
Common Stock, together with any interest accrued with respect to such amount,
in accordance with this Section 12.5(n). The Company may make such election
by providing an Officers' Certificate to the Trustee to such effect on or
prior to the payment date for any such distribution and depositing with the
Trustee on or prior to such date an amount of cash equal to the aggregate
amount that the holders of Convertible Subordinated Notes would have received
if such holders had,
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immediately prior to the Record Date for such distribution, converted all of
the Convertible Subordinated Notes into Common Stock. Any such funds so
deposited by the Company with the Trustee shall be invested by the Trustee in
U.S. Government Obligations with a maturity not more than three (3) months
from the date of issuance. Upon conversion of Convertible Subordinated Notes
by a holder thereof, such holder shall be entitled to receive, in addition to
the Common Stock issuable upon conversion, an amount of cash equal to the
amount such holder would have received if such holder had, immediately prior
to the Record Date for such distribution, converted its Convertible
Subordinated Note into Common Stock, along with such holder's pro-rata share
of any accrued interest earned as a consequence of the investment of such
funds. Promptly after making an election pursuant to this Section 12.5(n),
the Company shall give or shall cause the Trustee to give notice to all
holders of Convertible Subordinated Notes of such election, which notice
shall state the amount of cash per $50 principal amount of Convertible
Subordinated Notes such holders shall be entitled to receive (excluding
interest) upon conversion of the Convertible Subordinated Notes as a
consequence of the Company having made such election.
SECTION 12.6 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur: (i) any reclassification or
change of the outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), (ii) any consolidation,
merger or combination of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities
or other property or assets (including cash) with respect to or in exchange
for such Common Stock, or (iii) any sale or conveyance of the properties and
assets of the Company as an entirety or substantially as an entirety to any
other person as a result of which holders of Common Stock shall be entitled
to receive stock, other securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company
or the successor or purchasing person, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the TIA as in
force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that the
Convertible Subordinated Notes shall be convertible into the kind and amount
of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of the Convertible Subordinated Notes
(assuming, for such purposes, a sufficient number of authorized shares of
Common Stock available to convert all such Convertible Subordinated Notes)
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise his or her rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance (PROVIDED that, if the kind or
amount of securities, cash or other property receivable upon such
consolidation, merger,
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statutory exchange, sale or conveyance is not the same for each share of
Common Stock in respect of which such rights of election have not been
exercised ("non-electing share"), then, for the purposes of this Section
12.6, the kind and amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or conveyance for
each non-electing share 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 12. If, in the case of any such reclassification, change,
consolidation, merger, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of shares of Common
Stock includes shares of stock or other securities and assets of a person
other than the successor or purchasing person, as the case may be, in such
reclassification, change, consolidation, merger, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other person and shall contain such additional provisions to protect the
interests of the holders of the Convertible Subordinated Notes as the Board
of Directors shall reasonably consider necessary by reason of the foregoing.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Convertible Subordinated Notes at
his or her address appearing on the Register of holders for that purpose
within 20 days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
The above provisions of this Section 12.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 12.6 applies to any event or occurrence, Section 12.5
shall not apply.
SECTION 12.7 TAXES ON SHARES ISSUED.
The issue of stock certificates on conversions of Convertible
Subordinated Notes shall be made without charge to the converting holder for any
tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Convertible Subordinated Note converted, and the Company shall not be
required to issue or deliver any such stock certificate unless and until the
person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
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SECTION 12.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; LISTING OF COMMON
STOCK.
The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares to
provide for the conversion of the Convertible Subordinated Notes from time to
time as such Convertible Subordinated Notes are presented for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Convertible Subordinated Notes, the Company
shall take all corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue shares of such
Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of Common Stock issued upon
conversion of Convertible Subordinated Notes will be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company further covenants that as long as the Common Stock is quoted
on the Nasdaq National Market, or its successor, the Company shall cause all
Common Stock issuable upon conversion of the Convertible Subordinated Notes to
be eligible for such quotation in accordance with, and at the times required
under, the requirements of such market, and if at any time the Common Stock
becomes listed on the New York Stock Exchange or any other national securities
exchange, the Company shall cause all Common Stock issuable upon conversion of
the Convertible Subordinated Notes to be so listed and kept listed.
SECTION 12.9 RESPONSIBILITY OF TRUSTEE.
The Trustee shall not at any time be under any duty of responsibility to
any holders of Convertible Subordinated Notes to determine whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Convertible Subordinated Note;
and the Trustee makes no representations with respect thereto. Subject to the
provisions of Section 7.1, the Trustee shall not be responsible for any failure
of the Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or
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other securities or property or cash upon the surrender of any Convertible
Subordinated Note for the purpose of conversion or to comply with any of the
duties, responsibilities or covenants of the Company contained in this
Article 12. Without limiting the generality of the foregoing, the Trustee
shall not have any responsibility to determine the correctness of any
provisions contained in any supplemental indenture entered into pursuant to
Section 12.6 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by holders of Convertible
Subordinated Notes upon the conversion of their Convertible Subordinated
Notes after any event referred to in such Section 12.6 or to any adjustment
to be made with respect thereto, but, subject to the provisions of Section
7.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
and Opinion of Counsel (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with
respect thereto.
SECTION 12.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.
If
(a) the Company declares a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings or other
than a dividend that results in an adjustment in the Conversion Price
pursuant to Section 12.5 as to which the Company has made an election in
accordance with Section 12.5(n)); or
(b) the Company authorizes the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class of Common Stock or any other rights or warrants; or
(c) there is any reclassification of the Common Stock (other
than a subdivision or combination of outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any 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) there is any voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Convertible Subordinated Notes at his or her address appearing on
the Register maintained for that purpose as promptly as possible but in any
event at least 15 days prior to the applicable date hereinafter specified, a
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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.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed and attested, all as of the date first above written, signifying their
agreements contained in this Indenture.
XXXXXXXXXX INDUSTRIES, INC.
By
---------------------------------------
Name:
Title:
U.S. TRUST COMPANY, NATIONAL ASSOCIATION
By
---------------------------------------
Name:
Title:
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EXHIBIT A
(Face of Security)
[The following legend shall appear on the face of each Global Note:
THIS CONVERTIBLE SUBORDINATED NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS CONVERTIBLE
SUBORDINATED NOTE FOR ALL PURPOSES.]
[The following legend shall appear on the face of each Global Note for which The
Depository Trust Company is to be the Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY THE AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OR DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
CONVERTIBLE SUBORDINATED NOTES IN DEFINITIVE REGISTERED FORM IN THE LIMITED
CIRCUMSTANCES REFERRED TO IN THE INDENTURE, THIS GLOBAL NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OR SUCH SUCCESSOR DEPOSITARY.]
No. _____ $___________
CUSIP ________
A-1
XXXXXXXXXX INDUSTRIES, INC.
___% CONVERTIBLE SUBORDINATED NOTE DUE 2008
promises to pay to _________________________ or registered assigns, the
principal sum of ________________ Dollars ($____) on December ___, 2008
Interest Payment Dates: January 15 and July 15, commencing July 15, 1999
Regular Record Dates: January 1 and July 1
Certificate of Authentication:
This is one of the Convertible Subordinated Notes described in the
within-mentioned Indenture.
[Trustee Name], as Trustee XXXXXXXXXX INDUSTRIES, INC.
By By
------------------------------- -----------------------------------
Authorized Signatory Chief Financial Officer
Dated: By
-----------------------------------
Assistant Secretary
(SEAL)
(Back of Security)
A-2
XXXXXXXXXX INDUSTRIES, INC.
___% CONVERTIBLE SUBORDINATED NOTE DUE 2008
1. INTEREST. Xxxxxxxxxx Industries, Inc., an Oregon corporation (the
"Company"), promises to pay interest on the principal amount of this Convertible
Subordinated Note at the rate per annum shown above. The Company will pay
interest semi-annually in arrears on January 15 and July 15 of each year,
beginning July 15, 1999. Interest on the Convertible Subordinated Notes will
accrue from the most recent interest payment date to which interest has been
paid or, if no interest has been paid, from December __ 1998. Interest will be
computed on the basis of a 360-day year composed of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Convertible Subordinated Notes (except defaulted interest) to the person in
whose name each Convertible Subordinated Note is registered at the close of
business on the January 1 or July 1 immediately preceding the relevant interest
payment date (each a "Regular Record Date") (other than with respect to a
Convertible Subordinated Note or portion thereof called for redemption on a
redemption date, or repurchased in connection with a Designated Event on a
repurchase date, during the period from the close of business on a Regular
Record Date to (but excluding) the next succeeding interest payment date, in
which case accrued interest shall be payable (unless such Convertible
Subordinated Note or portion thereof is converted) to the holder of the
Convertible Subordinated Note or portion thereof redeemed or repurchased in
accordance with the applicable redemption or repurchase provisions of the
Indenture). Xxxxxx must surrender Convertible Subordinated Notes to a Paying
Agent to collect principal payments. The Company will pay the principal of,
premium, if any, and interest on the Convertible Subordinated Notes at the
office or agency of the Company maintained for such purpose, in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal, premium, if any, and
interest by check payable in such money, and may mail such check to the holders
of the Convertible Subordinated Notes at their respective addresses as set forth
in the Register of holders of Convertible Subordinated Notes. Until otherwise
designated by the Company, the Company's office or agency maintained for such
purpose will be the principal Corporate Trust Office of the Trustee (as defined
below).
3. PAYING AGENT AND REGISTRAR. [Trustee Name] (together with any
successor Trustee under the Indenture referred to below, the "Trustee"), will
act as Paying Agent and Registrar. The Company may change the Paying Agent,
Registrar or co-registrar without prior notice. Subject to
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certain limitations in the Indenture, the Company or any of its Subsidiaries
may act in any such capacity.
4. INDENTURE. The Company issued the Convertible Subordinated
Notes under an Indenture dated as of December __, 1998 (the "Indenture")
between the Company and the Trustee. The terms of the Convertible
Subordinated Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code Sections 77aaa-77bbbb) (the "TIA") as in effect on the date of the
Indenture. The Convertible Subordinated Notes are subject to, and qualified
by, all such terms, certain of which are summarized hereon, and holders are
referred to the Indenture and the TIA for a statement of such terms. The
Convertible Subordinated Notes are unsecured general obligations of the
Company limited to (except as otherwise provided in the Indenture) up to
$15,000,000 in aggregate principal amount, unless an election has been made
as set forth in Article 2 of the Indenture to increase such aggregate
principal amount by an amount not to exceed $2,250,000. Capitalized terms
not defined below have the same meaning as is given to them in the Indenture.
5. OPTIONAL REDEMPTION. Subject to the limitations on redemption
prior to December __, 2001 (described below), the Convertible Subordinated Notes
may be redeemed by the Company at its option, in whole or from time to time in
part, on not less than 15 nor more than 30 days prior written notice to the
holders thereof by first class mail, at the following redemption prices
(expressed as percentages of principal amount) if redeemed during the 12-month
period beginning December __ of each year indicated, plus accrued and unpaid
interest to the date fixed for redemption:
REDEMPTION
YEAR PRICE
1999............................... 110%
2000............................... 108%
2001............................... 106%
2002............................... 105%
2003............................... 103%
2004............................... 101%
2005............................... 100%
2006............................... 100%
2007............................... 100%
2008............................... 100%
Notwithstanding the foregoing, the Company may redeem the Convertible
Subordinated Notes prior to December __, 2001 only if (i) it redeems all of the
Convertible Subordinated Notes then outstanding, (ii) after the date of this
offering and prior to the redemption, there is completed one or more registered
public offerings of the Company's Common Stock
A-4
pursuant to which the aggregate price to the public of shares sold by the
Company and/or the selling shareholders participating in such offering(s)
equals or exceeds $15 million, and (iii) the closing price of the Common
Stock on the principal stock exchange or market on which the Common Stock is
then quoted or admitted to trading equals or exceeds the following percentage
of the then-effective Conversion Price for at least 30 consecutive trading
days ending on the fifth trading day prior to the date the notice of
redemption is first mailed to the holders of the Convertible Subordinated
Notes:
REDEMPTION PERCENTAGE OF
NOTICE DATE CONVERSION PRICE
Before December __, 1999...................... 117%
On or after December __, 1999
but before December __, 2000............. 137%
On or after December __, 2000
but before December __, 2001............. 163%
Notice of redemption will be mailed by first class mail at least 15
days but not more than 60 days before the date fixed for redemption to each
holder of Convertible Subordinated Notes to be redeemed at his or her
registered address. Convertible Subordinated Notes in denominations larger
than $50 may be redeemed in part but only in integral multiples of $50. If
less than all the Convertible Subordinated Notes are to be redeemed, the
Trustee shall select the Convertible Subordinated Notes to be redeemed, on a
pro rata basis by lot or by such method that the Company shall direct in
writing at least 30 days prior to the applicable redemption date. On and
after the redemption date, interest ceases to accrue on Convertible
Subordinated Notes or portions thereof called for redemption (unless the
Company defaults in the payment of the redemption price). If this Convertible
Subordinated Note is redeemed on a date which is also an Interest Payment
Date, the interest payment due on such date will be paid to the person in
whose name this Convertible Subordinated Note is registered at the close of
business on such record date.
6. DESIGNATED EVENT. Upon a Designated Event, the Company shall
make a Designated Event Offer to repurchase all outstanding Convertible
Subordinated Notes at a price equal to 100% of the aggregate principal amount
of the Convertible Subordinated Notes, plus accrued and unpaid interest to,
but excluding, the date of repurchase, such offer to be made as provided in
the Indenture. To accept the Designated Event Offer, the holder hereof must
comply with the terms thereof, including surrendering this Convertible
Subordinated Note, with the "Option of Holder to Elect Repurchase" portion
hereof completed, to the Company, a depositary, if appointed by the
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Company, or a Paying Agent, at the address specified in the notice of the
Designated Event Offer mailed to holders as provided in the Indenture, prior
to termination of the Designated Event Offer.
7. SUBORDINATION. The Company's payment of the principal of,
premium, if any, and interest on the Convertible Subordinated Notes is
subordinated to the prior payment in full of the Company's Senior Debt as set
forth in the Indenture. Each holder of Convertible Subordinated Notes by his
or her acceptance hereof covenants and agrees that all payments of the
principal of, premium, if any, and interest on the Convertible Subordinated
Notes by the Company shall be subordinated in accordance with the provisions
of Article 11 of the Indenture, and each holder of Convertible Subordinated
Notes accepts and agrees to be bound by such provisions.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Convertible
Subordinated Notes are in registered form without coupons in denominations of
$50 and integral multiples of $50. The transfer of Convertible Subordinated
Notes may be registered and Convertible Subordinated Notes may be exchanged
as provided in the Indenture. As a condition of transfer, the Registrar and
the Trustee may require a holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a holder to
pay any taxes and fees required by law or permitted by the Indenture. The
Company or the Registrar need not exchange or register the transfer of any
Convertible Subordinated Note or portion of a Convertible Subordinated Note
selected for redemption or submitted for repurchase. Also, the Company or
the Registrar need not exchange or register the transfer of any Convertible
Subordinated Note for a period of 15 days before a selection of Convertible
Subordinated Notes to be redeemed.
9. PERSONS DEEMED OWNERS. The registered holder of a Convertible
Subordinated Note may be treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Convertible Subordinated Notes may be amended or
supplemented with the consent of the holders of at least a majority in
principal amount of the then outstanding Convertible Subordinated Notes and
any existing default may be waived with the consent of the holders of a
majority in principal amount of the then outstanding Convertible Subordinated
Notes.
Without the consent of any holder, the Indenture or the Convertible
Subordinated Notes may be amended to: (a) cure any ambiguity or correct or
supplement any defective or inconsistent provision contained in the Indenture,
or make any other changes in the provisions of the Indenture which the Company
and the Trustee may deem necessary or desirable
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PROVIDED such amendment does not adversely affect the legal rights under the
Indenture of the holders of Convertible Subordinated Notes; (b) provide for
uncertificated Convertible Subordinated Notes in addition to or in place of
certificated Convertible Subordinated Notes; (c) evidence the succession of
another person to the Company and providing for the assumption by such
successor of the covenants and obligations of the Company thereunder and in
the Convertible Subordinated Notes as permitted by Section 5.1 of the
Indenture; (d) provide for conversion rights and/or repurchase rights of
holders of Convertible Subordinated Notes in the event of consolidation,
merger or sale of all or substantially all of the assets of the Company as
required to comply with Sections 5.1 and/or 12.6 of the Indenture; (e) reduce
the Conversion Price; (f) make any change that would provide any additional
rights or benefits to the holders of Convertible Subordinated Notes or that
does not adversely affect the legal rights under the Indenture of any such
holder; or (g) comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the TIA.
Without the consent of each holder affected, an amendment or waiver may
not (with respect to any Convertible Subordinated Notes held by a non-consenting
holder): (a) reduce the principal amount of Convertible Subordinated Notes whose
holders must consent to an amendment, supplement or waiver; (b) reduce the
principal of, or premium on, or change the fixed maturity of any Convertible
Subordinated Note or, except as permitted pursuant to clause (a) of the
immediately preceding paragraph, alter the provisions with respect to the
redemption of the Convertible Subordinated Notes; (c) reduce the rate of or
change the time for payment of interest, including defaulted interest, on any
Convertible Subordinated Notes; (d) waive a Default or Event of Default in the
payment of principal of or premium, if any, or interest on the Convertible
Subordinated Notes (except a rescission of acceleration of the Convertible
Subordinated Notes by the holders of at least a majority in aggregate principal
amount of the Convertible Subordinated Notes and a waiver of the payment default
that resulted from such acceleration); (e) make the principal of, or premium, if
any, or interest on, any Convertible Subordinated Note payable in money other
than as provided for in the Indenture and in the Convertible Subordinated Notes;
(f) make any change in the provisions of the Indenture relating to waivers of
past Defaults or the rights of holders of Convertible Subordinated Notes to
receive payments of principal of, premium, if any, or interest on the
Convertible Subordinated Notes; (g) waive a redemption payment with respect to
any Convertible Subordinated Note; (h) make any change in the foregoing
amendment and waiver provisions, or (i) except as permitted by the Indenture
(including Section 9.1(a)), increase the Conversion Price or modify the
provisions of the Indenture relating to conversion of the Convertible
Subordinated Notes in a manner adverse to the
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holders thereof. In addition, any amendment to the provisions of Article 11
of the Indenture (which relate to subordination) will require the consent of
the holders of at least 75% in aggregate principal amount of the Convertible
Subordinated Notes then outstanding if such amendment would adversely affect
the rights of holders of Convertible Subordinated Notes.
11. DEFAULTS AND REMEDIES. An Event of Default is: (a) default in
payment of the principal of, or premium, if any, on the Convertible
Subordinated Notes, when due at maturity, upon repurchase, upon acceleration
or otherwise, whether or not such payment is prohibited by the subordination
provisions of the Indenture; (b) default for 30 days or more in payment of
any installment of interest on the Convertible Subordinated Notes, whether or
not such payment is prohibited by the subordination provisions of the
Indenture; (c) default by the Company for 60 days or more after notice in the
observance or performance of any other covenants in the Indenture; (d)
default in the payment of the Designated Event Payment in respect of the
Convertible Subordinated Notes on the date therefor, whether or not such
payment is prohibited by the subordination provisions of the Indenture; (e)
failure to provide timely notice of a Designated Event; (f) failure of the
Company or any Material Subsidiary to make any payment at maturity, including
any applicable grace period, in respect of indebtedness for borrowed money
of, or guaranteed or assumed by, the Company or any Material Subsidiary which
payment is in an amount in excess of $1,000,000 and continuance of such
failure for 30 days after notice; (g) default by the Company or any Material
Subsidiary with respect to any such indebtedness, which default results in
the acceleration of such indebtedness of an amount in excess of $1,000,000
without such indebtedness having been paid or discharged or such acceleration
having been cured, waived, rescinded, or annulled for 30 days after notice;
or (h) certain events involving bankruptcy, insolvency or reorganization of
the Company or any Material Subsidiary. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the then outstanding Convertible Subordinated Notes may declare the unpaid
principal of, premium, if any, and accrued and unpaid interest on all
Convertible Subordinated Notes then outstanding to be due and payable
immediately, except that in the case of an Event of Default arising from
certain events of bankruptcy, insolvency, or reorganization with respect to
the Company all outstanding Convertible Subordinated Notes become due and
payable without further action or notice. Holders of Convertible
Subordinated Notes may not enforce the Indenture or the Convertible
Subordinated Notes except as provided in the Indenture. The Trustee may
require an indemnity satisfactory to it before it enforces the Indenture or
the Convertible Subordinated Notes. Subject to certain limitations, holders
of a majority in principal amount of the then outstanding Convertible
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Subordinated Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from holders notice of any continuing
default (except a default in payment of principal, premium, if any, or
interest) if it determines that withholding notice is in their interests.
The Company must furnish annual compliance certificates to the Trustee.
12. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee or any of its
Affiliates, in their individual or any other capacities, may make or continue
loans to or guaranteed by, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee or
shareholder, as such, of the Company shall have any liability for any
obligations of the Company under the Convertible Subordinated Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each holder by accepting a Convertible
Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for the Convertible Subordinated Notes.
14. AUTHENTICATION. This Convertible Subordinated Note shall not
be valid until authenticated by the manual signature of the Trustee or an
authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name
of a holder or an assignee, such as: TEN CO = tenants in common, TEN ENT =
tenants by the entireties, JT TEN = joint tenants with right of survivorship
and not as tenants in common, CUST = Custodian and U/G/M/A = Uniform Gifts to
Minors Act.
16. CONVERSION. Subject to and upon compliance with the provisions of
the Indenture, the registered holder of this Convertible Subordinated Note has
the right at any time on or before the close of business on the last trading day
prior to December __, 2008 (or in case this Convertible Subordinated Note or any
portion hereof that is (a) called for redemption prior to such date, before the
close of business on the last trading day preceding the date fixed for
redemption (unless the Company defaults in payment of the redemption price, in
which case the conversion right will terminate at the close of business on the
date such default is cured) or (b) subject to a duly completed election for
repurchase, on or before the close of business on the Designated Event Offer
Termination Date (unless the Company defaults in payment due upon repurchase or
such holder elects to withdraw the submission of such election to repurchase )
to convert the principal amount hereof, or any portion of such principal amount
which is $50 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of common stock of the Company
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("Common Stock") obtained by dividing the principal amount of the Convertible
Subordinated Note or portion thereof to be converted by the conversion price
of $________ per share, as adjusted from time to time as provided in the
Indenture (the "Conversion Price"), upon surrender of this Convertible
Subordinated Note to the Company at the office or agency maintained for such
purpose (and at such other offices or agencies designated for such purpose by
the Company), accompanied by written notice of conversion duly executed (and
if the shares of Common Stock to be issued on conversion are to be issued in
any name other than that of the registered holder of this Convertible
Subordinated Note by instruments of transfer, in form satisfactory to the
Company, duly executed by the registered holder or its duly authorized
attorney) and, in case such surrender shall be made during the period from
the close of business on the Regular Record Date immediately preceding any
Interest Payment Date through the close of business on the last trading day
immediately preceding such Interest Payment Date (unless this Convertible
Subordinated Note or the portion thereof being converted has been called for
redemption on a date in such period), also accompanied by payment, in funds
acceptable to the Company, of an amount equal to the interest otherwise
payable on such Interest Payment Date on the principal amount of this
Convertible Subordinated Note then being converted. Subject to the aforesaid
requirement for a payment in the event of conversion after the close of
business on a Regular Record Date immediately preceding an Interest Payment
Date, no adjustment shall be made on conversion for interest accrued hereon
or for dividends on Common Stock delivered on conversion. The right to
convert this Convertible Subordinated Note is subject to the provisions of
the Indenture relating to conversion rights in the case of certain
consolidations, mergers, or sales or transfers of substantially all the
Company's assets.
The Company shall not issue fractional shares or scrip representing
fractions of shares of Common Stock upon any such conversion, but shall make
an adjustment therefor in cash based upon the Current Market Price of the
Common Stock on the last trading day prior to the date of conversion.
The Company will furnish to any holder upon written request and
without charge a copy of the Indenture. Requests may be made to: Chief
Financial Officer, Xxxxxxxxxx Industries, Inc., 1270 S.E. Monmouth Cutoff,
Dallas, OR 97338-9532.
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FORM OF CONVERSION NOTICE
To: XXXXXXXXXX INDUSTRIES, INC.
The undersigned registered owner of the Convertible Subordinated Note
hereby irrevocably exercises the option to convert this Convertible Subordinated
Note, or portion hereof (which is $50 or an integral multiple thereof) below
designated, into shares of Common Stock of Xxxxxxxxxx Industries, Inc. in
accordance with the terms of the Indenture referred to in this Convertible
Subordinated Note, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and
Convertible Subordinated Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Convertible Subordinated Note not converted are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto. Any amount required to be paid by the undersigned
on account of interest and taxes accompanies this Convertible Subordinated Note.
Dated:
Fill in for registration of -----------------------------------
shares if to be delivered,
and Convertible Subordinated -----------------------------------
Notes if to be issued, other
than to and in the name of -----------------------------------
the registered holder Signature(s)
(Please Print):
Principal amount to be
----------------------------- converted (if less than
(Name) all):
----------------------------- $_______
(Street Address)
-----------------------------
(City, State and Zip Code) -----------------------------------
Social Security or other
Signature Guarantee: Taxpayer Identification
Number
-----------------------------
[Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Convertible Subordinated Notes are to be delivered, other than to and in the
name of the registered holder(s).]
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ASSIGNMENT FORM
If you the holder want to assign this Convertible Subordinated Note,
fill in the form below and have your signature guaranteed:
I or we assign and transfer this Convertible Subordinated Note to
___________________________
(Insert assignee's social security or tax ID number) _________
_____________________________________________________
_____________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________ agent to transfer
this Convertible Subordinated Note on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
--------------- ---------------------------------
(Sign exactly as your
name appears on the
other side of this
Convertible Subordinated
Note)
Signature Guarantee:
-----------------------------------------------------------
[Signatures must be guaranteed by an eligible Guarantor Institution (banks,
brokers, dealers, savings and loan associations and credit unions) with
membership in an approved signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15 if shares are to be issued, or
Convertible Subordinated Notes are to be delivered, other than to and in the
name of the registered holder(s).]
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OPTION OF HOLDER TO ELECT REPURCHASE
If you wish to have this Convertible Subordinated Note repurchased by
the Company pursuant to Section 4.6 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Convertible Subordinated Note
purchased by the Company pursuant to Section 4.6 of the Indenture, state the
amount (in multiples of $50): $________
Date: Your Signature:
--------------- ----------------------------------
(Sign exactly as your name appears on
the other side of this Convertible
Subordinated Note)
Signature Guarantee:
--------------------------------------------------
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